Facilities & Administrative (F&A) Rates
The University categorizes all F&A costs as facilities or administrative based on the nature of the costs. Costs for building depreciation, equipment depreciation, libraries, and operations and maintenance are categorized as facilities; while costs for general, departmental, and sponsored project administrations are categorized as administrative. In other words, the F&A cost component of a sponsored project is intended to reimburse the University for the costs it incurs to support research. F&A costs represent a reimbursement for expenses already incurred; therefore, all F&A costs recovered are deposited as general income. General income funds become part of the pool from which the general fund budget is developed for the entire University.
Some of the institutional resources that are included in the F&A rate are:
- laboratory space
- office space
- specialized facilities
- telecommunications infrastructure
- college research offices
- sponsored programs
- research accounting
- human resources
- legal counsel
- affirmative action monitoring
- animal & human subjects protection
- health & safety
- building maintenance
- office supplies
- departmental administrative assistants
- deans, department chairs, etc.
The portion of costs attributable to the research enterprise is calculated and is converted to an F&A rate for the campus.
Unfortunately, even when the current F&A rate is applied, the costs of graduate student tuition remission, a portion of subcontract amounts, and equipment are subtracted from the total direct costs to establish a modified total direct cost (MTDC) base for the project. The F&A rate is then multiplied by the MTDC base for the project, and the resulting F&A costs are added to the direct costs to obtain the total cost for the project. When a non-standard F&A rate is allowed, there are usually no deductions, the percent is applied to all direct costs. This is known as the total direct costs (TDC) base.
The facilities and administrative (F&A) rates that can be charged to federally sponsored projects are compiled and presented to the U.S. Office of Naval Research (ONR) in a proposal submitted by the University and audited by the Defense Contractor Audit Agency (DCAA). The F&A rate is usually reviewed and updated annually by the ONR.