The first task facing the administrator of an ERC is an analysis of the environment in which the center, and hence the AD, will function. Every aspect of center management will be enhanced by a thorough understanding of your "baseline" environment.

Make time to take stock of available resources and local circumstances. Failure to do so puts you in a reactive position. Effective strategies will differ based on size; public vs. private support; technical and industrial research areas; the current level of commitment from your home institution and opportunities to improve it; the requirements of collaborating organizations; the diversity of your student and faculty population; the age of your center; etc. The following information is designed to assist the AD in analyzing factors that shape the center's environment.

Tip : There may never be a better opportunity to negotiate favorable agreements than at the start-up of a new center. Always execute formal, written agreements; make sure that commitments of support are properly authorized.

6.2.1 Structure and Organization

There is no ideal organizational scheme for an ERC; every center will be (and should be) unique. Indeed, the creativity your ERC team brings to the development of the center is apt to serve as a model for future developments within your home institution. There are, however, two things you can count on: change, and the need to be flexible. Be sure to consider the following questions as you organize your infrastructure:

Within your university, where is your center in the organization chart? Will your Director report to an engineering department chair, dean, or some other university official? Will the center be a financially autonomous unit with independent bookkeeping? Will you be directly responsible for the financial management of the ERC? If not, who will? Your internal planning will be heavily influenced by this internal structure. To the extent that your university financial management system allows, spend time and thought in developing the ‘chart of accounts' for your center. The ‘chart of accounts' structure should become an essential tool for facilitating financial reporting. (See Section 6.4.5)

Is your center is a part of a consortium? If so, one institution will be the lead on the award. How will the others interact and share in and contribute to ERC operations and resources? Failure to clarify and formalize these arrangements early on has led to serious problems at some centers.

How is your university organized for sponsored research? Does it have separate "pre-award" and "post-award" units? Does it include sponsored program accounting and training for university accounting (e.g., OMB Circular A-21, A-110, Cost Accounting Standards, university policies and procedures)? You need to understand your institution's research management hierarchy and how it functions. NSF now requires an authorized university official to certify the center's statements of industrial membership and support and cost sharing contributions.

Do you have a copy of NSF's Cooperative Agreement? If not, obtain it, read it, and keep it on file, as it is the governing instrument for your award. Make yourself an expert on the nuances of your Cooperative Agreement; find out how it differs from normal grants and contracts. Keep a file of annual modifications made to the Cooperative Agreement. Expect to coach/train your grant administrator regarding the nature of an ERC. Often they will try to deal with your center as if your award is a normal federal grant or contract and that would be very inappropriate.

6.2.2 Fiscal Year Differences

Most centers find it necessary to deal with multiple fiscal and reporting years. Member companies will require unique fiscal periods, and the award years from NSF probably will not match your university fiscal period. These differences will have a profound impact on reporting requirements, staffing plans, and management of budgets, revenues, and expenses. Make sure that your university's financial system has the flexibility to generate reports no matter what the fiscal period—if not, you may need to develop a shadow system that will have the necessary flexibility.

Tip : Evaluate your fixed reporting and budgeting schedule before planning a master calendar for your center. Staff key operations accordingly.

6.2.3 Life Cycle Changes Over Time

It helps to proactively anticipate major transition periods. Key events shaping the ERC often include meetings with industry; major external reviews (i.e., NSF annual reviews and renewal reviews in Years 3 and 6); building a new facility; any major remodeling activities and/or physical moves undertaken; and the eventual phase-down of NSF support in the later years of the award. Other significant events will happen, often without warning. Any such changes--the naming of a new ERC Director; changes in participating faculty or key program staff; change among top university VIPs; assignment of a new NSF-ERC Program Director; or significant shifts in funding and staff--will alter strategic plans for the ERC in unexpected ways.

Centers are vulnerable to any significant change affecting universities, government, or industry. Of special concern will be economic and business factors affecting your member industries. As the ERC develops management plans, try to remember that it is natural to have cycles of growth and decline within center programs. Expect change; use the (inevitable) disruptions as an opportunity to improve!

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