[Federal Register Volume 65, Number 90 (Tuesday, May 9, 2000)]
[Notices]
[Pages 26859-26868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11540]


=======================================================================
-----------------------------------------------------------------------

OFFICE OF MANAGEMENT AND BUDGET


Agency Information Collection Under Review by the Office of 
Management and Budget

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice of submission for OMB review; comment request.

-----------------------------------------------------------------------

SUMMARY: The Office of Management and Budget (OMB) has submitted the 
information collection listed as Appendix C at the end of this notice 
to the Office of Information and Regulatory Affairs (OIRA), OMB, for 
review under provisions of the Paperwork Reduction Act of 1995 (Pub. L. 
104-13). This new form will be required by OMB Circular A-21, ``Cost 
Principles for Educational Institutions,'' for the submission of 
facilities and administrative rate proposals by educational 
institutions. On September 10, 1997, (62 FR 47721) OMB proposed the use 
of a standard format for submitting of facilities and administrative 
rate proposals by educational institutions. OMB received 35 comments 
from Federal agencies, universities and professional organizations, all 
of whom favored the development of such a form. Based upon this 
information, OMB issued a Federal Register notice on August 12, 1999, 
(64 FR 44062) which proposed to revise Circular A-21 to incorporate a 
new form. OMB received 40 comments from Federal agencies, universities 
and professional organizations. Most commenters agreed with the concept 
of a standard format that would streamline the rate proposal submission 
process. In addition, many commenters had questions and requested 
clarifications regarding data to be included in the form or the format 
of the form. Changes were made to the form as appropriate. The comments 
and OMB responses are summarized in the Comments and Responses section.
    Once this new form receives clearance under the Paperwork Reduction 
Act, OMB will issue a final revision to incorporate the form in 
Circular A-21.

DATES: Submit comments on or before June 8, 2000.

ADDRESSES: Address comments to Ed Springer, Desk Officer, Office of 
Information and Regulatory Affairs (OIRA), OMB, 725 17th Street NW, 
Room 10236, New Executive Office Building, Washington, DC 20503. E-mail 
comments may be submitted to [email protected]. Please 
include the full body of the comments in the text of the message and 
not as an

[[Page 26860]]

attachment. Please include the name, title, organization, postal 
address, and E-mail address in the text of the message. (Comments 
should also be addressed to the Office of Federal Financial Management 
at the address listed below.)

FOR FURTHER INFORMATION CONTACT: Gilbert Tran, Office of Federal 
Financial Management, Office of Management and Budget, (202) 395-3993 
(e-mail Hai [email protected]).

SUPPLEMENTARY INFORMATION:   
    OMB Control No.: 0348-XXXX.
    Title: Standard Form for Facilities and Administrative Rate 
Proposal.
    Form No: N/A.
    Frequency: On occasion.
    Type of Review: New collection.
    Respondents: Large universities.
    Number of Responses: 282.
    Estimated Time Per Response: 4 hours.
    Needs and Uses: This provides a standardized format for the 
submission of facilities and administrative (F&A) rate proposals that 
would assist educational institutions in completing their F&A rate 
proposals more efficiently, and help the cognizant agency review each 
proposal on a more consistent basis. It will also facilitate the 
Federal government's effort to collect better information regarding 
educational institutions' F&A costs that could be useful in explaining 
variations in F&A rates among institutions. Copies of the above 
information collection proposal can be obtained by calling or writing 
Gilbert Tran at the address listed above.

Comments and Responses

General

    Comment: Some commenters suggested that the estimated time of four 
hours needed to complete the standard format is gravely underestimated. 
They commented that the process of collecting data for the preparation 
of an institution's rate proposal and completing the standard format 
can take several months.
    Response: OMB agrees that the process of collecting data and 
preparing the facilities and administrative rate proposal in accordance 
with Circular A-21 can take several months to complete depending on the 
size of the universities and the complexity of its proposals. The 
estimated four hours is only for the filling of prepared data in the 
standard format. Only three commenters indicated that the completion of 
the standard format will greatly increase grantees' workload. In 
addition, in consideration of the comments that cited some data 
requests as overly cumbersome and difficult to collect, OMB has 
reexamined all proposed data requests, discussed them with the Federal 
agencies and, consequently, deleted much of the requested data in the 
final version.
    To further streamline and simplify the proposal submission process, 
OMB will work with the Federal agencies to encourage the submission of 
the standard format electronically.
    Comment: Most commenters applauded the concept of a standard format 
that would streamline the rate proposal submission process. However, 
they requested that the implementation date be delayed to allow them to 
adjust to the new format requirements.
    Response: OMB agrees. The implementation date is changed to apply 
to facilities and administrative proposals submitted on or after July 
1, 2001 (instead of July 1, 2000). Earlier implementation of the 
revision is permitted and encouraged.
    Comment: The revision should explicitly state that universities and 
cognizant agencies could agree to eliminate certain elements from the 
standard format, when applicable, particularly when a university uses 
the standard 24 percent to claim administrative costs, as allowed in 
section G.9 of Circular A-21, ``Alternative method for administrative 
costs.''
    Response: OMB agreed. The final revision allows the cognizant 
agencies to grant exceptions, on an institution-by-institution basis, 
from all or portions of Part II of the standard format. For example, 
when a university uses the standard 24 percent to claim administrative 
costs as allowed in section G.9 of Circular A-21, the cognizant agency 
may waive all the requirements for detailed data in the administrative 
cost pools (i.e., general administration, departmental administration 
and sponsored project administration). However, for consistency in data 
collection and reporting, information in Part I should not be waived 
(unless the information is not applicable to a particular institution).
    Comment: Several commenters raised a concern about having to submit 
two standard format proposals in one fiscal year when they negotiate 
rates on a ``fixed with carry-forward'' basis. They do not see the need 
to submit a standard format proposal when the proposal is used only to 
determine the carry-forward amount.
    Response: When an institution is required to submit a historical/
incurred cost proposal solely to determine a carry-forward amount, the 
cognizant agency may waive all or part of the requirements to submit 
the standard format proposal as required in G.12 of Circular A-21.

Part I, Schedule A

    Comment: Some commenters requested clarification of the information 
related to students, faculty and staff population in Part I, Schedule 
A, item d of the standard format. Does the population count include all 
affiliate organizations associated with the institution?
    Response: The students, faculty and staff population information 
requested in Part I, Schedule A of the standard format should be based 
on full-time equivalents (FTE) for the institution only.
    Comment: Several commenters suggested that the breakout of salaries 
and wages (and fringe benefits) by professional/professorial and other 
labor (as required in Part I, Schedule A, item h; and, Part II, ``Rate 
Proposal Summary by Major Function,'' of the standard format) is not 
always maintained at the aggregate level by universities and may 
require significant effort to compute.
    Response: OMB agreed that the requested data may not be readily 
available on the aggregate level at many universities. Therefore, this 
requested data is removed from the standard format in Part I (Schedule 
A, item h) and Part II, ``Rate Proposal Summary by Major Function,'' 
item 3.(d) of the standard format. In addition, this information is 
usually available on a department-by-department basis with the 
departmental administration calculation schedules.
    Comment: The breakout by salaries classification (i.e., 
professorial/professional and other labor) by major functions, as 
required in item h of Part I of the standard format, is difficult to 
accumulate and would require significant time and effort.
    Response: This breakout requirement is removed. Item h now only 
requires the modified total direct costs for each major function by 
salaries and wages/fringes, and non-labor costs.
    Comment: In item i of Part I, Schedule A of the standard format, 
the schedule seems to require information only on the allocation 
percentage of overhead pools to direct functions. Should cross-
allocation percentage to other overhead pools be included? If cross 
allocations are excluded, the ``total'' column should be eliminated 
because the total percentage will not be 100 percent. Alternatively, 
another column (titled ``Other'') should be added to account for all 
cross allocations.
    Response: For simplicity, cross allocation of an overhead pool to

[[Page 26861]]

another overhead pool (e.g., allocation of interest expenses to 
buildings or equipment) is excluded from this schedule. The schedule 
will show only the allocation of F&A cost pools to major direct 
functions for which amounts should be readily available from the step-
down allocation schedule. This ``total'' column is, therefore, 
eliminated. The ``Other'' column is used to display overhead allocation 
to other major institutional functions for which F&A rates are computed 
(e.g., primate centers and applied physics laboratories).
    Comment: In item i of Part I, Schedule A of the standard format, 
what should be included in the ``other'' column?
    Response: The ``other'' column in item i of Part I of the standard 
format should reflect the percentage of the cost pool allocated to 
major functions (other than Instruction, Organized Research and OSA) 
for which rates are developed for billing purposes such as primate 
centers or applied physics laboratories.

Part I, Schedule B

    Comment: What is the definition of the term ``base year'' used in 
Part I, Schedule B of the standard format? Does it refer to: (a) only 
historical (or incurred) cost financial information or (b) both 
historical and projected cost information related to an F&A rate 
proposal submission?
    Response: The term ``base year'' refers to only historical (or 
incurred) cost data which is based on an institution's financial 
statements. To clarify this matter, the ``base (or data) year'' phrase 
at the beginning of Part I, Schedule B of the standard format has been 
changed to ``Historical Base Year.''
    Comment: What should be included in ``Land Improvements'' line in 
Part I, Schedule B of the standard format?
    Response: Under this title, the universities should report the 
distribution of ``land improvements'' costs to the universities' major 
functions and the computed percentage point for the overall F&A rates. 
``Land improvements'' costs are defined in Circular A-21, section 
F.2.(b).4, as ``depreciation or use allowances on certain capital 
improvements to land, such as paved parking areas, fences, sidewalks, 
and the like, not included in the cost of buildings.''
    Comment: Schedule B of Part I of the standard format should include 
a line for the utility cost adjustment of 1.3 percentage points, as 
allowed in section F.4.c of Circular A-21 for certain universities.
    Response: OMB agreed. A line is added in schedule B of Part I of 
the standard format, under the ``Operation & Maintenance'' item to 
allow the applicable universities to report the utility cost adjustment 
in order to reflect all the rate components proposed in the F&A 
proposal.
    Comment: What should be included in the ``Other'' line under the 
``Modified Total Direct Cost and F&A Rates'' of Part I, Schedule B of 
the standard format?
    Response: The ``Other'' line under the ``Modified Total Direct Cost 
and F&A Rates'' section of the standard format is used when a special 
rate (other than On-Campus or Off-Campus) is developed for any major 
functions included in the F&A proposal. Examples of special rates are 
research vessel rates and overseas training rates.
    Comment: Some commenters suggested combining the categories of 
``Research Training Awards,'' ``Other Awards,'' and ``Non-Federal 
Sources'' under the ``Composition of Rate Base'' in Part I of Schedule 
B of the standard format into one category called ``Other Awards (not 
based on negotiated rates).'' They suggested that the requested 
breakout is not necessary for the F&A proposal review.
    Response: OMB disagreed. The breakout for the composition of rate 
base is necessary in two ways. First, the Federal Government wants to 
track the percentage of awards that are not fully reimbursed at the 
negotiated rates by source of funding and by types of awards. Secondly, 
the breakout is important to verify the reasonableness of space cost 
allocation to benefitting activities.
    Comment: Where is the cost sharing amount reported under the 
``Composition of Rate Base'' in Part I, Schedule B of the standard 
format?
    Response: The amount of cost sharing, representing the costs on 
research projects that are borne by the universities, is reported under 
the ``Organized Research'' column on the ``Non-Federal Sources'' line 
item.
    Comment: Under the ``Miscellaneous Statistics'' section of Part I, 
Schedule B of the standard format, data related to facilities' finance 
costs ( ``percent of ASF Financed'') should not be required if the 
university does not claim interest expenses on the F&A cost proposal 
(as some public universities do not). In addition, this information 
should only be requested for buildings that are more than 50 percent 
dedicated to research activities.
    Response: OMB agreed that this information is not necessary when 
the university does not claim any interest costs for its facilities on 
its F&A cost proposal. The note (1) is changed to allow such exemption. 
However, for comparative analysis, data must be collected for all 
buildings regardless of their portion dedicated to research activities. 
This information is helpful in explaining the cost of research 
facilities and any increase of F&A rates over a period of time.

Part II--Standard Documentation Requirements

    Comment: Item 1 in the General Information section of Part II of 
the standard format contains the phrase ``financial statements 
including any affiliated organizations.'' What is the meaning of 
affiliated organizations and why is this data needed?
    Response: Many large institutions provide administrative services 
to various units within their corporate structure. A school, for 
example, may furnish certain administrative services to an 
``affiliated'' hospital. The school's financial statements would 
probably exclude these costs and the hospital's financial statements 
would include these costs. In this case, a review of consolidated 
financial statements, which include the affiliated unit, will be needed 
to support (i) the total cost of the shared services and (ii) the 
assignment of costs on the financial statements of the school and the 
hospital. The affiliated organizations exclude non-monetary 
relationships (e.g., teaching rotation for medical students).
    Comment: Under item 2 of the General Information section of the 
standard format, what does OMB mean by ``relevant detail supporting the 
financial statement?'' Does ``detail'' include all journal entries?
    Response: In preparing an F&A proposal, a university is expected to 
start with its audited financial statements, prepared under generally 
accepted accounting principles (GAAP), and reclassify the accumulated 
costs into direct functions and cost pools as defined in Circular A-21. 
A reconciliation that includes all major reclassifications and 
adjustments must exist between these two documents to explain the 
differences. For example, all administrative costs are reported under 
``Institutional Support'' on the university's financial statements. 
These costs could be reclassified to the general administrative, 
departmental administrative and sponsored project administrative cost 
pools for A-21 purposes. This provision requires that the university 
report the reclassified amounts along with a note to explain the nature 
of the reclassification. Detailed journal entries are not necessary for 
this request. In the final revision, the word ``detail'' is replaced 
with the word ``data.''

[[Page 26862]]

    Comment: Several commenters indicated that the organized research 
base breakdown by college or school into four categories: (a) Federal 
awards receiving F&A cost based on the negotiated rate agreement, (b) 
Federal awards receiving less than the negotiated rates, (c) non-
Federal awards, and (d) cost sharing (as requested in Part II, 
``General Information,'' item 5) is not readily available and would 
require extensive effort to produce. Some suggested that the 
information, in a summary level, is already available in Part I, 
Schedule B, under the ``Composition of Rate Base'' section of the 
standard format.
    Response: In light of the possible excessive effort to produce the 
level of detail required for this request, OMB deleted this data 
requirement. OMB also agreed that similar data, in a summary level, is 
available in Part I, schedule B, ``Composition of Rate Base'' of the 
standard format.
    Comment: Some commenters suggested that the requirement for a 
statement concerning the physical inventory requirement (Part II, 
``General Information,'' item 9.d of the standard format) be deleted 
because this requirement duplicates those required under section 
J.12.e, ``Depreciation and use allowances,'' of the Circular.
    Response: OMB agreed. The proposed statement of assurance regarding 
the physical inventory for equipment is removed in the final revision. 
Section J.12.e of Circular A-21 requires that ``charges for use 
allowances or depreciation must be supported by adequate property 
records, and physical inventories must be taken at least once every two 
years to ensure that the assets exist and are usable.'' By completing 
the ``Certificate of F&A Costs,'' as required in Section K.2.b of 
Circular A-21, the university certifies that it complies with the 
requirement of Section J.12.e of Circular A-21 for a biannual equipment 
physical inventory.
    Comment: Some commenters suggested that the assurance statements 
regarding the compensation limits (Part II, ``General Information,'' 
item 9.e of the standard format) be deleted because such assurance is 
already included in the Certification of F&A costs (Part II, ``General 
Information,'' item 9.a of the standard format). If required, can the 
university include such an assurance statement with other assurance 
statements required under this section?
    Response: The Certification of F&A costs, as required by Section K. 
of the Circular, does not currently provide any assurance regarding the 
compensation limits, established under separate program statutes. Such 
assurances are necessary to ascertain that costs charged against 
Federal programs do not exceed limits established by program statutes. 
The assurance statement regarding compensation limits can be (1) added 
to the Certification of F&A costs, (2) issued as a separate statement, 
or (3) combined with other assurance statements required by the 
Circular (e.g., lobbying certification).
    Comment: Some commenters suggested that the reference to 
``voluntary cost sharing'' in Part II, ``Rate Proposal Summary By Major 
Function,'' item 3.(a) of the standard format be deleted until the 
current debate on the reporting requirements for voluntary cost sharing 
is finalized.
    Response: OMB agreed. The reference to ``voluntary'' cost sharing 
is deleted. The breakout between mandatory and voluntary cost sharing 
is therefore not required. Only the total cost sharing amount, as it is 
computed and reported on the institution's F&A rate proposal, is 
required for Schedule B of Part I, ``Miscellaneous Statistics,'' and 
item 3.(a) of Part II, ``Rate Proposal Summary'' of the standard 
format.
    Comment: Regarding the space survey required in Part II of the 
standard format, does it cover all buildings at the university or just 
the research buildings?
    Response: The space survey should include all buildings at the 
university. An university's total square footage information by major 
functions is necessary to allocate the space related costs such as 
operation and maintenance, building and equipment depreciation (or use 
allowances), and interest costs.
    Comment: In Part II of the standard format, under the ``Operation 
and Maintenance,'' ``General Administrative,'' ``Departmental 
Administration,'' and ``Sponsored Projects Administration'' sections, 
OMB should delete the requirement for a breakout of total costs by 
labor and non-labor costs. Some commenters questioned the usefulness of 
this requirement for the cognizant agency's review, particularly when 
the administrative rates are capped at 26 percent.
    Response: The requirement for breakout of total costs by labor and 
non-labor costs for the ``General Administrative'' and ``Sponsored 
Projects Administration'' is deleted; only total cost amounts are 
required for these two cost pools. However, this breakout is necessary 
for the review of the ``Operation and Maintenance'' (e.g., analysis of 
various utility costs and maintenance project costs) and the 
``Departmental Administration'' cost pools (e.g., analysis of the 
direct charge equivalent computation).

    Issued in Washington, DC, April 28, 2000.
Joshua Gotbaum,
Executive Associate Director and Controller.

    OMB proposes to add the following section and Appendix to Circular 
A-21.
    1. Add Section G.12 to read as follows:

    12. Standard Format for Submission. For facilities and 
administrative (F&A) rate proposals submitted on or after July 1, 
2001, educational institutions shall use the standard format, shown 
in Appendix C, to submit their F&A rate proposal to the cognizant 
agency. The cognizant agency may, on an institution-by-institution 
basis, grant exceptions from all or portions of Part II of the 
standard format requirement. This requirement does not apply to 
educational institutions which use the simplified method for 
calculating F&A rates, as described in Section H.

    2. Add Appendix C (shown below):

Appendix C

OMB Circular A-21 Documentation Requirements for Facilities and 
Administrative (F&A) Rate Proposals Claiming Costs Under the 
Regular Method

    The documentation requirements for F&A rate proposals consist of 
two parts. Part I provides a schedule of summary data on the 
institution's F&A cost pools and their allocations, and the proposed 
F&A rates. For illustration, an example of a completed Part I is 
included. Part II describes the standard documentation to be 
submitted with the institution's F&A rate proposal.

Part I: Summary Data Elements for F&A Rate Proposal--Schedule A

Name of Institution:--------------------------------------------------
Organization Number: (Federal Use Only)
Address:---------------------------------------------------------------
----------------------------------------------------------------------

    a. Cognizant Federal Agency Rate Setting:__ Audit:__
    b. Type of Institution Private ( ) Public/State ( )
    c. Fiscal Year ________
    d. Institution Population (FTE)
      Students:__
      Faculty:__
      Staff:____
    e. Status of Disclosure Statement
      Required to Submit (Y/N)? ____
      Due Dates: Initial: ____ Revised: ____
      Date Submitted ____
      Approved ( )Yes ( ) No Date: ____
    f. Most Current F&A Rates (i.e., final, predetermined, fixed) 
(Last three fiscal years)


[[Page 26863]]



------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Date of rate            On-campus        On-campus organized                            Off-campus           Off-campus
    Type of rate       Fiscal year covered        agreement            instruction            Research           On-campus OSA*        instruction      organized  research    Off-campus OSA*
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                      ....................  ....................  ....................  ....................  ...................  ...................  ...................  ...................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(*OSA= Other Sponsored Activities)

    g. Base year costs associated with new buildings placed into 
service within the last five years (i.e., base year and four preceding 
years) by major functions proposed (in thousands).

------------------------------------------------------------------------
                                                  Organized
                                                  research       OSA
-----------------------------------Instruction--------------------------
Building Depreciation or Use       ...........  ...........  ...........
 Allowance.......................
Interest Expense.................  ...........  ...........  ...........
Operation and Maintenance........  ...........  ...........  ...........
------------------------------------------------------------------------

    h. Dollar amounts by major functions proposed--Base Year (in 
thousands)

------------------------------------------------------------------------
                                                 Organized
                                   Instruction    research       OSA
------------------------------------------------------------------------
Salaries & Wages/Fringes.........  ...........  ...........  ...........
Non-labor Costs..................  ...........  ...........  ...........
Modified Total Direct Costs......  ...........  ...........  ...........
------------------------------------------------------------------------

    i. Percentage of cost pool dollars allocated to major functions 
proposed--Base Year

----------------------------------------------------------------------------------------------------------------
                                                                            Organized
                                                              Instruction    research       OSA         Other*
----------------------------------------------------------------------------------------------------------------
Building Depreciation or Use Allowance......................  ...........  ...........  ...........  ...........
Equipment Depreciation or Use Allowance.....................  ...........  ...........  ...........  ...........
Interest Expense............................................  ...........  ...........  ...........  ...........
Operation and Maintenance...................................  ...........  ...........  ...........  ...........
Library.....................................................  ...........  ...........  ...........  ...........
----------------------------------------------------------------------------------------------------------------
* ``Other'' includes other major institutional functions for which F&A rates are computed such as primate
  centers or applied physics laboratories.

    j. Proposed methodology for library costs: Standard Method: 
__Special Study:
    k. Procedure for claiming fringe benefit costs: Specific 
Identification:__
    Negotiated Rate:__
    Other (see attached)__

Part I: Summary Data Elements for F&A Rate Proposal--Schedule B

--Name of Institution:
--Historical Base Year:

    Base Year Rate Calculation Summary by Major Function (dollars in
                               thousands)
------------------------------------------------------------------------
                                                     Organized
                                    Instruction       research      OSA
------------------------------------------------------------------------
                            FACILITIES GROUP
------------------------------------------------------------------------
Depreciation/Use Allowance
     Buildings..........  $                $              $  %
     Equipment..........  $  %             $              $  %
     Land Improvements..  $  %             $  %           $  %
Interest Expense................  $  %             $  %           $  %
Operation & Maintenance.........  $  %             $  %           $  %
Utility Cost Adjustment.........  $  %             $  %           $  %
Library.........................  $  %             $  %           $  %

[[Page 26864]]

 
------------------------------------------------------------------------
                          ADMINISTRATIVE GROUP
------------------------------------------------------------------------
General.........................  $  %             $  %           $  %
Departmental....................  $  %             $  %           $  %
Sponsored Projects..............  $  %             $  %           $%
Student Services................  $  %             $  %           $  %
Adjustment for 26% Limitation...    %                %              %
------------------------------------------------------------------------
                MODIFIED TOTAL DIRECT COST AND F&A RATES
------------------------------------------------------------------------
On-Campus.......................  $  %             $  %           $%
Off-Campus......................  $  %             $  %
Other...........................  $  %             $  %           $%
Total MTDC......................  $                $              $
------------------------------------------------------------------------
                        COMPOSITION OF RATE BASE
------------------------------------------------------------------------
Federal Awards
    On-Campus (negotiated rates)  $                $              $
    Off-Campus (negotiated        $                $              $
     rates).
Research Training Awards........  $                $              $
Other Awards (not based on        $                $              $
 negotiated rates).
Non-Federal Sources.............  $                $              $
Total...........................  $                $              $
------------------------------------------------------------------------
                        MISCELLANEOUS STATISTICS
------------------------------------------------------------------------
Cost Sharing in Rate Base.......  $                $              $
Reassignable Square Feet (ASF)    $                $              $
 by Major Function.
Percent of ASF Financed (1).....  ...............  .............  ......
------------------------------------------------------------------------


    Note (1): Ratio of ASF subject to financing divided by total 
ASF. If 20% of a building's acquisition cost is financed, then 20% 
of the ASF is considered ASF financed. This information is not 
required if the institution does not claim any interest costs on its 
F&A proposal.

Part I--Example: Summary Data Elements for F&A Rate Proposal--
Schedule A

Name of Institution: University of XYZ
Organization Number: (Federal, Use Only)
Address: 100 Main St., Somewhere, ST 12345

    a. Cognizant Federal Agency Rate Setting: HHS Audit: HHS
    b. Type of Institution  Private ( ) Public/State (X)
    c. Fiscal Year July 1, 1997-June 30, 1998.
    d. Institution Population (FTE)
      Students: 12,000
      Faculty: 1,759
      Staff: 2,798
    e. Status of Disclosure Statement
      Required to Submit (Y/N)? Yes
      Due Dates: Initial: 06/30/98 Revised: 12/31/98
      Date Submitted: 12/10/98
      Approved (X) Yes ( ) No
      Date: 06/13/ 99
    f. Most Current F&A Rates (i.e., final, predetermined, fixed) (Last 
three fiscal years)

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Date of rate            On-campus        On-campus organized                            Off-campus           Off-Campus
    Type of rate       Fiscal year covered        agreement            instruction            research           On-Campus OSA*        instruction      organized  research    Off-campus OSA*
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pred                  1999                  09/15/96              78.0%                 52.5%                 38.3%                26.0%                26.0%                20.0%
Pred                  1998                  09/15/96              78.0%                 52.5%                 35.0%                26.0%                26.0%                20.0%
Pred                  1977                  09/15/96              76.0%                 53.0%                 35.0%                26.0%                26.0%                20.0%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 (*OSA=Other Sponsored Activities)

    g. Base year costs associated with new buildings placed into 
service within the last five years (i.e., base year and four preceding 
years) by major functions proposed (in thousands).

------------------------------------------------------------------------
                                                 Organized
                                   Instruction    research       OSA
------------------------------------------------------------------------
Building Depreciation or Use               729        2,639            0
 Allowance.......................
Interest Expense.................            0        1,794            0
Operation and Maintenance........        1,280        4,632            0
------------------------------------------------------------------------


[[Page 26865]]

    h. Dollar amounts by major functions proposed--Base Year (in 
thousands)

------------------------------------------------------------------------
                                                 Organized
                                   Instruction    research       OSA
------------------------------------------------------------------------
Salaries & Wages/Fringes.........       36,400       63,750       11,050
Non-labor Costs..................       19,600       21,250        1,950
                                  --------------------------------------
Modified Total Direct Costs......       56,000       85,000       13,000
                                  --------------------------------------
------------------------------------------------------------------------

    i. Percentage of cost pool dollars allocated to major functions 
proposed--Base Year

----------------------------------------------------------------------------------------------------------------
                                                                     Organized
                                                    Instruction      research           OSA           Other*
----------------------------------------------------------------------------------------------------------------
Building Depreciation or Use Allowance..........           40.0%           44.0%            2.5%            7.0%
Equipment Depreciation or Use Allowance.........           34.2%           27.7%            2.1%           10.0%
Interest Expense................................           29.9%           32.4%            1.9%            0.0%
Operation and Maintenance.......................           32.8%           35.6%            2.1%           15.0%
Library.........................................           75.3%           10.9%            0.9%           0.0%
----------------------------------------------------------------------------------------------------------------
\*\ ``Other'' includes other major institutional functions for which F&A rates are computed such as primate
  centers or applied physics laboratories.

    j. Proposed methodology for library costs:
     Standard Method: Yes
     Special Study: No
    k. Procedure for claiming fringe benefit costs:
     Specific Identification: No
     Negotiated Rate: Yes
     Other (see attached)----

Part I--Example: Summary Data Elements for F&A Rate Proposal--
Schedule B

Name of Institution: University of XYZ
Historical Base Year: 07/01/97 to 06/30/98

                   Base Year Rate Calculation Summary by Major Function (dollars in thousands)
----------------------------------------------------------------------------------------------------------------
                                      Instruction             Organized  Research                 OSA
                             -----------------------------------------------------------------------------------
                                   ($)           (%)           ($)           (%)           ($)           (%)
----------------------------------------------------------------------------------------------------------------
                                                FACILITIES GROUP
----------------------------------------------------------------------------------------------------------------
Depreciation/Use Allowance
    --Buildings.............         4,861           9.6         5,278           6.9           306           2.6
    --Equipment.............         3,082           6.1         2,496           3.3           194           1.7
    --Land Improvements.....         1,992           4.0           133           0.2            17           0.1
Interest Expense............         1,944           3.9         2,111           2.8           122           1.0
Operation & Maintenance.....         8,532          16.9         9,264          12.1           536           4.6
Utility Cost Adjustment.....             0           0.0           994           1.3             0           0.0
Library.....................         7,910          15.7         1,146           1.5            96           0.8
----------------------------------------------------------------------------------------------------------------
                                              ADMINISTRATIVE GROUP
----------------------------------------------------------------------------------------------------------------
General.....................         1,535           2.7         2,330           2.7           356           2.7
Departmental................        11,991          21.4        17,239          20.3         2,797          21.5
Sponsored Projects..........            89           0.2         2,693           3.2           412           3.2
Student Services............         4,166           7.4             0           0.0             0           0.0
Adjustment for 26 Limitation  ............          -5.7  ............          -0.2  ............          -1.4
----------------------------------------------------------------------------------------------------------------
                                    MODIFIED TOTAL DIRECT COST AND F&A RATES
----------------------------------------------------------------------------------------------------------------
On-Campus...................        50,400          82.2        76,500          54.2        11,700          36.8
Off-Campus..................         5,600          26.0         8,500          26.0         1,300          26.0
Other.......................             0           0.0             0           0.0             0           0.0
Total MTDC..................        56,000  ............        85,000  ............        13,000
----------------------------------------------------------------------------------------------------------------
                                            COMPOSITION OF RATE BASE
----------------------------------------------------------------------------------------------------------------
Federal Awards
    On-Campus (negotiated            1,000  ............        46,000  ............           900  ............
     rates).................
    Off-Campus (negotiated             120  ............         5,000  ............           400  ............
     rates).................
    Research Training Awards             0  ............             0  ............             0  ............
    Other Awards (not based          1,680  ............         8,500  ............         2,600  ............
     on negotiated rates)...
Non-Federal Sources.........        53,200  ............        25,500  ............         9,100  ............
Total.......................        56,000  ............        85,000  ............        13,000
----------------------------------------------------------------------------------------------------------------

[[Page 26866]]

 
                                            MISCELLANEOUS STATISTICS
----------------------------------------------------------------------------------------------------------------
Cost Sharing in Rate Base...      (10,000)  ............        10,000  ............             0  ............
Assignable Square Feet (ASF)    83,611 ASF  ............    90,778 ASF  ............     5,256 ASF  ............
 by Major Function..........
Percent of ASF Financed (1).           7.0  ............          20.0  ............          30.0  ............
----------------------------------------------------------------------------------------------------------------


    Note (1): Ratio of ASF subject to financing divided by total 
ASF. If 20 of a building's acquisition cost is financed, then 20 of 
the ASF is considered ASF financed. This information is not required 
if the institution does not claim any interest costs on its F&A rate 
proposal.

Part II

Introduction

    This Part contains the standard documentation requirements that are 
needed by your cognizant agency to perform a review of your 
institution's F&A rate proposal. This documentation supports the 
development of proposed rates shown in Part I and will be submitted 
with your F&A rate proposal.
    This listing contains minimum documentation requirements.
    Additional documentation may be needed by your cognizant agency 
before completing a proposal review.
    If there are any questions about these requirements, please contact 
your cognizant agency.
    Documentation requirements would be cross-referenced to appropriate 
schedule(s) within the submitted F&A rate proposal.

General Information

    Reference:
    __ 1. Copy of audited financial statements including any affiliated 
organizations. The statements must be reconciled to the F&A base year 
cost calculation. Copy of most recently issued Circular A-133 audit 
reports
    __ 2. Copy of relevant data supporting the financial statement, 
including a reconciliation schedule for each cost pool and rate base in 
the F&A base year cost calculation. A reconciliation schedule will show 
each reclassification and adjustment to the financial statements to 
arrive at the cost pools and rate bases in F&A base year cost 
calculation. Each reclassification and adjustment must be explained in 
notes to the reconciliation schedule
    __ 3. Cost step-down schedule showing allocation of each F&A cost 
pool to the Major Functions and other cost pools
    __ 4. Explanation for each proposed organized research rate 
component which exceeds the prior negotiated rate component by 10%
    __ 5. Schedules clearly detailing composition and allocation 
base(s) of each F&A cost pool in base year cost calculation. If the 
institution has filed a Disclosure Statement (DS-2) submission, 
specific references (rather than narrative descriptions) from the DS-2 
may be used
    __ 6. Narrative description of composition of each F&A cost pool 
and allocation methodology. If the institution has filed a DS-2 
submission, specific references (rather than narrative descriptions) 
from the DS-2 may be used
    __ 7. Narrative description of changes in accounting or cost 
allocation methods made since the institution's last F&A submission. If 
the institution has filed a DS-2 submission, specific references 
(rather than narrative descriptions) from the DS-2 may be used
    __ 8. Copy of reports on the conduct and results of special studies 
performed under Section E.2.d, when applicable
    __ 9. Copy of the following:
    (a) The Certificate of F&A Costs
    (b) Lobbying Certification
    (c) Description of procedures used to ensure that awards issued by 
the Federal Government do not subsidize the F&A costs allocable to 
awards made by non-Federal sources (e.g., industry, foreign 
governments)
    (d) Assurance Certification--for those institutions listed on 
Exhibit A--concerning disposition of Federal reimbursements associated 
with claims for depreciation/use allowances
    (e) Assurance statement that institution is in compliance with 
Federal awarding agency limitations on compensation (e.g., NIH salary 
limitation, executive compensation)
    __ 10. If applicable, reconciliation of carry-forward amounts from 
prior years used in the current proposal
    __ 11. Transmittal letter stipulating the type(s) of rates 
proposed, the fiscal year(s) covered by the proposal and the base year 
used

Rate Proposal Summary by Major Function

    __ 1. Summary of F&A base year rates calculated by Major Function 
and special rates (e.g., vessel rates) if applicable by component. 
These would be grouped by Administrative Components and Facilities 
Components. Total base year calculated rates would be disclosed, as 
well as allowable rates after the 26 percent limitation on 
Administrative Components
    __ 2. A breakout of Modified Total Direct Cost (MTDC) rate base 
figures for each major function (and special rates, if applicable) by:
    (a) On-Campus and Off-Campus amounts
    (b) Federal awards

--Based on Negotiated Rates--On-Campus
--Based on Negotiated Rates--Off-Campus
--Research Training Awards
--Other Awards (not based on negotiated rates)

    (c) Non-Federal Sources
    __ 3. Miscellaneous Statistics including:
    (a) Cost Sharing in the Rate Base
    (b) Assignable Square Feet (ASF) by Major Function
    (c) Percentage of ASF which is financed (by Major Function)
    (d) A breakout of MTDC by Direct Salaries and Wages/ fringe 
benefits and non labor costs by major functions
    __ 4. Future rate adjustments, if necessary, related to material 
changes since the base year. A clear description of the justification 
for each of the following:
    (a) Changes by cost pool by year
    (b) Changes in MTDC base by year
    (c) Changes in F&A rates for future years
    __ 5. Summary of future F&A rates, if necessary, by Major Function 
and special rates (e.g., vessel rates) which lists each administrative 
and facilities component by year.

[[Page 26867]]

Building Use Allowance and/or Depreciation

    __ 1. Reconciliation of building cost used to compute use allowance 
and/or depreciation with the financial statements. If depreciation is 
claimed in the F&A proposal and disclosed on the financial statements, 
provide a reconciliation of depreciation amounts with the financial 
statements.

    Note: If an institution's financial statements do not disclose 
depreciation expense (e.g., those subject to GASB), a reconciliation 
of claimed depreciation expense to the financial statements is not 
possible.

    __ 2. A schedule showing amount by building of use allowance and/or 
depreciation distributed to all functions
    __ 3. If a method different from the standard allocation method, 
described in section F.2.b, was used, describe method. Provide 
justification for its use and a schedule of allocation. If the 
institution has filed a DS-2 submission, claimed allocation methodology 
may be referenced to specific section of the DS-2
    __ 4. If depreciation is claimed, describe what useful lives by 
group and component have been used

Equipment Use Allowances and/or Depreciation

    __ 1. Reconciliation of equipment cost used to compute use 
allowance and/or depreciation with the financial statements. If 
depreciation is claimed in the F&A proposal and disclosed on the 
financial statements, provide a reconciliation of depreciation amounts 
with the financial statements.

    Note: If an institution's financial statements do not disclose 
depreciation expense (e.g., those subject to GASB), a reconciliation 
of claimed depreciation expense to the financial statements is not 
possible.

    __ 2. A schedule showing amount by building of use allowance and/or 
depreciation distributed to all functions
    __ 3. If a method different from the standard allocation method, 
described in section F.2.b, was used, describe the method. Provide a 
justification for its use and a schedule of allocation. If the 
institution has filed a DS-2 submission, claimed allocation methodology 
may be referenced to specific section of the DS-2
    __ 4. If depreciation is claimed, describe what useful lives by 
asset class and component have been used

Interest

    __ 1. Reconciliation of interest cost used in the F&A base year 
calculation to the financial statements
    __ 2. A schedule showing amount of interest cost assigned to each 
building and a distribution to all benefitting functions within each 
building for each proposed ``Major Function''

Space Survey

    __ 1. A summary schedule of square footage by school, department, 
building and function
    __ 2. The same schedule should then be sorted by school, building, 
department, and function
    __ 3. Copies of space inventory instructions, forms, and 
definitions

Operation and Maintenance (O&M)

    __ 1. A summary schedule of each major activity (or subpool) in O&M 
cost pool. It must show the costs by S&W/fringe benefits and all non-
labor cost categories
    __ 2. A schedule showing amount of O&M costs distributed to all 
functions

General Administration (G&A)

    __ 1. A summary schedule of each activity (or subpool) in the G&A 
cost pool
    __ 2. A schedule of costs in the modified total costs (MTC) 
allocation base
    __ 3. If a method different from the standard MTC allocation method 
was used, describe the method. Provide a justification for its use and 
a schedule of allocation. If the institution filed a DS-2 submission, 
claimed allocation methodology may be referenced to specific section of 
the DS-2

Departmental Administration (DA)

    __ 1. Schedules of the DA summary by school, department and 
allocated to Major Functions by department
    __ 2. Schedule identifying costs by S&W/fringe benefits and non-
labor costs by department for the following functions:
    (a) Direct (Major Functions)

    --Instruction
    --Organized Research
    --Other Sponsored Activities
    --Other

    (b) Departmental Administration (excluding Deans)
    (c) Dean's office
    (d) Other, as appropriate
    S&W/fringe benefits shall be further identified as follows:
    (a) Faculty and other professional
    (b) Administrative (e.g., business officers, accountants, budget 
analysts, budget officers)
    (c) Technicians (e.g., lab technicians, glass washers)
    (d) Secretaries and clerical
    __ 3. Complete description of allocation method, bases and 
allocation sequences (e.g., direct charge equivalent, 3.6 percent 
allowance). If a method different from the standard MTC allocation 
method was used, describe the method. Provide a justification for its 
use and a schedule of allocation. If the institution filed a DS-2 
submission, claimed allocation methodology may be referenced to 
specific section of the DS-2
    __ 4. Show a detailed example (i.e., illustration of your Direct 
Charge Equivalent (DCE) methodology) of the allocation process used for 
one department which has Instruction and Organized Research functions 
from each of the following schools: Medicine, Arts & Sciences and 
Engineering, as applicable

Sponsored Projects Administration (SPA)

    __ 1. A summary schedule for each activity (or subpool) included in 
SPA cost pool
    __ 2. A schedule of the sponsored projects direct costs in the MTC 
allocation base
    __ 3. If a method different from the standard sponsored projects 
MTC allocation method was used, describe method. Provide justification 
for its use and a schedule of allocation. If the institution filed a 
DS-2 submission, claimed allocation methodology may be referenced to 
specific section of the DS-2

Library

    __ 1. A summary schedule for each activity included in library cost 
pool. It would show costs by salaries and wages, books, periodicals, 
and all other non-labor cost categories
    __ 2. Schedule listing all credits to library costs
    __ 3. A schedule of Full Time Equivalents (FTE) and salaries and 
wages in the bases used to allocate library costs to users of library 
services
    __ 4. If the standard allocation methodology was not used, describe 
the alternative method and provide justification for its use. Provide 
schedules of allocation statistics by function. If school filed a DS-2 
submission, claimed allocation methodology may be referenced to 
specific section of the DS-2

Student Services

    __ 1. If the proposed allocation base(s) differs from the 
stipulated standard allocation methodology provide:
    (a) Justification for use of a nonstandard allocation methodology;
    (b) Description of allocation procedure; and
    (c) Statistical data to support proposed distribution process

[[Page 26868]]

    If the institution filed a DS-2 submission, claimed allocation 
methodology may be referenced to specific section of DS-2.

[FR Doc. 00-11540 Filed 5-8-00; 8:45 am]
BILLING CODE 3110-01-P