UNIVERSITY OF PITTSBURGH POLICY 11-01-06

CATEGORY:        RESEARCH ADMINISTRATION
SECTION:         Research
SUBJECT:         Research Allocations
EFFECTIVE DATE:  October 25, 1993 (Revised February 13, 1995)
PAGE(S):         4

I.   Summary
     
     This policy has the following features:
     
     - The University will make annual, identifiable, and predictable
       "research allocations" to all units engaged in sponsored
       research.  The allocations are keyed to the indirect costs
       (IDCs) recovered in the preceding fiscal year.  This policy
       affects Schools and Centers outside of the University of
       Pittsburgh Medical Center (UPMC) but is comparable in concept
       to that used in our Medical Center.
     
     - The first 50% of the full, applicable University IDC rate will
       be credited to the general fund to help support utility costs,
       general administration, and facilities.  Academic offices and
       Principal Investigators (PIs) will receive the remainder of
       the IDC collected according to a formula provided, and
       administer and use it directly for research development and
       infrastructure support.
     
     - Losses to the general fund will be minimized by the resulting
       stimulation of external funding, the recent increase in IDC
       rates, improved IDC collection, and the use of the Deans'
       research allocations for rapidly growing budget items, such as
       expenditures for start-up costs, proposal cost sharing, and
       research equipment purchases by Schools and Departments.
     
     - Simultaneously, appropriate direct budgeting of some
       significant infrastructure support will be expected for grants
       and contracts that yield no or less than the full IDC recovery
       to gain parallel support for departmental needs.
     
     - The predictable and annually growing research support for
       Schools, Centers, and Departments will encourage better
       planning by units, be more visible to faculty, and provide a
       strong incentive for Schools and researchers to support full
       IDC recovery.  It will reward wiser and permit longer range
       budget decisions at the School and Department level and thus
       enhance the University research mission.

II.  Definitions
     
     Research Allocations:    A hard money allocation to University of
                              Pittsburgh Schools and major Centers not
                              part of the University of Pittsburgh
                              Medical Center (UPMC).  Allocations
                              restricted to research support.
     
     Indirect Cost (IDC)      Charges for research support costs not
     Rates:                   directly billed to grants and contracts.
                              Rates approved by the Department of
                              Health and Human Services and applied to
                              sponsored research projects for IDCs
                              incurred by the University.
     
     Fully Recovered IDC:     IDC collected at audited University
                              rates.  Does not include IDC recovered
                              at below audited rates.
     
     Hard Money:              Funds controlled by the University, not
                              subject to restrictions imposed by
                              external agencies.
     
     Soft Money:              Funds provided by external agencies for
                              defined tasks and subject to contractual
                              restrictions.
     
     Research Development     A hard money fund administered by the
     Fund (RDF):              Vice Provost for Research and computed
                              on the basis of IDCs recovered at
                              audited IDC rates.

III. Policy Objectives
     
     - Enhanced predictability and effectiveness of University
       research support.
     
     - Greater visibility of University support.
     
     - Annually negotiated and variable funds for support of research
       by Schools and major Centers are replaced by a computed and
       predictable "research allocation."  The research allocation
       will be a budget line item and will rationalize and stabilize
       unit resources for infrastructure and other support of
       research.  It is related to IDC recovery, i.e., to the level
       of sponsored research activity and, therefore, is self-
       adjusting for inflation and increased sponsored research
       activity.  It will make University hard money support for
       research readily visible to faculty and encourage and reward
       diligent IDC recovery.  The explicit and predictable annual
       research allocation helps relieve academic units and senior
       administrators of difficult recurring research budget
       negotiations.  It encourages and permits longer range and more
       ambitious research planning by the Schools and thereby
       enhances progress of the University.

IV.  Policy
     
     The research allocation for Schools and major Centers is modeled
     after, and will supplement, the existing Research Development
     Fund (RDF).  IDC recovery at the audited rates will serve as the
     reference basis for the research allocation for the subsequent
     year.
     
     The allocation for research support will be made annually to
     Schools and researchers, based on the actual IDC recovery of the
     preceding fiscal year.  The research allocation amount is equal
     to the IDCs recovered in excess of 50% of the full IDC rate and
     is distributed to academic units and Principal Investigators
     (PIs) according to the following formula:
          
          Academic Unit:  Deans and Departments/Centers     30%
          Principal Investigators (PIs)                     10%
          Provost's Research Development Fund (RDF)          9%
          Office of Research                                 1%
          
          Academic Departments will receive 1/6 of their academic
          unit's share (5%) or a negotiated larger share if asked to
          assume some obligations previously met by the Dean, such as
          cost sharing for start-up, etc.
     
     Research allocation funds are to be used for cost sharing for
     proposals, start-up costs for both current and new faculty,
     repair and minor renovation of research facilities, purchase of
     major research equipment, and closely related research
     expenditures.  They are also intended as seed money and to
     improve our competitive position in attracting sponsored research
     projects.  Some instructional support like research experience
     for undergraduates shall be permitted.  These funds may be used
     for the support of graduate students, shops, technicians, etc.,
     to the extent that such use demonstrably improves the present
     research environment and furthers the research mission of the
     School.  They may not be used for salaries of tenured and tenure-
     stream faculty, administrative support, or to substitute for
     support traditionally granted from the base budget.
     
     Starting with fiscal 1994, all grants and contracts normally will
     be processed through the School where the sponsored faculty
     member has his or her primary appointment.  However, since the
     University encourages the pursuit of interdisciplinary topics and
     collaboration in research and has established the University
     Centers for this purpose, faculty members may submit their grants
     or contract proposals through the appropriate Center with the
     written concurrence of both Dean and Center Director.
     If an interdisciplinary project is affiliated with a Center that
     provides significant research support, the Deans must share the
     earned research allocation with the Center.  The sharing
     arrangements for a given project should be stable and must be
     agreed upon in negotiations between the Center Director and the
     responsible Deans at the time of the proposal submission.
     Disagreements shall be mediated through appeal to the Vice
     Provost for Research.  (For sponsored faculty associated with a
     major Center, the unit's research allocation typically might be
     shared between the School of their primary appointment and Center
     in approximately equal parts.  However, there may be situations
     in which most of the funds should go to the Center.)  The PI's
     research allocation should remain at the 10% level.
     
     Future research allocations will be estimated based on current
     sponsored research activity.  The exact annual research
     allocation amount will not be available until September or
     October; however, units may begin charging their research
     allocation account on July 1.  Unlike unrestricted annual budget
     items, the restricted research allocations will have a two-year
     budget cycle from July 1.
     
     State, foundation, and industry grants often severely limit IDC
     recovery.  Therefore, units depending strongly on such sponsors
     may derive only small earned research allocations and
     insufficient institutional support.  With the enactment of this
     policy it becomes necessary that Deans, Directors, and Department
     Chairs insist that PIs with grants where the IDC rates are less
     than audited rates put specific and appropriate research or
     institutional support items into their direct grant budgets
     (e.g., partial coverage of faculty salaries) so that equivalent
     departmental funds are released for infrastructure support.
     
     Items to be counted as "infrastructure support" include Graduate
     Student Researcher support, secretarial and technical help that
     replaces services previously offered by the Department, soft
     money payments for central computing charges, broadly shared
     equipment, and replacement salary for the investigators (but not
     summer salary or overload payments).  Deans, Directors, and
     Department Chairs may demand that such direct infrastructure
     support items plus any actual IDC payments be comparable to the
     applicable IDC charge for the grant.  (In other words, directly
     charged institutional support items may be required to substitute
     for uncollectible IDC.)

V.   Illustration for Distribution of Research Allocations to Units
     
                                      Percent of total IDC
     Research allocation from projects    Old       New   New formula
     billed at the audited Indirect    formula   formula    example
     Cost (IDC) rates:                     %          %     (in $)
     
     Total University IDC collected,
     (example):                           100       100      $200,000
          Less Central Pool                90        50       100,000
                                         ____________________________
     
          Amount available for
          distribution                     10        50      $100,000
     
     Deans (max)*                           3        25       $50,000
     Department or Center (min)*            0         5        10,000
     Principal Investigator (PI)            3        10        20,000
     Provost's Research Development
     Fund (RDF)                             3         9        18,000
     Office of Research                     1         1         2,000
                                         ____________________________
     
          Portion distributed              10        50      $100,000
     
     Research allocation from projects
     billed below the audited IDC rates:
     
     Policy:  Only the amount over 50% of full IDC rate will be
     distributed to units.
     
                                          Old       New   New formula
                                       formula    formula   example
                                           %          %     (in $)
     
     Example $132,000 collected of
     $200,000 IDC due:                     66        66      $132,000
          Less Central Pool                66        50       100,000
                                         ____________________________
     
          Amount available for
          distribution                      0        16       $32,000
     
                           Reduced scale      Reduced scale
                                factor      %      times
     Deans (max)*                0.32       0        25       $16,000
     Department or Center (min)* 0.32       0         5         3,200
     Principal Investigator (PI) 0.32       0        10         6,400
     Provost's Research
      Development Fund (RDF)     0.32       0         9         5,760
     Office of Research          0.32       0         1           640
                                         ____________________________
     
          Portion distributed               0        16       $32,000
     
     *Deans are encouraged to pass on more than the formula amount to
      Departments or Centers.  (Deans and Directors of major Centers
      negotiate Dean/Center split with appeals to the Vice Provost
      for Research.)