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University of Wisconsin–Madison

Research Cores Roadmap

UW–Madison cores are shared resources which offer a wide range of services dedicated to the support of research in life sciences, physical sciences, social sciences, and the humanities.  Cores provide access to instruments, technologies, services, training, and expert consultation.  Cores typically recover all or a portion of their costs through user fees, although some subsidized core services may be accessible without direct charge to the user.

Research cores are service centers of excellence, research innovators, and small businesses.  Successful and compliant financial management requires a comprehensive approach to managing current and future business operations.  This document provides a broad outline of best practices for core operations, including the principles of Uniform Guidance, models for rate-setting for internal and commercial clients, and data design for forecasting and strategic planning.

  1. The financial operation of the core must be compliant with federal guidelines (Uniform Guidance), UW System and UW–Madison policies, and college and department requirements.
  • Uniform Guidance applies to federal awards and internal users
  • operational costs charged to internal users must be reasonable, allocable, allowable, consistent
  • inclusion of some costs in internal user fees may be restricted by additional UW policies
  • cores must be revenue neutral for internal users over time (3-5 years)
  • UW System, UW-Madison, colleges and depts may establish annual surplus or deficit limits

 

  1. A full-cost analysis of core operational costs (direct expenses) is critical to ensure appropriate user fees, provide transparency, and promote sustainability of the core.
  • a full-cost analysis captures all the costs of providing service, access, or instruments
  • cost analysis is the first step in a process that will include setting internal & external user fees
  • a cost analysis is not a rate-setting exercise: costs are not equal to user fees
  • the analysis process fosters active and ongoing engagement of stakeholders
  • the analysis is an inclusive exercise with core management, administrators, and financial analysts

 

  1. Most cores cannot be revenue neutral from internal user fees alone: cores require a portfolio of support including user fees, and dept, college and campus investments.
  • cores typically recover only 30 – 80% of direct costs from internal user fees
  • a sustainable portfolio is specific to the core and its development stage
  • external (commercial) customers can provide an important flexible revenue source
  • departments and colleges may provide salary support for core staff
  • campus, college and dept funds may contribute to equipment purchase, repair or upgrade
  • federal instrumentation programs (NSF MRI & NIH S10) may fund large investments

 

Operational Best Practices

  • a full-cost analysis should be completed and reviewed and updated at least once per year
  • documentation of the analysis and financial decisions should be maintained and reviewed
  • internal user fees must be set at or below full recovery for direct costs
  • external commercial user fees must be set at or above full recovery for direct and indirect costs, up to market rate (required by UWSA policy 12-1)
  • external non-profit user fees must be set at full recovery for direct and indirect costs (academic, federal and non-profit)
  • user fees must be publicly available and updated annually
  • billing should occur at regular intervals and should be timely (monthly is typical) and accurate (invoices match public price list)
  • user fees must consistent within each customer type – discounted fees are not allowed
  • subsidies can be used to pay all or portions of user fees for group members (e.g. Cancer Center)
  • pre-billing is prohibited for internal users and federal grant customers
  • partial pre-payments or deposits can be required for external commercial clients
  • user agreements are required for external clients

 

Strategic Best Practices

  • track activity for instruments, service lines, projects by user, type and temporal pattern
  • review activity on a quarterly, semi-annual or annual basis
  • interrogate the data to identify areas of growth, constraint, or contraction
  • review data with a core advisory board and leadership
  • develop and update strategic plans for the coming 3 – 5 years that addresses portfolio of support, equipment management, and professional development

 

Please contact Suzanne Schlecht in the Madison Budget Office or the Office of Campus Research Cores with questions.

[updated Oct 20, 2021]