DAR Rate Setting Principles, Policies and Practices

I. The DAR uses the “Cost Analysis and Rate Setting Manual for Animal Research Facilities (2000)” of the NIH as the basis of practice and OMB Uniform Guidance (2CFR200).

Executive Summary of NIH Principles as Practiced by DAR

1. Billing rates are based on costs.
2. The objective is to operate as closely as possible to a break-even basis.
3. Billing rates are established for all services that can be specifically identified to
   users and involve significant activities of the ARF.
4. All costs associated with providing an animal service are included in the total
   cost of each service.
5. Costs are treated consistently as either direct or support costs (see Definitions
   below).
6. The assignment of costs to cost centers and the allocation of support costs to
   direct cost centers is based on beneficial relationships.
7. Billing units logically represent the service provided.
8. All users are charged consistently at full rates.
9. Revenue and costs are compared at least annually to identify surpluses and
   deficits for each service.
10. Adjustments are made to compensate for surpluses or deficits (variances).

Definitions:

• Direct costsare defined as costs incurred for the husbandry of animals and for other services
  provided by the animal research facility (ARF) for the benefit of specific projects, for which billing
  rates are established. These typically are comprised of the sum of salaries, wages and consumable
  materials. Labor costs are distributed based upon time reporting of staff (one week per month
  year-round) and consumable materials are distributed by species (e.g. songbird feed to songbirds,
  dog anti-worming agents to dogs, fur mite treatments to mice, tuberculin to monkeys, etc.), where
  applicable, or generally, in the case of materials used or potentially used by myriad species, based
  upon the “extent” of the activity (see “Internal Support Costs” below).
  
  • Internal Support Costs are those incurred by the ARF which support multiple cost centers, but
  are not specifically identifiable to any one direct cost center. ARF internal support costs include
  those such as internal ARF administration (“animal care and support F&A), animal health care,
  training, and cage washing. These costs must be allocated to the direct cost centers and included
  in the billing rates. They are typically distributed by a combination of census and relative
  quotient factor (RQF) in consideration of housing enclosure size, intensity of activity-related
  effort where clear, and wear-and-tear on facilities and equipment. This combination of census and
  RQF is what is termed in the “business” as “equivalent animal units” or “EAU”.

II. Sources of DAR Income and Attribution of Expenses

1.  Income
   1. Per diem and service charges
   2. Medical school, College and School of Public Health support
      1. IACUC service, including compliance monitoring activities
      2. Research skills training
      3. Construction and renovation planning and project management
      4. Security
      5. Occupational health and safety
      6. Pest control
      7. Utilities
      8. Other: senior level consultations, faculty recruiting support, disaster planning, some administrative costs
   3. Capital equipment infrastructure account
      1. Construction project costs
      2. Renovation and upgrade project costs
      3. Physical plant maintenance
      4. Some service contracts
      5. Equipment purchases
2. Distribution of expenses
   1. Labor: via monthly cost accounting time card (sampling one week per month; 12 weeks/year)
   2. Supplies & equipment: to specific species or services, where applicable, otherwise spread in an EAU ratio fashion.