Dear "Sleepless"
I operate a single facility that includes protein and DNA techniques. We
have several major instruments and our yearly operating budget is moderate
(less than $500,000). We charge fees for all of our services and we routinely
maintain a positive balance in the laboratory account with an average balance
around 15% of our yearly budget. We have used this account to purchase capital
equipment (a new DNA synthesizer, for example). I cannot imagine operating a
core lab budget that would require me to maintain a zero-sum budget at the end
of each year.
The excess income over expenses must be built into the budget to assure
that the laboratory has the ability to cope with unexpected instrument
failures or repairs that may not be covered by maintenance contracts. One must
also have sufficient flexibility in the budget to cover unexpected costs of
mistakes or errors that cannot be charged back to the investigator. In peptide
synthesis, for example, an undetected instrument failure that ruins a long
peptide synthesis can result in a useless product or no product at all. But
the reagents have been used and hundreds of dollars will have been lost to
produce a product for which you cannot collect your fees. We cannot expect the
investigator to pay twice the price of the synthesis because our instrument
failed or because of a technician error. So, our service prices are set to
cover a reasonable expectation of such additional expenses that are simply
part of running a laboratory of this type. Everyone pays a small percentage
more because of unavoidable failures. Without a mechanism to absorb the costs
of such additional expenses we would have no choice but to charge the
unfortunate investigator for the failed synthesis as well as the repeat
synthesis, assuming he/she would still be ordering from us!
Of course the trick is to set your prices at the correct level.
Accumulation of too much excess income is not justified. But, those in charge
should understand that there are few academic core laboratories that are able
to operate solely from service income without other support from the
institution or from grants. In truth, if you receive outside support for the
lab, you are already operating at a deficit. The Keck facility at Yale is one
of that few that I know about that is able to recover 1005 of its operating
costs from its fees. Most academic core labs receive a significant amount of
support from other sources. In my case, I receive about 33% of my laboratory
budget in the form of technician salaries from a center grant. This allows me
to set prices at a level that is affordable by our investigators and not so
high that they are unable or unwilling to use the facility. It also allows me
to charge even less to members of the center grant.
If a lab is fortunate enough to not need the excess income for unexpected
expenses in a given year then I believe it is perfectly justifiable, indeed
essential, to be allowed to use those funds for enhancement of the laboratory
or to carry the balance forward to the following year. If accumulated balances
increase too rapidly then that is a signal to lower prices.
It is critical to be able to continually maintain your facility and even
to improve its services. All investigators benefit from this approach and none
should feel cheated because they paid a little more than the baseline cost of
the reagents used to perform their particular service. While there are grant
mechanisms for the acquisition of major instruments (>$100,000) there are very
few mechanisms by which an academic lab can obtain funding to buy smaller
equipment such as replacement computers, centrifuges, vacuum pumps, pH meters,
etc. The excess fees can provide modest support for such needs.
Good luck trying to convince the administrators that your service prices
should be more than just the cost of your reagents.
ml
Ombudsman account for AECOM wrote:
> A question about funding a facility.
>
> What if you ran a core facility. Your mission statement is to provide
> cutting edge molecular biology services etc. It also states that the
> facility should run in chargeback mode and the objective would be to have
> zero dollars left at the end of the fiscal year. This is probably a good
> description of a majority of ABRF facilities. Now, what if because of
> unanticipated cost savings, whether by protocol changes, dropping of
> service contracts etc., there has been a net
> accrual of funds at the end of the year. Money that has been taken in from
> researchers to purchase supplies and maintain the facility in cutting edge
> condition is at least temporarily in a positive cash flow. A business
> would have no problem with this situation. The company would use the
> excess cash to enhance and modernize itself. (I won't even comment on
> bonuses). But to a core facility this can be perceived as a problem. From
> talking to other core directors that found themselves in this situation
> I've heard several results. One director had to divide all the excess
> money and cut checks for all the researchers. I've heard of others who
> have found ways to use the excess to modernize their facility (I just
> can't find any at the moment). And herein lies the question. If you have
> found yourself in this situation and your institute
> allowed you to purchase enhancements to your facility (capital equipment),
> could you post the justifications that you used? My institute accounting
> is unsure of the idea of accrued funds in a facility being used for
> equipment
> purchases. If I was able to show them examples of other facilities that
> found ways to do this without raising the ire of either the Institute or
> NIH bean counters I can undo a logjam of uncertainty.
> Why ombudsman? I don't want "no" for an answer.
>
> Thank you,
> Successful but Sleepless
-- Mark O. Lively, Ph.D. Professor of Biochemistry Wake Forest University School of Medicine Medical Center Blvd. Winston-Salem, North Carolina 27157 Voice: 336-716-2969 Fax: 336-716-7200 email: mlively@wfubmc.edu
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