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Fiscal 2009/2010 Overhead Recovery Fee

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Published: 21 Aug 2009

Please click here for FAQs:
http://www.mcgill.ca/files/financialservices/FAQs_Overhead_Recovery_Fee.pdf

Date: August 11, 2009

To: Fund Financial Managers of Unrestricted Funds

From: Jeffrey Ives, Director, Office of the Budget
Cris Tinmouth, Controller, Financial Services

Subject: Fiscal 2009/2010 Overhead Recovery Fee

Further to the memo sent by the Provost to all Deans on April 24, 2009, and by the Principal to all Vice-Principals on May 5, 2009, in order to achieve the Fiscal 2009/10 operating budget deficit tabled and to create a fund for special priority and performance driven projects, an overhead recovery fee of 1.5% will be charged on actual revenues earned in non-1A unrestricted funds on a quarterly basis going forward.  The proposed process for collection of this fee is outlined below.

In the month following the end of a fiscal quarter, revenues earned in non-1A unrestricted, non research- related funds (i.e. fund types 1B, 1C, 1D and 1E) during that respective fiscal quarter will be subject to a charge of 1.5%. The resultant amount will be posted to a new account code, 700694 – Central OH Unrestricted Funds, with the offset being recorded in a Priorities Pool, to assist with the funding of projects deemed to be priorities for the University. Separate Faculty and Administration Priority Pools have been established for special priority and performance driven projects.

For example, here’s the revenue and overhead calculation for ‘Special Purpose Fund XYZ’ (fund type 1C):

Fiscal Quarter: Q1: June 1 – Aug 31, 2009
Revenue Recorded: $10,000
Overhead charge: $150
Month of charge: Sept 2009
Fiscal Quarter: Q2: Sept 1 – Nov 30, 2009
Revenue Recorded: $5,000
Overhead charge: $75
Month of charge: Dec 2009
Fiscal Quarter: Q3: Dec 1, 2009 – Feb 28, 2010
Revenue Recorded: $15,000
Overhead charge: $225
Month of charge: March 2010
Fiscal Quarter: Q4: Mar 1 – May 31, 2010
Revenue Recorded: $1,000
Overhead charge: $15
Month of charge: May 31, 2010

Please note that unrestricted start-up grants and service agreements will be excluded from this charge.  The Fund Financial Manager will be responsible for ensuring accurate recording of revenue generating activities in the appropriate fund type.

Should you have any questions concerning this overhead recovery fee, please contact Jeff Ives, Director, Office of the Budget (ext. 2851) or Cris Tinmouth, Controller (ext. 2310)

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