10/17/2011: (revised) Two weeks ago we wrote how Duck athletics pays just half what other UO units pay towards UO’s administrative costs. How did this happen? In late 2007 a UO task force chaired by AVP Laura Hubbard recommended all “Auxiliary” units (a term which is explicitly defined to include athletics) pay according to this schedule: (Full report here.)
This policy was announced and posted on the BAO website. Then suddenly the numbers got changed. They added two new categories, one for incidental fees students pay to fund the EMU, etc. The new policy is here, and the chart below from it makes it explicit the students will pay the 7% rate as other auxiliaries.
The other new category is Athletics. They get a permanent 3% rate. This one special subsidy for athletics costs the rest of UO about $3.2 million a year. For comparison, the recent faculty raises cost $2.8 million.
.170 GUIDELINES FOR DEVELOPING INDIRECT COSTS ALLOCATION METHODS
Allocation of indirect costs should be based on a process that is reasonable relative to the activity and the related costs. OUS institutions will each develop their own methodologies for allocating indirect costs within the guiding principles listed below:
- Reasonable – costs which are applicable to the overall operation of the activity
- Properly allocable – costs are allocated in accordance with the relative benefits received by the auxiliary enterprise
- Simple and easy to understand
- Auditable – recalcuable based on documented principles and procedures
- Objective – Based on relevant and reliable financial and other information …