F & A Recoveries (Denise Barlow, Director, Office of Finance; Ray Hamilton, Executive Director of
Budget & Finance; Verna Howard, Office of the Treasurer; Suzann Thompson, Office of Finance):
Denise Barlow described the F&A process at the Knoxville campus. The current F&A rate, negotiated with
the federal government, is 45%. At the end of the fiscal year, 25% of the amount is given back to
the college/unit and 75% is kept centrally. Colleges/units may petition to carry over 30% of this into
the next fiscal year. Several questions were answered by the financial representatives:
- Why was the carryover rate set at 30%? Tradition.
- What do we do with F&A? This covers physical plant, utilities, human resources, administrative
offices, research funds, such as SARIF, etc.
- Can one tell how much is spent on research at the departmental level? Special accounts can be set
up to show this.
- What is the timing of how the federal government pays F&A costs to UT? The University
bills the government on a monthly basis.
The F&A rate of 45% was recently renegotiated (every 3 years) with the help of a consultant. A handout
with the rate breakdown was distributed at the meeting. More questions were asked:
- How competitive is our rate? Some institutions have lower rates, while others have
higher rates. Our rate was recently increased from 43% to 45%.
- How do we compare with other institutions in the southeast? The rates of those institutions
are from the mid-40's to the low 50's.
- More federal contracts are requiring that faculty time be free during an academic year. Will
this affect F&A? Yes, this could reduce our rate.
- Why not credit a college or unit on a monthly basis, rather than at the end of the
fiscal year? Because, historically, the University collected during one year and distributed
during the following year.
- What about the tendency of F&A funds to "disappear" at the end of the year? There is a sense
that one must "spend or lose" the funds. This is an issue that should be taken up with
- What guarantees are there for a PI to get any of the college/unit F&A funds? There is no
guarantee. McCay stated that the disposition of the funds is at the discretion of the deans
C. A. Speer objected to the questions/discussion about F&A and colleges/units. Bill Blass
answered that it was important that we have this discussion because there is not enough
communication between faculty and administrators. Alfonso stated that the issues are complicated.
With the state funding being as it is, the deans need other sources of funds. Ideally, the
funds should go back into research.