Facilities and Administrative Rates
Facilities and Administrative Costs (F&A) or indirect costs are charged to all sponsored programs (grants and contracts) under the requirements of the U.S. Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions, and consistent with the University’s federally-negotiated F&A Cost Rate with the Department of Health and Human Services, the University’s cognizant agency. Recovered F&A costs reimburse the University for actual costs associated with performing research that are not specifically allocable to any single sponsored project. Such costs include utilities, buildings and facilities costs, information technology infrastructure, department and central administrative costs associated with managing externally funded projects and libraries.
Sponsors have an expectation that F&A costs applied to sponsored programs will not normally exceed the federally-negotiated rate, and that the rates applied to a federally-sponsored program represents the best value for the federal government.
Current F&A Rate
View the University’s F&A Cost Rate Agreement.
Effective July 1, 2012, the University implemented a new rate agreement. F&A Costs will be budgeted and expended using a rate of 40% of Total Direct Costs (TDC), excluding capital expenditures and subaward amounts in excess of $25,000.
The University’s negotiated F&A cost base INCLUDES the following budget categories:
- Salaries and wages, including fringe benefits
- Materials and supplies
- Rental costs of off-site facilities
- Scholarships and fellowships
- Tuition remission
- Subawards, service agreements and consulting agreements up to $25,000 each
The University’s negotiated F&A cost base EXCLUDES the following budget categories:
- Capital expenditures, including equipment having a unit cost of $5,000 or greater
- The portion of any single subaward which exceeds $25,000
Description of F&A Costs for Proposals in Preparation
To accurately describe the F&A base used in all proposals in preparation, investigators are encouraged to utilize the following description:
“Facilities and Administrative (F&A or indirect) costs are calculated in accordance with Georgia Southern University’s federally-negotiated F&A rate agreement (Department of Health and Human Services, effective 7/1/2012), which is currently 40% of total direct costs excluding only capital expenditures and the amount of subawards in excess of $25,000. Georgia Southern University’s threshold for capital expenditures and capital equipment is $5,000.”
Application of F&A Costs
The University will seek full recovery of F&A costs regardless of the sponsor (federal, state and nonprofit). All project budgets should include F&A costs as determined by the University’s federally negotiated rate.
Use of On- and Off-campus Rates
The use of the on- or off-campus F&A rate is determined as follows:
- If 51% or more of proposed salaries for University personnel represents compensation for on-campus effort, the on-campus rate of 40% will apply.
- If the project will be performed in facilities not owned by the University, AND if rent is directly allocated to the project, AND if 51% or more of proposed salaries for University personnel represents compensation for off-campus effort, the off-campus rate of 15% will apply.
The inclusion of a subcontract or consulting agreement in a budget has no bearing on the applicable rate. The applicable on- or off-campus rate is related solely to the compensation to be paid to University employees.
Variations and Exemptions
Despite the acceptance of a federally-negotiated F&A rate between the University and its cognizant agency, the F&A rate applied to a sponsored program may deviate based upon the sponsor’s written policies or the institution’s acceptance of an alternate rate as mandated by a sponsor. For example, some federal sponsors may place a cap on the rate that may be charged to all of its awards or certain types of awards. The University attempts to obtain full recovery of F&A costs on all sponsored programs, except where specific written policies of the sponsor preclude doing so. When a sponsor’s formal written and documented policy stipulates a lower F&A rate, the University will abide by the restriction. However, requests for reduction or waiver of the federal F&A rate or a non-federal sponsor’s stated rate must be approved by the Vice President for Research and Economic Development (VPRED).
Last updated: 7/8/2016