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ÀÏ°ÄÃÅ×ÊÁÏ's Current F&A Rates

What are F&A Costs?

F&A costs are defined in  as costs that are "incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity." F&A costs are sometimes referred to as indirect costs or overhead costs.

There are two categories of F&A costs: (1) Facilities costs and (2) Administrative costs.

Facilities costs support activities such as:

• Plant operation and maintenance: utilities, janitorial services, routine maintenance and repairs, etc.
• Depreciation or use allowance: for buildings and equipment, excluding buildings and equipment paid for by the federal government
• Library expenses: books, library staff, etc.

Administrative costs support activities such as:

• General administration and general expense: accounting, payroll, administrative offices, etc.
• Sponsored project administration
• Departmental administration expenses: administrative costs at the college and departmental levels
• Student administration and services

How are Facilities and Administrative Rates Determined?

The Facilities and Administrative Rate (F&A Rate) is the mechanism used to reimburse the University for the infrastructure support costs associated with sponsored research and other sponsored projects.

The University negotiates F&A rates with its cognizant agency-the Department of Health and Human Services (DHHS), Division of Cost Allocation (DCA), Mid Atlantic office. DHHS issues the University a . Rates approved on the F&A rate agreement are for use on grants, contracts and other agreements with the federal government. Rates are developed and negotiated approximately every four to six years. ÀÏ°ÄÃÅ×ÊÁÏ has developed an  for non-profits, private, state, industry, and commonly used sponsors. The appropriate F&A rate is assessed to each sponsored project.

There are times when a sponsor may limit the allowable F&A on a sponsor project through publishing the allowable rate in the solicitation or website. In these occasions, the sponsor limited F&A rate will be applied to the sponsored project. Should the principal investigator request an F&A rate lower than the University's negotiated or established rates then a  is required. In order to receive the reduced F&A rate, the College Dean, Associate Vice President for Research, and the ÀÏ°ÄÃÅ×ÊÁÏ Provost must approve the form. The Reduced F&A Rate Request form is not required if the sponsor has mandated a lower F&A rate in writing and published such requirement to all applicants.

Facilities and Administrative Rate Application

Reimbursement for F&A costs is accomplished through using F&A rates. F&A rates reflect the average of all F&A costs associated with sponsored research programs.

Modified Total Direct Cost (MTDC) consists of total direct costs less certain categories of exclusions (or modifiers) as defined in . According to , allowable indirect costs include expenditures for functions that provide a benefit to research and exclude expenditures that have no benefit to research or that are expressly unallowable for reimbursement purposes. Expenditures for modifiers that are charged to sponsored agreements are excluded from the calculation of the F&A rate and are not subject to the F&A rate.

Expenses excluded from F&A using the MTDC rate are:

• Equipment
• Capital expenditures
• Tuition remission
• Rental of space
• Scholarships and fellowships
• Subcontract portion in excess of $25,000

Costs Normally Treated as F&A Costs

The Uniform Guidance , which incorporates Cost Accounting Standards 48 CFR , , , establishes that administrative and clerical costs as well as other non-salary items such as office supplies, postage, local telephone costs, subscriptions, and memberships should normally be treated as indirect (F&A) costs. If a principal investigator believes that circumstances warrant certain indirect costs to be charged as direct costs to his/her project, then completion of the  is required.

Salary Costs: Administrative and Clerical Salaries

Exemptions to direct charge administrative and clerical salaries may be allowed only if all the following conditions are met:

1. Administrative or clerical services are integral to a project or activity
2. Individuals involved can be specifically identified with the project or activity
3. Such costs are included in the budget and justified in the budget narrative as integral to the project or prior written approval has been received by the sponsor's grantor or contract officer
4. The costs are not also recovered as indirect costs

Note: ÀÏ°ÄÃÅ×ÊÁÏ considers integral to mean: (1) circumstances exist where administrative and clerical services being provided are necessary for the performance of the project or activity being supported by the federal award and (2) a minimum of 20% FTE is budgeted in the award's budget year, or if less than 20% FTE, special circumstances are documented and approved by the sponsor.

Non-Salary Costs: 

The cost items listed below will be permitted to be directly charged to the project only when the items being requested can be clearly demonstrated as being essential and allocable for the performance of the project or activity being supported by the award. The following criteria will be used to determine whether or not an item is essential and allocable:

1. The need has been included in the original proposal and completely justified as to the reason it is being included in the project budget
2. It has been approved by the sponsor as part of the budget and award process
3. The item is necessary for the performance of the project
4. The purchase must represent good stewardship of the sponsor's funds and the project's stated objectives
5. The costs are reasonable and directly benefit the project

Examples of Non Salary Costs:

• Audio Visual Supplies
• Computer Supplies
• Computer Devices, Desktops, Laptops, iPads
• General Purpose Software (Not Specified/Technical)
• Local Telephone Service
• Memberships & Dues
• Cell Phones and Service Plans
• Postage Stamps
• Subscriptions to Publications
• Office Supplies
• Food & Beverages

Note: Computers and electronic devices are allowed to be direct charged if the items are essential and allocable to the performance of the award. See . **Generally, food and beverages are unallowable items to be direct charged. These costs must be specifically budgeted, justified, and necessary for the performance of the project.