Due in part to expansion of research facilities, the rate the University applies to federal research grants for facilities and administration costs has increased from 55 percent in Fiscal Year 2006 to 62 percent this year. In 2010, the University received $89.2 million for federally funded research, more than half its total research budget, according to federal statistics.
Facilities and administration costs — formerly known as indirect costs — essentially function as a tax to cover services provided by universities. For example, if a department needed $100,000 to conduct a research project, it would require an additional $62,000 to pay the University, and so would apply for a total grant of $162,000.
The fees represent a key avenue by which universities recover the costs of research administration as well as maintaining and operating research facilities.
The University's facilities and administration rate is projected to remain stable for the coming fiscal year.
The U.S. Office of Management and Budget caps administrative costs at 26 percent, said Donald Schanck, assistant vice president and University controller. The University's current rate of 62 percent comprises 26 percentage points for administrative costs and 36 percentage points for facilities-based costs.
But the University's administrative spending exceeds the 26 percent cap by 5.8 points, according to figures from 2008. Costs above the cap are covered through other sources of University income, such as tuition and the endowment.
Expansion of biomedical research facilities — such as the 70 Ship Street Laboratory and Sidney Frank Hall for Life Sciences — is the primary reason for rate increases, Schanck wrote.
Facilities and administration costs account for a minority of research dollars, said Roberto Tamassia, chair of the computer science department. The majority of money still goes toward direct costs, including costs of equipment and salaries, Tamassia said.
Tamassia noted the University could be more productive in its research administration. For example, it still uses a paper-based system for travel reimbursement.
The University has "recently begun efforts to improve (its) administrative systems, including travel, that we hope will increase efficiency and reduce the amount of paper processing," Schanck wrote.
But Brown's peer institutions also exceed the 26 percent cap, and increasing government regulations make it harder to contain costs, Schanck wrote. Harvard's current facilities and administration rate is 68 percent, while those of Penn and Yale are 60 and 59 percent, respectively.
In the early 1990s, some universities were using indirect costs to cover items not related to research, according to a May 1991 article published in the journal Science. Stanford University used some funds for costs related to its shopping center, decorations for the president's house and the upkeep of a yacht.
Tamassia said that Brown is "very conservative" in its use of funds, and he would be "very surprised" if the University were ever to use facilities and administration funds in a manner similar to that of Stanford in the 1990s.
Unlike some other institutions, Brown gives a preset percentage of facilities and administration support funds to each department, Tamassia said. While this frees departments from having to negotiate for funding each year, the process can also have its drawbacks, Tamassia said.
"What you would expect is that the higher the volume of research grants, the more research administration work is done within the department, and so the higher the budget for the research administration staff would be provided," Tamassia said. "But there's no direct connection between the two."
In general, Tamassia said the facilites and administration rate at Brown matches the rates of its peers, making it "not a major issue at this time." He added that the staff in the Office of Sponsored Projects has been very helpful in supporting his department.
"Brown has really excellent people that set policies for research-related expenditures, so I think that we're doing great," Tamassia said.
