Situation improving for the indirect costs of research
When it comes to doing research, there are really two kinds of costs—those you see, and those you don’t.
The costs you see are typically day-to-day expenses tied specifically to a project and required to keep it running. Examples include the cost of technicians and research assistants, supplies, telecommunications or travel.
The costs you don’t see are often apportioned to a number of projects and are sometimes difficult to quantify. These costs include the heat, cooling, water and power required to keep research labs and offices humming, the cost of maintaining up-to-date collections in the library, administering research grants, maintaining information technology services, undertaking building renovations or even new construction.
At most universities, the direct costs of research—the costs researchers typically see—are normally covered by researchers themselves, through funds made available internally or externally in the form of research grants. The hidden or indirect costs of research are typically paid for by the institution, in the form of funding transfers to the Faculties or units responsible for providing these services. At Western, these include Information Technologies Services, Western Libraries, Physical Plant, Research Accounting, and so forth. These units are funded centrally by the University and are mandated to provide the best possible service to the researcher. Occasionally, user fees are charged, but most often, these services are provided invisibly and without direct costs incurred to investigators.
Finding the money to support the indirect costs of research has historically been a challenge. While the federal government is constitutionally mandated to support research, historically it has only funded the direct costs associated with this enterprise. Consequently, funding to cover the indirect costs of research has had to be found from within the University’s operating budget. Aside from tuition, the main source of operating funding for universities comes from the Province, with the lion’s share targeted toward our educational mission—in keeping with the Province’s mandated responsibility for education. Consequently, universities have been forced to find funding for renovations, utilities, financial administration and other indirect costs associated with research by tapping into dollars that have arguably been targeted towards teaching and learning.
Fortunately, this situation is changing for the better. Following extensive lobby efforts undertaken by the Association of Universities and Colleges of Canada, the federal government instituted a program to support the indirect costs of research in 2003. The program currently provides $260M annually to post-secondary institutions, and is distributed in accordance with the institutional three-year average share of total research funding from the three federal funding agencies: SSHRC, NSERC and CIHR. In accordance with the program guidelines this funding cannot be used to directly fund research. Rather, it is destined to cover indirect costs as described above.
At Western, the federal indirect costs program has resulted in an average annual transfer of approximately $8M. Of this amount, about $2M is transferred to our affiliated research institutes, which, like Western, bear the full costs of maintaining labs and other research facilities located on their premises. The precise amount of the transfer is based upon the proportion of Tri-Council funding the institutes attract, and also the degree to which the institutes depend on, or are independent of services and infrastructure provided to them by the University.
The funds retained by Western (approximately $6M annually) are used to support a number of projects and priority service areas across campus, each of which provides critical support to our research enterprise. For example, during 2004-05, about 50 per cent of the money was used to help fund a large number of renovation projects across campus. About 15 per cent was used to support research administration and accounting services, while 10 per cent was allocated to Western’s libraries. Support for utilities and information systems accounted for about 15 per cent. Finally, $750,000 is allocated each year to Western’s Research Infrastructure Support Fund. These monies are distributed on a pro rata basis to the Faculties based upon their average three-year contribution to total Tri-Council funding at Western, and are used to support infrastructure and research support needs identified locally. At the end of each year, Western is required to provide a full report detailing the use of the funds, which must be in compliance with the strict guidelines developed by the program.
The benefits of the program extend beyond immediate support for the indirect costs associated with the research enterprise at Western. With the operating funds released as a result of this new federal transfer, additional investments can be made in teaching and research at Western, through, for example, the University Priority Investment Fund initiative, or the recently announced increase in funding provided to the Academic Development Fund.