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001879 I USGS Overhead Primer \ )Figures will be rounded to illustrate the principles, rather than woi-rying about specific mathematical accuracy) Backf!round In 2002 the USGS decided to adopt a full cost accounting/full cost recovery business model and to implement a set of common business practices across the entire bureau starting in FY 03. 1. An overhead workbook was developed that required certain expenses to be paid for out of assessment income. Each cost center had to use this workbook to calculate its overhead rate. The rate could vary depending upon actual costs at the center, but every center had to include the same set of items in its overhead calculations. (See Attachment No. 1 for an example ofthe costs that should be paid for by assessments.) 2. DOl agencies would be given a preferred customer rate of 15% by all USGS cost centers. This meant that BRD would have to start charging overhead to DOl agencies, something it had never done before. It also meant that the other three disciplines would have to lower their overhead charges to DOl agencies to 15%. Southwest Biological Science Center (SBSC) Rate on Reimbursable Funds = 35%. You will recall that GCMRC is the largest of the four field stations that comprise SBSe. DOl Preferred Customer rate = 15%. Of this collection, 10% currently goes to USGS Headquarters and 5% stays with SBSC. This proportion will change each year until 2008 when it reaches 7.5% for each party, where it will remain. For funds that are passed through to outside research partners rather than being spent within the USGS, a special pass-through overhead rate of 6% is authorized, and no cost share is required. Ofthis amount, 3% goes to USGS headquarters and 3% stays with SBSC. SBSC rate on USGS funds = 19%. This amount is charged against USGS appropriated funds by the cost center in order to pay required overhead costs that would otherwise have to be paid by direct charge against these funds (this is a product of the overhead policy [and workbook] that identifies certain costs as "overhead" expenses). Why Does USGS Charf!e Overhead on AMP Funds? rssistant Secretary for Water and Science Mark Schaefer issued a memo on March 31 , 2000 entitled ,Institutional Home for the Grand Canyon Monitoring and Research Center" in which he listed 12 policies and protocols that he wanted the USGS to follow in managing GCMRC. Policy No.8 reads "The USGS will not charge bureau-level assessments against the funding provided by the Bureau of 1