NCAA

OVERHEAD RECOMMENDATION

Introduction. At its January 7, 2001, meeting, the Executive Committee Budget Committee directed staff to ensure that all future budget requests, including fiscal year 2001-02 budget requests, included the full cost of new programs or program expansions. The committee expressed concern that prior budget requests had excluded staffing, operations, travel and capital costs that are necessary to support the new program or program expansion. The Budget Committee directed the staff to review various options for full costing of requests and report back to the committee.

Recommendation. It is recommended that three levels of overhead rates be applied to the direct costs of all future budget requests. A 10 percent overhead rate is recommended to be applied to requests where no direct staff requirements are needed and that a 25 percent overhead rate be applied to any new program request where direct staff is required. For budget requests where the funds are merely passed through the Association, no overhead will be charged.

The recommended overhead percentages were derived by comparing the Association’s general and administrative costs and program support costs, to the total program costs. Revenues derived from the overhead rate would be allocated by the president to hire staff necessary to implement new initiatives, build-out office space, purchase computers and equipment necessary to support staff expansion, travel and provide other indirect services such as insurance, finance, technology, etc.

For example, in 2001-02, if $800,000 ($800,000 * 10 percent = $80,000) of program expansion and $200,000 ($200,000 * 25 percent = $50,000) of new programming were approved by the Executive Committee, the president would have an allocation of $130,000 to fund the support costs necessary to implement the new initiative.

Implementation. Divisions will maintain a line item within their annual budget that identifies support and the overhead dollars. The national office will charge the account quarterly for the cost of services.

Action. Approve staffing and indirect overhead rates of zero, 10 and 25 percent to be applied to future budget requests.