Six percent indirect cost considered

Members of student government and some administrators say that a proposed 6 percent indirect cost to be charged to Portland State student groups next year is still too high.

“Indirect cost” is a state-mandated, across-the-board fee that assesses a charge from all self-supportive groups, including student groups, based on a percentage of a group’s budget. All self-supported parts of PSU, other than student groups and athletics, currently are charged 12 percent of their budget for indirect costs, and a similar 12 percent charge of each student group budget was originally proposed last fall.

But indirect cost committee Chair and Budget Analyst Susan Dodd spoke with the committee Wednesday about reducing that fee to 6 percent. Some of the committee members, including Dean of Students Wendy Endress, called the 6 percent reduction arbitrary. The charge could raise the $167 per-term student incidental fee by as much as $78 next year.

The deadline for the committee’s proposal to Lindsay Desrochers, Portland State’s vice president for finance and administration, is due Feb. 9. The committee, made up of students, faculty, staff and administrators, has not yet agreed on a specific fee percentage.

Endress proposed a lower fee that would gradually increase over time. She said she would like to keep the fee between 1 and 2 percent, a statement that was echoed by many committee members. Dodd said that from an accounting standpoint, 6 percent makes more sense, although she said she would consider a gradually rising fee.

Michael Burton, vice provost for extended studies, said that if it were up to him the fee would be lower than 6 percent. He said he would like to protest the Oregon University System’s mandate, but as a state employee, he is unable to.

“In the final hour we have to keep in mind [this fee] is because of the state’s inability to fund higher education,” Burton said.

The indirect cost could considerably raise the student fee or affect the budgets of all student groups, depending on what the Student Funds Committee decides. The only mandate OUS gave for the percentage requirement is that it not be zero percent. Courtney Morse said she wants to advocate for the lowest fee possible, 0.1 percent.

If a 6 percent fee on student groups is applied and each student group receives the total amount they requested for the 2007-2008 year, the student incremental fee could be $232 per term next year. In the next two weeks of budget deliberations, the Student Fee Committee will decide how to apply the fee to student groups.

Morse said she worries that Dodd’s power as chair will lead the group to accept the 6 percent fee, although if that decision were made, it would be a violation of the committee’s desires.

“We need to cooperate,” Morse said, adding that Endress has been a big help in advocating for the lowest cost to students and student groups. Morse said that if Dodd were to go forward without approval, “it would be a serious violation of the committee’s thoughts.”

Dodd said that if the committee were to decide on a low fee, like 1 or 2 percent with a gradual increase, she would support that decision and prepare the proposal to Desrochers, who has the final say.

Oregon State University currently charges student groups a 3 percent fee, according to Dodd. She said she has been trying to find out the percentages charged by each of the OUS schools to put PSU’s percentage in line with the other seven Oregon universities.

Dodd has not been able to find out University of Oregon’s indirect cost, after repeated attempts at contacting the U of O finance and budget departments. After repeated calls by the Vanguard to the University of Oregon finance, controller’s and student government offices, no parties questioned knew of any kind of indirect cost charged to student groups.

Portland State applies a 12 percent charge to most other self-supported areas on campus, but OUS changed its policy this year so that all universities must implement an indirect cost percentage to be delivered to OUS for review.

The policy reads: “It is OUS policy that auxiliary enterprise activities be self-supporting, generating sufficient operating revenues to cover operating expenses, including direct expenses and the allocable portion of indirect costs borne by other units of the university.”

The next committee meeting is to be held Wednesday, Jan. 31, at 8 a.m. in the Extended Studies Building.