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9.7 Policy on Establishment and Review of Centers, Institutes, Clinics

Adopted Spring 2001

Purposes To effectively address specific societal needs in education, research or service, it is sometimes necessary to establish centers and institutes within the University to serve external constituencies. The University encourages the formation of organized research and public service units when such formal designation will address University priorities, enhance the University’s ability to fulfill its mission, and permit a more effective allocation of University resources. This policy indicates the process to ensure their orderly establishment and provides for a periodic review for their continuation.

A center, institute, clinic, or similar activity that generates revenue within one or more schools/college is created to implement instructional or training programs, clinical or community service, or research activities that cannot ordinarily be accommodated within existing departmental structures. This unit may require special funding for its work.

Typically, the special unit will include personnel from various departments and college/schools. In this document, reference to “center” refers to any of these special units, regardless of name/title.

Organized research and public service units offer a means for faculty, staff, and students to participate in interdisciplinary or other groups to address local, regional or national needs that are aligned to University mission and priorities, foster communication and interchange within the University community and between the University community and external groups, and provide leadership and focus to the University’s research and public service efforts in selected areas of recognized importance.

Entities called “centers” or “institutes” whose purpose is to provide service almost exclusively to the University campus community (such as the Education Resource Center, Center for Teaching Learning and Technology) shall not be considered centers or institutes for the purposes of this policy.

Establishment In order to recommend establishment of a center or institute, the participating or sponsoring units will prepare an operating plan. The plan must identify funding for all operations.

The establishment of a center or institute requires the review and approval of the appropriate department chairs, dean(s) and (if the proposal involves graduate programs) the Dean of Research and Graduate Studies. For externally funded centers, a plan for the establishment of a center will be developed as required by the sponsoring agency, in conformance to University policies. If appropriate, the Academic Affairs Committee or the Graduate Studies Committee will review and submit a recommendation. It may then be recommended to the Provost, who will make a recommendation to the President. Normally, the decision to approve or disapprove the creation of a proposed unit will be made by the President upon the recommendation of the Provost and the Vice President of Finance and of others with whom the President may wish to consult. Approval by the Board of Regents may be required.

A request for the establishment of a center or institute will be in the form of a prospectus that addresses the following items:

  1. A statement specifying the name of the unit, the purpose, and the particular objectives to be accomplished.
  2. A statement of need and the constituencies that are to be served.
  3. A description of the manner in which the center or institute will effectively meet this need in a way that existing units cannot, including representative activities and any anticipated effects of the proposed unit on existing instructional programs.
  4. The unique value of the program to the University and its relevance to the mission of the University.
  5. Identification of personnel and departments to be involved initially and a projection for such involvement over a five-year period, including any proposed advisory boards.
  6. Estimated fiscal resources required and sources of funding for a five-year period.
  7. Space and equipment needs and a description of how they will be met.
  8. Description of administrative operation and oversight for the center or institute.

Governance An operating unit should report to the lowest organizational level which can make those decisions required for the on-going activities of the unit. Where center or institute activities are conducted entirely within one department, the director could report to a department chair. Where all center or institute activities exist within a single school/college, the dean of that unit will be the responsible individual, and where more than one school/college is involved, the deans of those units will be jointly responsible. Where more than one college is involved, the responsibility for final decisions of dispute related to research or post-graduate activities is the Dean of Research and Graduate Studies with the advice and counsel of the deans of the involved colleges. In all other cases, disputes will be decided by the Provost with the advice and counsel of the deans of the involved colleges.

Budget Policies Allocation of revenue will be determined prior to the start of a new center. Direct and indirect costs will be calculated for each center, based on requirements. Direct costs include all salaries, fringes, operations, equipment, and expansion space. Indirect costs include reallocated space use, utilities, administrative support, etc. Direct costs will be formulated by the dean and leaders of the proposed center, to be reviewed by the Academic Budget Officer and a representative of the Finance Center and approved by the Provost. Indirect costs will be calculated by the Finance Center, reviewed by the Academic Budget Officer and the Dean and Directors of the proposed center, and approved by the Finance Center.

Centers in the School of Dentistry and Law will be budgeted according to existing University policies on administrative overhead and indirect income.

Any gift assessment for the University Advancement Office will be applied to gifts designated for a center prior to the allocation of the gift funds to the center's budget. Gifts so assessed, and endowment earnings from such gifts, will not be calculated as net revenue for indirect cost charges, described below.

Normally, 100% of net revenues (direct revenue less direct and indirect costs) are allocated to the center during the first year of operation.

For grants- and contracts-funded centers, University policies on grants and contracts apply, except that for the first year, 80% of the indirect cost recovery is returned to the center or the sponsoring academic unit(s) (20% will be divided proportionately between the general University fund and the Office of Sponsored Programs). Special arrangements may be established for these centers to meet requirements of federal, state, or local government sponsoring agents.

The specific revenue allocation formula for each center may be determined by such factors as sources of funding, magnitude of activities, calculated risks and required investments. Normally, however, beginning the second year, 40% of net revenues are allocated to the center and its sponsoring academic units. The deans of the sponsoring academic units, in consultation with the Provost, will determine the allocations among the center and the sponsoring units. Of the balance of net revenues, 10% is assigned to build an Academic Contingency Fund and 50% is allocated to the general fund of the University to cover University indirect costs. Academic unit(s) will cover cumulative losses of a center starting at the end of the second fiscal year of operation. An option is to use the academic unit's net revenues from other centers to offset the losses.

If net revenues exceed $25,000 annually, 50% of net revenues are allocated to the center and its sponsoring academic units, 10% to the Academic Contingency Fund, and 40% to the University general fund. If net revenues exceed $50,000 annually, 75% of net revenues are allocated to the center and its sponsoring academic units, 5% to the Academic Contingency Fund, and 20% to the University general fund. If net revenue exceeds $100,000 annually, the net revenue formula may be renegotiated.

Evaluation Centers and institutes are temporary in nature and reviewed at least every six years to determine viability and need for continuation. The evaluation will consider costs and quality of performance in relation to stated objectives, as well as benefits to the University and its clienteles in light of the University’s priorities and resources. A decision as to the continuation, elimination, or alteration of the unit in question will be made by the President upon completion of the evaluation. Currently existing research and public service units are to be evaluated in accordance with these procedures and in a sequence to be determined by the Provost’s Office.