Maximus, Inc. · NYSE:MMS
Maximus — MAXIMUS Higher Education Webinar (July 2019)
38 slides from Maximus's conference presentation, Jul 16, 2019
Slide 1: Information for F&A Short Form Institutions
Better Solutions For Better Lives Information for F&A Short Form Institutions Mitzi Singleton Higher Education Practice July 16, 2019 1
Slide 2: Agenda
Agenda About MAXIMUS F&A Proposal – what it is Purpose of F&A Proposal Process/Steps of preparing Short Form F&A Proposal Indirect Cost Pools and Bases Flowchart and helpful web link 2
Slide 3: MAXIMUS Higher Education Practice
MAXIMUS Higher Education Practice • Serves more than 200 colleges and universities in 49 states plus Puerto Rico and the U.S. Virgin Islands ̶ 90 of top 100 research institutions ̶ Ranging from <$1M to >$1B in research • Headquartered in Northbrook, Illinois ̶ Satellite offices in: Colorado Springs,
Slide 4: MAXIMUS Higher Education Practice: F&A Consulting Services and Software
MAXIMUS Higher Education Practice F&A Consulting Services • F&A Cost Rate Proposal Preparation (Long and Short Form) • Negotiations (DHHS‐CAS & ONR/DCAA) • Space Surveys/Reviews • Fringe Benefit Rates • Federal Disclosure Statement (DS‐2) and Direct Costing Policy • Service Centers and/or Recharge C
Slide 5: MAXIMUS Higher Education Practice: Other Services and Products
MAXIMUS Higher Education Practice Other Services and Products • Internal Controls Consulting and Effort Reporting Software (ERS) • Uniform Guidance Diagnostics and Compliance Consulting • Pre and Post Award Consulting Services and Training – Research Operational Reviews – Business Process Review and
Slide 6: What is the F&A Rate Proposal?
What is the F&A Rate Proposal? • The documentation prepared by an institution in accordance with the federal cost principles in Uniform Guidance, 2 CFR Part 200 to validate its claim for the reimbursement of F&A costs. • There are two methods for preparing F&A Rate Proposals, Long Form and Short For
Slide 7: Reasons for preparing F&A Proposal
Reasons for preparing F&A Proposal • To obtain a negotiated F&A rate so institutions can be reimbursed for overhead / indirect costs incurred during the performance of work on federal (and, non-federal) sponsored agreements. • Rates are applied to Federal (and, non-federal) grants (e.g., NIH, NSF, N
Slide 8: What are Indirect Costs (F&A)?
What are Indirect Costs (F&A)? Indirect (F&A) costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored activity, or any other institutional activity. (2 CFR 200 Appendix III, A.) 8
Slide 9: Information about the Simplified Method
Information about the Simplified Method Short Form Method is available to small institutions where there is $10 million or less of sponsored direct costs Relies on audited financial statements Very limited additional documentation Distribution of costs based on either: • Salaries and Wages • Salarie
Slide 10: Steps for preparing the Short Form Proposal
Steps for preparing the Short Form Proposal 1. Procure Financial Data 2. Procure Asset/Depreciation Data 3. Procure Space statistics 4. Reconcile to Financial Statement 5. Reclassify Costs to UG Cost Categories 6. Elimination Of Costs 7. Adjustments for Interest / Depreciation 8. Calculate Proposed
Slide 11: Financial Data
Financial Data • Operating expenses from Financial Statement must be reconciled • Some costs may be added to the F&A proposal as an adjustment • The financial data should represent the activity for a fiscal year 11
Slide 12: Asset Data – Depreciation
Asset Data – Depreciation UG, Appendix III, section B2 Gather asset records to identify buildings and equipment. Reconcile depreciation to amount recorded in Financial Statements. Determine “allowable” depreciation for Short Form F&A cost proposal. 12
Slide 13: Space Statistics
Space Statistics • Space statistics for OIA activities • Determine by building, department, type of space 13
Slide 14: Reclassify Costs to UG Categories
Reclassify Costs to UG Categories 1. UG, Apdx III, section H 2. Expenditure data needs to be scrutinized at the account and department level. Facilities Cost Examples • Library costs may be classified as Academic Support, but they are defined as facilities costs by UG. • Campus Security is often cla
Slide 15: Reclassify Costs to UG Categories: Administrative Costs
Reclassify Costs to UG Categories Administrative Cost Examples • Institutional Support is typically defined as General Administration. • Department Administration costs are those of Department Heads such as Department Chair and College Deans. ̶ Requires salary and fringe benefit expenses, by title c
Slide 16: Reclassify Costs to UG Categories: Unallowable Costs
Reclassify Costs to UG Categories Unallowable Costs • UG, sections 200.420 to 475 • Costs such as Alumni Relations and Fundraising need to be classified as Other Direct Activity. • Financial data needs to be scrutinized at the Object / Expense Code level for: ̶ Entertainment expenses ̶ Certain legal
Slide 17: Elimination of Costs
Elimination of Costs UG, Apdx III Prescribes Expenditure Eliminations • Patient care & tuition remission • Expressly Unallowable • Scholarships and fellowships • Subcontract expenditures above $25,000 • Capital assets • F&A cost recovery 17
Slide 18: Adjustments
Adjustments UG, Apdx III, section B3 allows for inclusion of interest costs on capitalized debt. Library Revenue Depreciation net of OIA activities 18
Slide 19: All costs are aligned to UG!
All costs are aligned to UG! • You must now determine which rate base (denominator) to use. • UG allows three different bases: ̶ Salaries and Wages ̶ Salaries and Wages + Benefits ̶ Salaries and Wages + Benefits + Other Expenses (“Modified Total Direct Costs”) • The first is normally the highest rat
Slide 20: The Final Package
The Final Package 1. Print out final schedules + Rate Schedule 2. Footnotes on Reclassifications, Eliminations and Adjustments 3. UG requires that certifications be signed by someone in upper management 4. A checklist is also required to be filled out and signed by upper management 5. Send the packa
Slide 21: The Rate Negotiation
The Rate Negotiation 1. Federal Cognizant agency will audit the cost report and will respond with requests for additional data. 2. Then, the institution will negotiate a rate with CAS. 3. The final rate is usually lower than the proposed rate. 4. UG provides that Institutions “normally” establish 4-
Slide 22: Considerations
Considerations CAS requires that Universities must have at least 1 active federal sponsored agreement The average the F&A cost proposal work takes 8 to 12 weeks to complete. After submission, CAS normally takes 3 to 6 months for reviews, data request and then final negotiations 22
Slide 23: Establishing Short Form F&A Cost Pools
Establishing Short Form F&A Cost Pools 23 23 23
Slide 24: Indirect Cost (F&A) Components
Indirect Cost (F&A) Components Facilities Administrative Operations and General administration and maintenance general expenses Library Departmental administration Building and Equipment Sponsored projects depreciation administration Building interest Student Administration and Services (long form o
Slide 25: Operations and Maintenance
Operations and Maintenance Administration, supervision, operation, maintenance, preservation, and protection of the institution’s physical plant. (2CFR200 B. 4.a.): • Janitorial and utility services • Repairs and ordinary alterations of buildings, furniture, and equipment • Grounds maintenance • Mai
Slide 26: Library
Library Costs incurred for the operation of the library (2CFR200 B. 8a.): • Cost of books and library materials • Does not include costs incurred in purchasing rare books with no value to federal awards, e.g. museum-type books 26
Slide 27: Building and Equipment Depreciation
Building and Equipment Depreciation Portion of costs of buildings, capital improvements to land and buildings, and equipment computed in accordance with 2 CFR 200.436: • Depreciation amount in accordance with GAAP 27
Slide 28: Building and Equipment Interest
Building and Equipment Interest • Interest on debt associated with certain buildings, equipment, and capital improvements used in support of federal awards 28
Slide 29: General Administration and General Expenses
General Administration and General Expenses Expenses for general executive and administrative offices and other general expenses which do not relate solely to any major function of the institution: instruction, organized research, other sponsored activities, or other institutional activities: • Pres
Slide 30: Departmental Administration
Departmental Administration Expenses incurred for administrative and supporting services that benefit common or joint departmental activities or objectives in academic deans’ offices, academic departments and divisions, and organized research units (institutes, study centers, and research centers):
Slide 31: Sponsored Projects Administration
Sponsored Projects Administration Expenses incurred by a separate organization established primarily to administer sponsored projects, including grant and contract administration, special security, purchasing, personnel, administration, editing/publishing research: • Pre award and non-financial post
Slide 32: Student Administration and Services
Student Administration and Services Expenses incurred for the administration of student affairs and for services to students: • Dean of students • Admissions • Registrar • Counseling and placement services • Student advisers • Student health and infirmary services • Catalogs • Commencements and conv
Slide 33: Appendix III, Section D - The Short Form
Appendix III, Section D - The Short Form Advantages compared to a Long Form Proposal • Relatively easy to prepare and negotiate • Uses institutional financial statements • Uses formula approach --1 indirect pool and 1 direct base • Does not need a space survey • Does not need a library allocation •
Slide 34: Useful Link
Useful Link Informative approach and useful information for calculating the short form F&A rate and example of proposal format for submission. https://rates.psc.gov/fms/dca/shortform%20example.pdf 34
Slide 35: F&A Calculation Process – Short Form Simplified Method
F&A Calculation Process – Short Form Simplified Method 35
Slide 36: Upcoming Webinars
Upcoming Webinars Tips for Becoming a CRIS Power User August 20 | 2:00 p.m. ET Alternative Methods for Documenting Compensation – October 2019 36
Slide 37: Upcoming Workshop and Annual Meeting
Upcoming Workshop and Annual Meeting 32nd Annual MAXIMUS Higher Education Practice Meeting September 11 to 14 Gaylord Opryland Resort & Convention Center in Nashville, TN F&A Long Form Training Workshop September 10 to 12 Gaylord Opryland Resort & Convention Center in Nashville, TN 37
Slide 38: Questions/Comments – Contact Info
Questions/Comments – Contact Info Mitzi Singleton, CPA Senior Manager, Higher Education Practice 859.533.4061 [email protected] 38
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