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Indirect Cost Distribution Table for UC
Notes:
- following an agreement between UCOP and the state in the 1960s and 1970s, about 1/3 of indirect cost recovery funds (ICR) is repainted as state general funds, and becomes part of UCOP's general distribution of "state" funds to the campuses.
- another 20% goes to "off-the-top" expenses, which may normally contribute towards paying actual facilities and administration costs, as ICR is designed to do.
- another third goes to "opportunity funds," which become discretionary monies divided up at the campuses.
- UC has created a complicated trickle-down system for ICR in which nearly all of it winds up in disretionary funds (which in practice includes 19900 and 19933 monies). This makes it very hard to say how much ICR is returned to the actual projects that generated it - or even to "research" in general.
- Some significant share of lab ICR is likely to wind up in recruitment and retention packages. One lab is shorted in order to set up a new one down the hall, or in another building. To put the point melodramatically, ICR has come to function as a reverse Ponzi scheme in which the ICR of existing labs is skimmed to set up new ones, which will in turn become underfunded in order to set up still newer labs.
- this is a distribution table only. It does not answer the question of whether (ICR) is sufficient to cover actual indirect costs of research. There is in fact always an ICR shortfall. The reverse Ponzi does contribute to a growth in gross research revenues, which are important for rankings, state legislators, donors - as well as the actual production of new knowledge! But they should not be taken to represent net income growth.
- Garamendi funds: In 1990, legislation authored by then state Senator John Garamendi authorized the University to issue, with state approval, “Garamendi bonds” for construction and maintenance of research facilities. The University can use up to 100 % of the indirect cost recovery that results from new research, conducted in or as a result of the new facility, to finance and maintain the facility built with the Garamendi bonds. Each campus retains 100 % of the reimbursement received for projects that meet the conditions of this legislation. This funding is not a fixed proportion of the indirect cost recovery, but varies from year to year, and from campus to campus, depending on the number of projects being funded.
10 comments:
Thanks Chris for posting this. Very informative. It would be interesting to see a breakdown of ICRs generated at each campus and what comes back to each of the campuses as a result - even a sub-breakdown by campus.
Chris, at whose discretion is most of ICR spent? UCOP? The campus chancellors? It seems that a very large portion of the ICR gets shifted out of the particular unit that generated it and is used to support all kinds of other activities -- sort of like a slush fund for administrators.
SIO Prof,
the money that comes to UCSD goes to the VC-Research. A small part of it goes to fund the Acad Sen research money, but most of it is used for startups and pet projects.
I'd like to point out that it is not inevitable that ICR will never cover the full costs of externally funded research. For example, there are PI-led private research organizations unaffiliated with any university that carry out federally funded research in my field.
http://www.nwra.com/
These organizations receive no state subsidies or student tuition, yet they thrive. Presumably, they are able to make ICR cover all the indirect costs of research.
The reason why ICR does not cover all costs of extramurally funded research in UC is because UC has chosen it to be that way. If ICR is diverted to other purposes and used as "discretionary funds", then obviously it will never cover the actual costs of research. But before we conclude that externally funded research at UC will always require a state subsidy, I'd like to see an attempt to actually use ICR for its original purpose.
At UCSD the academic senate subcommittee on budget prepared a statement in 2002 of what happened to federal ICR on the UCSD campus: http://ocga.ucsd.edu/Research/Indirect_Cost_Recovery_Funds.htm
A particularly messy aspect is that the way the funds were divided between UCOP and the campuses was changed in 1999-2000, and the current division involves a grandfathered piece equivalent to the before change amount (inflated as time goes by) as well as the 6/94 division for funds after that time. Thus the proportions in the figure shown in this report are changing with time as 94% of most of the added overhead at a growing campus is returned to the campus.
It is thus a messy picture, however at UCSD there is a fairly formal system for dividing the ICR returned to the campus up (first to Garamendi-type uses, then broadly to Administration and Academic areas (as well as Library and Academic Senate). Perhaps another blog article is needed?
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