Department Overhead 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.

The detailed memo on Overhead Rate Structure and process has been updated for FY22 and FY23, as of January 12th, 2021.

Following is a summary of the new rate structure:

  •  The revised overhead rate structure has two components
    • Administrative Rate – charged to all units and includes the full list of administrative functions offered as a service to the entire university campus (i.e. – campus mailing).
    • Facilities Rate – only charged to units that do not pay their own utilities, custodial, repairs and maintenance costs.  This rate includes a full range of base facility functions that are needed to maintain the overall physical operation of the University (i.e. – central utilities).
       
  • The Administrative Rate structure has been established as recognition that larger departments generally have increased levels of self-funded administrative support (e.g., HR, IT, media, purchasing, contracts, etc.) within their organizations, as well as economies of scale.
     
  • 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.
     
  • The current list of approved limited overhead assessment waivers.
     
  • 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

 

Assessment Process and Rates

  • Administrative Overhead Rate:  All units will pay the administrative rate.  That maximum rate for FY22 and FY23 is 6.6%.  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 - Up to Rate Overhead total
$ Up to 5,000,000 6.60% $330,000
$5,000,001 - 10,000,000 5.97% $628,000
$10,000,001 - 20,000,000 5.44% $1,172,000
$20,000,001 - 30,000,000 4.80% $1,165,000
Above $30,000,000 4.26%  

 

  • 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 5.0% 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.   
  FY19 FY20 FY21 FY22 FY23
Maximum Rate –
Admin & Facility Rate
11% 11.5% 12% 11.6% 11.6%
Maximum rate –
Admin Only
6.0% 6.5% 6.5% 6.6% 6.6%
Research Service Centers –
Internal Overhead Rates
0% 0% 0% 0% 0%
Research Service Centers –
Overhead Rate Charged to External Customers - REVENUE
10.8% 11.0% 11.0% 10.4% 10.4%

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    
Base Amounts - Up to Overhead total FY19 FY20 FY21 FY22 FY23
$              5,000,000 $        285,000 6.0% 6.5% 6.5% 6.6% 6.6%
$            10,000,000 $        550,000 5.6% 5.88% 5.88% 5.97% 5.97%
$            20,000,000 $     1,030,000 5.1% 5.36% 5.36% 5.44% 5.44%
$            30,000,000 $     1,460,000 4.5% 4.73% 4.73% 4.80% 4.80%
Above $30,000,000   4.0% 4.2% 4.2% 4.26% 4.26%

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

 

FY 2020 - Large Units FY20 Expenditure Base FY22& FY23 Structured Rate FY22 & FY23 Effective Rate
Intercollegiate Athletics Rev/Exp $   61,780,191 3,006,320 4.9%
Residence Hall Operations $   36,790,790 1,977,208 5.4%
Health Services $   13,536,070 839,450 6.2%
Total   5,848,661  

 

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

Expenditures Admin overhead charged
First 5 million $330,000
Next 5 million $298,410
Next 4 million $217,413
Total $845,823
Total Effective Rate 6.04%

Additional Information

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