Carnegie Mellon University
April 19, 2023

Cost Analysis Department Spotlight

What are the key functions and services of Cost Analysis?

Carnegie Mellon is a major research institution (R1) for which Cost Analysis plays an integral role.  Cost Analysis oversees the university’s facilities and administrative (F&A) rates and fringe benefit rates.  Cost Analysis directs all interactions with our cognizant agency, the Office of Naval Research.  This includes general communications, negotiations and audit coordination as well as oversight of compliance and opportunities to consider regulations and associated education for campus.

Sponsored projects audits are managed by Cost Analysis who serves as the liaison between various auditing agencies and campus. Consistent collaboration with our campus partners regarding federal regulations and university policies translates to audits results which highlight the university’s financial and research integrity. Additionally, Cost Analysis manages the establishment and audit review of university recharge centers. 

What are some ways that Cost Analysis contributes to Carnegie Mellon’s success? 

Indirect costs are expenses associated with operating Carnegie Mellon’s esteemed research enterprise which support but are not directly related to the research itself, such as administrative costs, facilities expenses, and equipment maintenance.  These costs can be substantial, and the university relies on indirect cost recovery to recoup funding to help cover a portion of these costs.  Working within the federal regulatory constraints, Cost Analysis evaluates costing structures and uses data analytics to inform leadership of varied cost impacts.  Working closely with leadership, we make informed decisions to ensure Carnegie Mellon recovers the allowable reimbursement for indirect costs.

This supports future expansion and growth of Carnegie Mellon’s research infrastructure in line with strategic goals.

Cost Analysis also maintains and updates the university’s disclosure statement, formally documenting all financial processes.  This process involves collaborating with various stakeholders across campus to establish proper documentation of cost accounting processes.

How does Cost Analysis support the Finance Division’s mission “To provide strategic, predictive, data-informed financial service and guidance to address challenges, explore opportunities, and ensure the university's financial sustainability?” 

Cost Analysis works with many departments analyzing information and data used in decision making. Our campus partners provide valuable information by way of completing the biennial space survey, maintaining accurate and timely financial data for sponsored awards, and collaborating on data for informed decision making.  Cost Analysis also collaborates with the Software Engineering Institute (SEI), CMU’s FFRDC on policy decisions and audits, and with the Advanced Robotics for Manufacturing (ARM) Institute providing guidance and ensuring compliance as its activity is consolidated into the Carnegie Mellon financial statements.

How does Cost Analysis interact, collaborate, and engage with other departments across campus?

To safeguard CMU’s federal sponsored research funding, Cost Analysis works with campus to ensure compliance with federal regulations.   We interpret and apply the Uniform Guidance cost principles to specific circumstances, for example when planning new research construction. Our sponsorship of up-to-date policies and procedures assists the research community in understanding the ever-changing federal regulations.  We also coordinate training for campus partners whether initiated internally or through ad hoc requests from campus departments.

Our recharge center responsibilities provide open collaboration between our office and the various recharge centers.  These activities include calculation development and rate approval.  Often we assist recharge service center personnel with policy or procedural matters related to accounting operations.

What is one thing you wish people knew about Cost Analysis that they may not know?

Cost Analysis is the liaison between the external audit community and the CMU community.  We directly respond to most audit questions and complete the majority of requests for information without the need to request information from campus.  We seek to reduce the audit burden on our campus partners as much as possible in order to allow our researchers and research administration community the ability to remain focused on their day to day operations without disruption.  

Which Finance Division values does Cost Analysis most exemplify and how?

  • Unwavering integrity: We provide supporting evidence of Carnegie Mellon’s stewardship of federal funding to external stakeholders demonstrating the university’s commitment to excellence in compliance with federal regulations.
  • Strength in Execution: We take on projects that establish and maintain critical documentation of financial policies and procedures that strengthen Carnegie Mellon’s transparency and accountability.

What is Cost Analysis most proud of accomplishing in the last few years?

We’ve worked collaboratively with the Office of Naval Research and Defense Contracting Audit Agency to ensure concise audit completion and timely negotiation of our fringe benefit and F&A rates.  This has allowed rates to be available at the start of the fiscal year, allowing researchers the accurate reflection of their current expenses and eliminating the need for adjusting accounting entries.