Departmental Research Administrators Workgroup (DRAW)

January 17, 2012

deMarneffe 132

Agenda

Announcements

Revised Research Core Policy Updates on F12 New Processes – Natalie Nguyen

NIH Updates – Raquel Espinosa

McLean Balance Sheet Analysis FY11 – Raquel Espinosa

Announcements

PI & Administrators Survey Purpose: understand how tasks and

responsibilities are assigned to staff and identify PI’s in need of grant administrator support.

Due to email issues we have extended the deadline to January 27th.

Separate emails were sent to Administrators and PI’s. If you or your PI have not received it, please let us know!

JE Training Course

When: 01/24/2012, 3-4:30 pm Where: de Marneffe 218

Course Description:This program provides a General Overview of Cost Transfers and instructions for creating Journal Entries using data from Document Direct, PeopleSoft or Insight.  Overview topics include definitions, causes, descriptions of different transfer types and audit trail data.  Focus is provided on justifications and how to improve them. 

Feel free to invite administrative

staff!!

Insight Questionnaire

The Insight Committee group is requesting feedback from the administrators (initially) in an effort to improve Insight usability.

Please take a few minutes to complete the survey:

https://www.surveymonkey.com/s/BRPPL98

Due January 19th!

For all DOD awards:– If there are any changes to animal or human

subjects protocols associated with the award, those changes MUST BE submitted to and approved by the DOD prior to starting the revised work.

– IACUC or IRB approval is not sufficient until the DOD has also approved.

DOD Reminder

DRAW

Highlights of the revised Research Cores PolicyUpdates on FY12 New Processes

Natalie Nguyen, Associate Director January 17, 2012

Policy Statement

It is the policy of Partners HealthCare (Partners) that all research core facilities which directly charge users for goods and services must document that user fees charged are allowable, reasonable and allocable in relation to the cost of goods or services provided.

All research core facilities are required to have an approved business plan and user fee analysis in order to operate. User fees should include, at the minimum, the direct costs of providing the core service, and where applicable, an additional overhead component.

Core facilities that process charges to federally sponsored awards for goods and/or services are subject to government regulations concerning service centers and are responsible for developing user fees in accordance with this policy and government regulations.

Definitions

NIH’s Definition: Core facilities can be defined as centralized shared resources that provide access to instruments, technologies, services, as well as expert consultation and other services to scientific and clinical investigators. The typical core facility is a discrete unit within an institution and has dedicated personnel, equipment, and space for operations.  In general, core facilities recover their cost of providing service in the form of user fees that are charged to an investigator’s funds, often NIH or other federal grants. (Taken

from the NIH’s FAQs to Explain Costing Issues for Core Facilities, DRAFT) Partners’ Definition: A core facility is a discrete unit organized

to provide specific goods and/or services on a fee-for-service basis to users within the Partners research community and its collaborators. (Partners Research Cores Policy)

90 approved Partners cores fall within 3 categories

Research Core Facility(~69 cores + 6 minis)

Research Support Core(Administrative, Supply,

Lab Support)(~14 cores)

Specialized Service Facility(1 – CCM)

• Scientific, technical and consultative services or products

• Fee-for-service model: direct cost (+ indirect costs for non-Partners users)

• Shared post-award administrative support and/or other common expenses (e.g., general supplies, equipment service contracts, etc)

• Serves primarily investigators of a single department or several labs within a department

• User fees are based on an allocation methodology

• Highly complex and/or specialized services

• Must receive institutional designation as an SSF

• User fees include both direct and allocable indirect costs

Types of Core Customers

Researchers within the core’s institutionEx: PIs at BWH, MGH, etc.

Researchers from external or non-Partners institutionsEx: PIs at MIT, Harvard University, University of Vermont, etc.

Industry and commercial entitiesEx: Pharmaceutical companies, biotech companies, etc.

Q: How do you determine who is internal versus external?A: It depends on where the funding is coming from to pay for the core

services. Internal: Partners PI paying with Partners-administered fundExternal: Partners PI and non-Partners PI paying with non-Partners fund; other

AMCs and non-profits; industry

Q: Is there a difference in user fees if you’re internal or external?A: Absolutely! Internal fees are set at direct costs only. External user fees

include an overhead component. Fees charged to industry users may include additional mark-up.

User Fee Calculation: Direct & Indirect

Type of User Source of Payment Type of Fee

(user fee component)

Indirect Cost Impact

Internal PI

(PHS & entities)

PHS administered research fund

Internal User Fee

(direct cost only)

User pays indirect cost at the F&A rate associated with the

fund

Internal PI

(PHS & entities)

Check payment/Wire* External User Fee – AMC/Non-profit

(direct cost + indirect cost component)

User may pay indirect at the institution issuing payment

External AMC/Non-profit

(including International)

Check payment/Wire* External User Fee – AMC/Non-profit

(direct cost + indirect cost component)

User may pay indirect at the institution issuing payment

Industry/For-profit

(including International)

Check payment/Wire* External User Fee – Industry/For-profit

(direct cost + indirect cost component)

N/A

*Additional banking fees may apply for wire transfers

Your facility qualifies if it: Charges a fee for goods or services Has $50,000 or greater of annual expenses Provides services to 5 or more PIs

New cores must:

Obtain approval from Department Chief Draft a business plan Perform a cost analysis to set fees at cost Identify start-up funds that will fund up to 50% of the identified annual

shortfall upon opening the core, and annually thereafter during the start-up period (first three years of operation). The start-up funds will be used to fund the remaining 50% of the identified shortfall plus any additional cost overrun at the end of each 12-month period during the start-up period.

Identify a guarantor account to be used for future deficits Receive the approval of the Department Chief, the RCFO and the Sr.

VP for Research

Does your department plan to start a core facility?

Budgeting: New and Existing Cores

All cores are required to have an annual review of core finances, including an updated operating budget and user fees approved by the RCFO. (Cores Policy paragraph 8.1)

New Cores: During the business planning process will lay out a 3 year

budget. Depending on time of year when the core is opened, RCFO will assess financial status and determine if the core will take part in the annual budgeting process or wait for the following year.

Existing Cores Required to submit a budget on an annual basis that will be

reviewed and approved by the RCFO

Budgeting: Annual Budget Process

Timeline: Mid-April: Volume data due to RCFO Late-April: Trainings held on completing the budget template First BD in May: Pre-populated budget templates sent to cores Last BD in May: Budget templates due to RCFO June – September: RCFO reviews and confirms budgets and

user fees October 1: New fees go into effect

Budgeting Reminders: General Pricing Principles

Fees should not discriminate against any individual or group of users

Charges should be on actual costs (direct and indirect) and actual usage

Depreciation should be included for equipment purchased with non-federal funds

Surpluses should be used to lower user fees, reinvest in the core or pay back the guarantor account or start-up fund

Deficits (excluding bad debt) should be included in the operating budget to be recovered through the user fees

Subsidies can be applied to charge lower fees Fees should be reviewed, updated and published on an annual

basis

Department: Management of Core Facilities

Operational management Develop internal SOP’s regarding the provision of services

Financial management Remain revenue neutral Track AR Ensure only allowable and appropriate expenses are charged to the core Perform a monthly variance analysis comparing actual expenses and volume to

budget

Billing practices Use current approved and published fees Obtain customer’s research fund number and expiration date & point of request

for service Ensure timely billing/recording of internal charges via journal entry Ensure the billing of overhead to external customers is that the prescribed policy

rate Invoice users on a monthly basis and only after the services have been rendered Retain key documents for at least 5 years: business plan, cost analysis, new

fund application, financial reports, correspondences, service price sheets, invoices

Policy Primer: Top 10

1. Follow a revenue neutral model; +/- 15% breakeven status

2. Allocate costs for Service X to the users of Service X

3. Administrative/lab support cores: use unrestricted fund to pay for services provided to K awards or other awards exempt from admin costs

4. Depreciate (i.e. include equipment depreciation in user fees) only those pieces of equipment purchased by Partners non-federal funds

5. Surplus? Reinvest in core or lower user fees. Deficit? Cover using guarantor account or raise user fees.

6. Bill monthly to avoid lost revenue due to expired funds

7. Use only fees approved by the RCFO when invoicing customers

8. Invoice and bill only after services are rendered

9. Keep a log of customers’ fund numbers and expiration dates

10.Retain invoices for at least 5 years

R&R: Core Business Manager/Dept. Admin

Rolling basis: Monitor customer’s payments for invoices (accounts receivable) and inform

the core facility director/PI of delinquent accounts (> 90 days overdue) Monitor changes to service volume, user fees, personnel, equipment

purchases, etc. Submit purchase orders, payments for accounts payable Maintain all core facility records for monitoring review and A-133 audit

Monthly: Verify billing is accurate, complete, timely and adequately documented Invoice users and submit journal entries by the 15th business day of the

month Review revenue postings are correct and reconcile with billing log/journal log Review expenses to assure they are correctly allocated as stated in the

approved budget including core facility personnel (correct percent effort), supplies, and other expenses

Assist the core facility director/PI with the review of the fund cash balance

R&R: Core Business Manager/Dept. Admin

Annually: Assist Core Director/PI in reviewing budget/user fee analysis and

submissions to RCFO for review

Incidental: Coordinate with core director and the RCFO on the formulation and

execution of deficit resolution plan

Key processes implemented in past two years and in FY12

Annual budget and user fee review and approval Journal review process and cost transfer of previously

billed core charges New core revenue journal for internal billing (FY12) PeopleSoft Billing module for external billing (FY12)

Need Attention from DA: funds requiring further review as part of monthly JE review process

As department administrators, you may be contacted by either the core or the RCFO for the following issues with funds used to pay for core services:

Outreach to department administrators by the core Non-research sundries, PO funds and hospital cost centers Funds past their project end date Inactive/invalid fund numbers

Outreach to department administrators by the RCFO Research sundries or other non-federal awards in deficit and over budget Federal awards in their final project year that are in deficit and over budget

Cost transfer for previously billed core charges Completing the Request to Transfer Core Charges form including 90 day

justification and required signature from requestor when a fund management issue or any other issue for which the customer is responsible

Expense Details tab

Insight View of core expenses

Insight View of core expenses

Transaction Details tab

Core Charge Transfer Request & Journal Process

1. DA reviews fund and identifies core charge that needs to be transferred to another project

2. DA reviews list of Cores’ journal contacts lists (contains core facility acronyms) and contacts the Core’s administrator (i.e. person that submits core revenue journal)

3. DA fills out the Core Charge Transfer Request Form (will be posted on RM Website this week) including over 90-day justification questions then sends to Core administrator to complete the rest of the required information

4. Core administrator completes the form and sends to Cores JE mailbox

5. Cores Analyst reviews request for completeness; prepares the JE and posts to general ledger

Core Charge Transfer Template Completion

Step 1. DA reviews fund under Insight “Financial Details” tab and identifies core charge that needs to be transferred to another project

11/30/2011$100.00951250216032CCIB_120511_ZORN,E_1011382 SC02SJ956

11/30/2011$221.25951250216032CCIB_120511_ZORN,E_1011534 SC02SJ956

11/30/2011$187.20951250216032CCIB_120511_ZORN,E_1011534 SC02SJ956

Posted ByAmountAccount NumberFund NumberDescriptionJournal Id

11/30/2011$100.00951250216032CCIB_120511_ZORN,E_1011382 SC02SJ956

11/30/2011$221.25951250216032CCIB_120511_ZORN,E_1011534 SC02SJ956

11/30/2011$187.20951250216032CCIB_120511_ZORN,E_1011534 SC02SJ956

Posted ByAmountAccount NumberFund NumberDescriptionJournal Id

Name of submitter:Chief Code: 52EA

Date of submission: 12/19/2011Name of Research Core:

Core fund # (Core use only): 216338

For each core charge you wish to move to a different fund, please provide the following information.Each separate journal line requires a separate entry below.Transfers requested beyond 90 days require justification; see Column O.

Journal ID Accounting Date Amount Journal Line DescriptionFund # to be Credited

New Fund # to be Charged

SC02SJ956 11/30/2011 187.20$ CCIB_120511_ZORN,E_1011382 216032 216034SC02SJ956 11/30/2011 221.25$ CCIB_120511_ZORN,E_1011534 216032 216034SC02SJ956 11/30/2011 100.00$ CCIB_120511_ZORN,E_1011534 216032 216034

Blair Trame RA Approval:

________________________CCIB DNA Core

Step 3. DA completes Core Charge Transfer Request Form and sends to Core’s administratorhttps://resadmin.partners.org/RM_Home/Forms/Alphabet/Core%20Charge%20Txfr%20Request.xls

Step 2. DA reviews Cores’ journal contacts list and contacts the Core’s administratorhttps://resadmin.partners.org/RM_Home/Forms/Tools_Resources/Core/FTR-ToolsCores-ViewAll.aspx

Core Charge Transfer Request: Over 90 Days Justification

Core Charge Transfer Justification: Over 90 DaysNot required for transfers moving core charges from a sponsored project to an institutional or unrestricted fund.

Why are you requesting that the above core charges be moved from one fund to another?

Explain why the core charges are allocable to the project to which you wish to move them.

Why wasn't the transfer requested within 90 days as defined by the PHS Cost Transfer Policy?

What action has been taken to avoid the need for a late cost transfer in the future?

Requestor's Signature: _________________________________________________ Date: _______________

Requestor's Name: ____________________________________________________

Res Finance Mgr Approval: ______________________________________________ Date: _______________

New Core Journal Entry Template

Resources

Research Cores Team webpage on RM Website:https://resadmin.partners.org/RM_Home/Forms/Tools_Resources/Core/FTR-ToolsCore.aspx

Research Cores Policy: http://resadmin.partners.org/RM_Home/Documents/RMPolicies/Policy-ResearchCores.pdf

Partners Research Cores Website: http://www.partners.org/researchcores/home.asp/

Natalie Nguyen, M.P.H., Associate Director, Partners Research Core Facilities617-954-9852 (phone)ncnguyen@partners.org

Elaine Zive, M.B.A., Manager, Research Core Facilities for BWH & McLean617-954-9851 (phone)ezive@partners.org

Yovani Edwards, Financial Analyst, BWH & McLean Research Core Facilities 617-954-9863 (phone)yedwards@partners.org

NIH Policy Statement 2011 RevisionsSee Research Intranet site: http://research.mclean.harvard.edu/PreAward/nihlinks.php.

NIH FY12 BudgetThe recently approved Health and Human Services (HHS)

Appropriations Bill included a small increase of approximately 1% in the NIH budget.  It also included language that reduces the NIH salary cap on extramural grants from Executive Level I, $199,700 in FY11, to Executive Level II, $179,700. 

More on this to follow….

NIH Updates

McLean Research Quarterly Close MeetingFY 11 Research Balance Sheet Analysis

November 16, 2011

Last Updated 04/18/23 32Last Updated 04/18/23PHS, Research Finance Analytics 32

MCL Research Balance Sheet Trends – Summary

Sep FY11 Jun FY11 Mar FY11 Dec FY11September

FY10% Chg

LOC Balance $460 $634 $599 $599 $503 -9%Billed AR $505 $843 $704 $1,556 $374 35%

Unbilled AR $339 $234 $325 $450 $1,059 -68%Grants Receivable $981 $967 $1,008 $2,196 $1,818 -46%

Total Debit Balance $2,285 $2,678 $2,636 $4,801 $3,754 -39%Lockbox $0 $0 $0 $0 $0 0%Reserve -$1,037 -$1,138 -$1,192 -$1,177 -$1,306 -21%

Total Research Receivable $1,248 $1,540 $1,444 $3,624 $2,448 -49%

The overall Research Receivable decreased by $1,200K (49%) from Sept FY10. The components of the change are as follows:

$ (632)K LOC, Billed A/R and Unbilled A/R

$ (837)K Grants Receivable

$ 269K Lockbox and Reserve

$(1,200)K

Last Updated 04/18/23 33Last Updated 04/18/23PHS, Research Finance Analytics 33

MCL Research AR Trends

Sep FY11 Jun FY11 Mar FY11 Dec FY11September

FY10$ Chg FY11

vs. FY10

LOC Balance 460$ 634$ 599$ 599$ 503$ (43)$

Billed AR 505 843 704 1,556 374 131

Unbilled: To Be Billed next 30 days 242 202 259 224 307 (65)

Unbilled: After Final Invoice 5 - (84) (87) (82) 87

Unbilled: Past Project End Date (6) - 24 (186) (149) 143

Unbilled: Contract Renewal Pending 15 (48) (11) - 5 10

Unbilled: Manual Bill 61 (5) 69 96 61 -

Unbilled: Other Fed / NIH - - - 316 428 (428)

Unbilled: Other 4 7 9 90 66 (62)

Unbilled: Temp Bill 7 4 53 36 542 (535)

Unbilled: Project Costing Variance 11 74 6 (39) (119) 130

Total Unbilled AR 339 234 325 450 1,059 (720)

Clinical Trial Billing 176 146 154 139 235 (59)

Milestone / Non-Standard Billing 27 36 128 108 191 (164)

NIH Accelerated Spending 9 69 29 61 39 (30)

Other Accelerated Spending 10 59 - 22 - 10

Renewal Delay 99 30 1 1 191 (92)

Cost Transfer 660 627 682 1,865 1,162 (502)

Total Grants Receivable 981 967 1,008 2,196 1,818 (837)

Total Debit Balance 2,285$ 2,678$ 2,636$ 4,801$ 3,754$ (1,469)$

Last Updated 04/18/23 34

MCL Grants Receivable – Cost Transfer Aging

Sep FY11

Project End Date# of

FundsDeficit Balance Project End Date

# of Funds

Deficit Balance

# of Funds

Increase (Decrease) in

Deficit Balance

<=9/ 30/ 09 2 109,876$ <=9/ 30/ 08 12 139,293$ -10 (29,417)$

10/ 1/ 09 - 9/ 30/ 10 7 118,720$ 10/ 1/ 08 - 9/ 30/ 09 14 85,639$ -7 33,081$

10/ 1/ 10 - 9/ 30/ 11 20 367,978$ 10/ 1/ 09 - 9/ 30/ 10 35 587,711$ -15 (219,733)$

>=10/ 1/ 11 10 63,063$ >=10/ 1/ 10 19 349,537$ -9 (286,474)$

Total Cost Transfer 39 659,637$ 80 1,162,180$ -41 (502,543)$

ChangeSep FY10

Last Updated 04/18/23 35

MCL Research AR Trends

Change

0-30 days 209$ 181$ 28$

31-60 days 148$ 115$ 33$

61-90 days 64$ 68$ (4)$

91-120 days 27$ (16)$ 43$

>121 days 57$ 26$ 31$

TOTAL 505$ 374$ 131$

Sep FY10Sep FY11

Accounts Receivable (in thousands)

($000's) 30 31 30 31 31 28 31 30 31 30 31 31 30Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11

Billed AR 374$ 650$ 794$ 1,556$ 674$ 1,024$ 704$ 634$ 638$ 843$ 593$ 1,065$ 505$

12 Mo Rolling Total Revenue 3,284$ 3,326$ 3,624$ 3,767$ 3,773$ 4,087$ 3,644$ 3,591$ 3,611$ 4,084$ 3,823$ 4,185$ 4,290$

Average Daily Revenue $9 $9 $10 $10 $10 $11 $10 $10 $10 $11 $10 $11 $12Days AR 42 71 80 151 65 91 71 64 64 75 57 93 43

Days A/R, Billed AR Only:

($000's) 30 31 30 31 31 28 31 30 31 30 31 31 30Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11

Research ReceivableLess LOC & Reserves 3,251$ 3,344$ 3,429$ 4,202$ 2,739$ 2,238$ 2,037$ 1,960$ 2,084$ 2,044$ 2,167$ 2,260$ 1,825$

12 Mo Rolling Total Revenue 37,838$ 37,245$ 37,479$ 37,682$ 37,810$ 38,187$ 38,433$ 40,354$ 41,462$ 42,230$ 43,108$ 43,605$ 43,544$ Less 12 Mo LOC draws 26,524$ 26,515$ 26,754$ 27,095$ 27,284$ 27,548$ 27,217$ 26,661$ 27,318$ 26,996$ 27,799$ 28,494$ 28,358$

Less 12 Mo sundry revenue 5,386$ 5,431$ 6,000$ 6,004$ 5,943$ 6,478$ 6,576$ 6,800$ 6,858$ 7,197$ 7,071$ 6,913$ 7,022$ Adjusted 12 Mo Revenue 11,314$ 10,730$ 10,726$ 10,588$ 10,527$ 10,639$ 11,216$ 13,693$ 14,144$ 15,234$ 15,309$ 15,111$ 15,186$

Average Daily Revenue $16 $15 $13 $13 $13 $11 $13 $19 $20 $22 $23 $22 $22Days AR 200 230 265 335 218 196 160 104 104 93 96 101 82

Days A/R, Total Research Receivable (including Grants Receivable, excluding LOC):

Last Updated 04/18/23 36

MCL FY11 Billed AR Rollforward

Total Billed AR:

Billed Contracts/Subcontracts

Detail:

New Billing

Activity Payments Adjustments

Ending

Balance

9/30/2010 365,819$

10/ 31/ 2010 411,313$ (217,340)$ (14,197)$ 545,595 11/ 30/ 2010 422,427 (216,659) 751,363 12/ 31/ 2010 705,366 (550,632) 3,664 909,761 1/ 31/ 2011 123,992 (362,148) (9,978) 661,627 2/ 28/ 2011 518,232 (173,191) 5,484 1,012,152 3/ 31/ 2011 227,813 (554,225) 2,616 688,356 4/ 30/ 2011 261,072 (328,996) (47) 620,385 5/ 31/ 2011 373,358 (288,410) (94,329) 611,004 6/ 30/ 2011 431,907 (250,772) 24,977 817,116 7/ 31/ 2011 20,726 (277,733) 560,109 8/ 31/ 2011 593,690 (214,186) 100,810 1,040,423 9/30/2011 300,884 (749,972) (115,786) 475,549$

FY11 Total 4,390,780$ (4,184,264)$ (96,786)$

NIH LOC ARRA LOC

Other Fed

LOC

Billed

Contracts /

Subcontracts Total

Balance 9/30/10 8,356$ -$ -$ 365,819$ 374,175$

New billing activity 25,541,807 3,795,921 253,518 4,390,780 33,982,026

Payments (25,545,555) (3,790,582) (229,008) (4,184,264) (33,749,409)

Adjustments (4,608) - - (96,786) (101,394)

Balance 9/30/11 -$ 5,339$ 24,510$ 475,549$ 505,398$

Questions?

Contact

Raquel Espinosa

Phone: 617-855-2868

respinosa@partners.org

respinosa@mclean.harvard.edu