Facilities Expenses
Facilities expenses are costs that have been incurred for buildings, fixed equipment, utilities, maintenance, and other expenses of a “bricks and mortar” type that cannot be easily related to any particular function. Examples include:
- Building Depreciation: The portion of the cost of MIT buildings and capital improvements to buildings and land that are used for research, excluding federally funded buildings.
- Equipment Depreciation: The portion of the cost of MIT equipment used for research, excluding equipment purchased with federal funds or on non-federal sponsored agreements. Equipment is depreciated by various useful lives according to the class of asset.
- Interest Expense: This pool includes the cost of interest on debt-financed research facilities that is paid to an external party.
- Facilities Operations and Maintenance: Expenses that have been incurred for the administration, supervision, operation, maintenance, preservation, and protection of the Institute’s facilities. Normal facilities costs include utility, maintenance, and custodial costs; ordinary repairs; care of grounds and buildings; radiation and chemical safety, including safety training and hazardous waste disposal; and operation of the Department of Facilities. Special plant costs include the cost of renovations to buildings and space changes.
- Library: Costs incurred for the operation of MIT Libraries, including the expense of collections and materials as well as administration.
- Carry-Forward Adjustment: MIT negotiates fixed F&A rates with the federal government that incorporate a carry-forward provision. The billing rate is prospective and based on a projection that is a combination of historical costs and anticipated future changes; for example, the impact of inflation, new construction, and government-approved changes to MIT cost accounting practices. After the close of the fiscal year, a detailed analysis is performed to calculate the actual F&A rate for the year. This actual rate is audited by the federal government and a negotiation establishes the final rate for the year. This final rate is compared to the negotiated billing rate to determine the amount of over- or under-recovery adjustment that must be made to a future negotiated billing rate.
Administration Expenses
Administration expenses are costs that have been incurred for the general executive and administrative offices of the Institute and other expenses of a general nature that do not relate solely to any major function. Examples include:
- General Administration and General Expenses including:
- The Office of the President; the Office of the Vice President for Research, the Office of the Vice President for Finance, and other vice president offices; the Office of the Provost; the Office of the General Counsel; and Human Resources
- IT systems, secure data storage, internet, telecommunications, and high-speed data processing
- Insurance
- Departmental Administration: Costs that have been incurred for administrative and supporting services in departments, interdepartmental laboratories, or centers and that provide a benefit to the research projects in these units. Included in this category are departmental heads and Institute Professors, academic deans and Dean's Office staff expenses, laboratory directors, and academic department support staff.
- Sponsored Projects Administration: Costs incurred by a separate organization established primarily to administer sponsored projects. At MIT, this pool includes Research Administration Services, Cost Analysis, a portion of the Technology Licensing Office, and costs of federal, state, and local regulatory compliance, including human and animal safety review boards.