Hello to all,

As we begin the new fiscal year I would like to take this opportunity to review some of the Foundation’s important accomplishments during fiscal year 2015 and discuss new opportunities and a few challenges we will face in the coming year. We continue to work very hard to provide great service to the Research community, and actively seek your feedback in improving our quality of service. Following are a few of the key accomplishments from FY 2015:

• SYSTEM IMPLEMENTATION – In September the Research Foundation went live on its new core software system. This new system fully integrates general ledger, human resources, grants administration, purchasing and financial reporting and is allowing us the opportunity to further automate our internal processes. It is always a significant challenge to replace a legacy computer system, especially when it the essential core of everything we do, but we successfully completed the transition, while continuing to accommodate researchers and staff. We are live on the new system and expect further improvements to come as we continue to refine our ability to leverage its capabilities and enhanced reporting options.

• OUTREACH ACTIVITIES – Also in September the Foundation hosted an Information Session and Open Forum where we provided an update on the new system and related enhancements. In April we hosted a session in conjunction with the Defense Security Service focused upon increasing security awareness and reducing insider threats and adverse information. Both sessions were held on campus at Webb Center and not only provided an excellent opportunity for Research Foundation staff to have face-to-face interaction with faculty but also allowed for direct feedback from the research community.

• INTELLECTUAL PROPERTY – In November the Foundation successfully closed the most significant licensing agreement in its history. This work was the culmination of efforts two years in the making and includes the licensing of 21 technologies from the University’s Center for Bioelectrics. This agreement was a collaborative effort with Eastern Virginia Medical School as it includes some jointly held patents. In connection with the license agreement the Foundation also executed a sponsored research agreement that will provide $1million to further research on some of these technologies and bring them closer to commercialization.

• FACILITIES AND AMINISTRATIVE RATE AGREEMENT (F&A) – In March we successfully negotiated new facilities and administrative (F&A) rates (also known as Indirect Cost or IDC) that will be in effect for the next three fiscal years (2016-2018). The new On-Campus rate for Organized Research of 55% is a 2% increase over the previously approved rate. We were successful at keeping the FY15 rate at the provisional 53% so as to not negatively impact any existing projects. The increase in rate is reflective of the University’s continued commitment and investment in research infrastructure.

• GSA SCHEDULES – In June the Foundation was awarded its first ever General Services Administration (GSA) Schedule Contract. This award is in the Professional Engineering Services (PES) of the Federal Supply Service Schedules. The service category includes Strategic Planning for Technology Programs / Activities, Concept Development and Requirements Analysis, System Design / Engineering and Integration and Test and Evaluation. The award covers indefinite quantities and/or services and will not require performance or delivery until specific orders are received. It is anticipated that the Virginia Modeling and Simulation Center will be a primary user of this contract, however it is available to other engineering departments within the University.

All in all, 2015 ended as a strong year and fiscal year 2016 is starting off on an even higher footing. First, I have good news with respect to our staffing. In June, I was able to re-direct funds to provide an additional Grant and Contract Administrator to the post-award team without increasing operating cost. The

additional position will assist in the redistribution of GCA workloads to evenly distribute the project demand and enhance service levels to faculty. We were most fortunate to fill this position with Bridgett Burman who had previously been at the Research Foundation for a period of three years. Bridgett has quickly re-engaged with our processes and will soon be handling a project workload within the College of Engineering.

Later in July we will be welcoming Shelly Shaff to our post-award team. Shelly comes to us from Cornell University. She has been with Cornell since July, 2001 completing almost 13 years, with close to 10 of those years in post award. In Shelly’s current position as a Finance Reporting Specialist in the Department of Food Science she is responsible for proposal preparation and submission, account set up, budgets and various financial activities in post award. Prior to her experience at Cornell she served in several accounting/bookkeeper roles.

Finally in August, after an exhaustive search we are proud to announce that we will have successfully filled the long vacant position of Director of Sponsored Programs when Richard Steinhart joins our team. The Director of Sponsored Programs position provides oversight and leadership to the pre-award, post award, and close-out functions as well as being the subject matter expert on grant and contract regulations and compliance. Richard has over twenty years of experience in Research Administration encompassing grants/contracts, budgeting/finance, operations business process development/improvement and customer service. Since 2007 he has held the position of Administrative Officer in the Department of Medicine, Division of Allergy, Pulmonary, Critical Care Medicine and Center for Lung Research at the Vanderbilt University Medical Center in Nashville, Tennessee.

Maintaining a high level of service is never without challenge, and FY 2016 will have its share, especially in view of a decline in indirect cost recovery due to an increasing number of awards with reduced recovery rates. While the fiscal year 2016 operating budget is currently undergoing review by the Research Foundation’s board of trustees, we have proposed a budget with no operational increase over the amount approved for fiscal year 2015. We remain committed to improving efficiency and have proposed reductions in areas that will not negatively impact our ability to deliver the best possible services to the research faculty.

Towards the end of improving the quality of the services we provide to the research community we have been working to identify our strengths and weaknesses as well as the opportunities and challenges that we face as an organization. Among the many steps we have taken as a result of this review, we are taking specific steps to improve internal communication, and strengthen accountability. As a consequence of a fast-changing regulatory compliance environment, and greater demand for cost control due to the aforementioned decline in indirect cost revenues, we are pursuing opportunities to leverage our process and execution to enhance the benefits that the research foundation affords the university:

• Contractual flexibility – separate incorporation and management allowing for prompt negotiation of contracts and the ability to accept terms and conditions normally prohibited for state agencies • Expedited procurement – through a purchasing policy that is more flexible than state guidelines allowing for prompt acquisition of research supplies and equipment • Audit responsibility – providing a separate A-133 compliance audit completed within 90 days of year end • The ability to hold funds for the benefit of the University – maintain Dean, department and faculty discretionary funds that carry-over from year-to-year • Responsive Accounting support – providing the ability to process travel advances, settlements and reimbursements within 24 hours • Responsive project set-up and management – providing the ability to establish a project account and authorize spending quickly upon receipt of award document

• Human Resources – the ability to hire, promote and retain talented staff for research projects, labs / centers and to facilitate benefit administration, compliance and payroll processing • A highly responsive team for proposal submissions – with a well trained staff familiar with agency requirements • A Post award team of professionals that help assure compliance with award conditions • Superior administrative support – easing the burden on researchers • Functional independence – and able to take actions that state agencies guidelines would not otherwise permit in order to benefit faculty research activities

As we move into fiscal year 2016, the Research Foundation will remain committed to making significant enhancements to the services we provide the research community while keeping and improving our responsiveness to the needs of the faculty.

With regards, Julian

Julian F. Facenda Executive Director