Department Assessments

Department Assessments

 

Overview

Effective July 1, 2013, the university implemented changes to the overhead rate structure for auxiliary operations, designated operations, service centers and the ASUO.  These changes are intended to establish a new comprehensive rate structure, update the cost pools from the prior rates, and clearly identify the basis for the overhead rate charges. Effective, July 1, 2015, overhead started being charged to royalty funds.

For detailed memo on Overhead Rate Structure and process - click here.

Following is a summary of the new rate structure:

  • The revised overhead rate structure has two components
    • Administrative Rate – Charged to all units.  click here to see functions covered by this administrative rate charge.
    • Facilities Rate – only charged to units that do not pay their own utilities, custodial, repairs and maintenance costs.  click here to see the functions covered by the facilities rate charges.
  • The Administrative Rate structure recognizes that economies of scale exist for larger units; for detailed rate structure click here.
  • Rates will be adjusted upwards by at most 1% per year to allow units time to adjust their product and service pricing and absorb these cost changes in their budgets.
  • The current list of excluded account codes will be maintained.  For list of excluded account codes click here.
  • The rate charged to Research Service Centers will depend upon whether the work is being done for UO departments and faculty (Internal) or outside customers (External)
    • Internal sales of products and services (Account Type 59) – exempt from overhead charges
    • External sales of products and services (Account Type 51-58) – full rates apply - REVENUE

Revised Assessment Process and Rates

  • Administrative Overhead Rate:  All units will pay the administrative rate.  That maximum rate for FY18 is 5.7%.  However; the following structured rate schedule will be applied in recognition that larger units generally self-fund increased levels of administrative support services (e.g., HR, IT, media, purchasing, contracts, etc.) within their units.
Base Amounts Rate
$ Up to 5,000,000 5.7%
$5,000,001 - 10,000,000 5.3%
$10,000,001 - 20,000,000 4.8%
$20,000,001 - 30,000,000 4.3%
Above $30,000,000 3.8%

 

  • Facility Overhead Rate:  Those units that do not pay for their own utilities, custodial support, and repairs and maintenance needs will be charged the facility rate in addition to the administrative rate.  The facility rate is 4.8% and covers the cost of providing these services. 
  • Maximum Rates:  Rates will be adjusted slowly to give units an opportunity to absorb these increased costs in their budgets. Following is a chart outlining the maximum rates charged per year.  
  FY16 FY17 FY18 FY19
Maximum Rate –
Admin & Facility Rate
10% 10% 10.5% 11%
Maximum rate –
Admin Only
5.4% 5.4% 5.7% 6%
Research Service Centers –
Internal Overhead Rates
0% 0% 0% 0%
Research Service Centers –
Overhead Rate Charged to External Customers - REVENUE
10.2% 10.2% 10.8% 10.8%


Administrative Overhead - Structured Rate Schedule

The following structured rate schedule will be applied to all units for the administrative overhead rate based upon their expenditure base:

Structured Rate Schedule
Expenditure Base - Up to Overhead total FY17 FY18 FY19
$              5,000,000 $        285,000 5.40% 5.70% 6.00%
$            10,000,000 $        550,000 5.00% 5.30% 5.60%
$            20,000,000 $     1,030,000 4.50% 4.80% 5.10%
$            30,000,000 $     1,460,000 4.00% 4.30% 4.50%
 
Above $30,000,000   3.50% 3.80% 4.00%

Units that have historically had expenditures above $5 million include: Athletics, Health Center, and Housing.

 

FY 2015 - Large Units FY15 Expenditure Base FY18 Structured Rate FY18 Effective Rate
Intercollegiate Athletics Rev/Exp $                   53,712,187 2,361,063 4.4%
Residence Hall Operations $                   34,161,667 1,709,760 5.0%
Health Services $                   14,806,971 804,769 5.4%
Total   4,875,593  

 

Following is a detailed example of how the accounting would work for a unit with $14 million of expenditures:

Example: $14 million
First 5 million $285,000
Next 5 million $265,000
Next 4 million $192,000
Total $742,000
Total Effective Rate 5.3%


Additional Information

For additional information please contact Budget and Resource Planning at budget@uoregon.edu

 

Comparative Overhead Rates

As part of this project, the advisory group researched comparative overhead rates.  Data was collected from 20 PAC-12,OUS, and large public universities.  For a summary chart of the comparative rates, click here.

Implementation Process

Budget and Resource Planning staff will be meeting with campus budget managers and affected units to finalize implementation details.  

Overhead Waivers

All current exemptions will expire on June 30th, 2017. Units may submit a request for an exemption that begins July 2017.  Requests for exemption, with justification, MUST be filed with Budget and Resource Planning no later than January 31, 2017. Units should not assume that historical exemptions will be extended. Click here for the current Fund Codes exempted.