4.4 Facilities & Administrative Costs

(Previously labeled Indirect or Overhead Costs)

Revised 3/4/03

It is the policy of the University to collect full F&A on all sponsored projects.  Facilities & Administrative (F&A) costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, instructional activity, or any other specific institutional project. At educational institutions, such costs normally are classified under the following indirect cost categories: depreciation and use allowances, general administration and general expenses, sponsored projects administration expenses, operation and maintenance expenses, library expenses, departmental administration expenses, and student administration and services.

The rate(s), expressed as a percentage of a base amount, Modified Total Direct Costs (MTDC), established by negotiation with the cognizant federal agency on the basis of the institution's projected costs and distributed as prescribed in OMB Circular A-21.

The approved rate is applied to the total direct costs except for:

• Stipends (also includes fellowships or scholarships)
• Tuition
• Participant Support (NSF only)
• Subawards/Subcontracts (on the amount over the first $25,000)
• Patient Care
• Capital Equipment

4.4.1 F&A Cost Calculation

To determine F&A costs, calculate the sum of all budgeted costs that fit the definition of "MTDC Base" given, then multiply by the appropriate rate given in the table that follows:

* If a budget crosses the 2 time periods above, creating a budget segment in one period and another budget segment in the other period, use the F&A rate that applies to the longer of the two budget segments.

1. The work will be required to be off-campus based on the nature of the work and the requirements of the award. (convenience of the employee or telecommuting is not a consideration. 

2. The work will be conducted for over 120 continuous days. (Absence for over 120 days in itself is not sufficient justification for the off-campus rate.)

3. buildings and administrative work areas will be leased or purchased through the sponsored project

4. Off-Campus rate can be used only if the administrative structure of an activity is relocated from the University, Research Park, or the Medical Center for more than 120 days.

4.4.2 Institutional F&A Waivers

It is the policy of the University to collect full F&A on all sponsored projects.  The following are institutional F&A waivers that have been approved by the Vice President for Research to waive the F&A policy. Before a waiver can be used, it must be reviewed by the Office of Sponsored Projects, to be sure the project is applicable and follows the guidelines of the waiver.

Undergraduate Wages

Waiver: No F&A is charged on any undergraduate wage.

This waiver is granted to the "undergraduate wages" account code as a direct cost item. The proposal to the sponsor should include applicable F&A.  The University will waive the F&a when the funds are spent.  The request for the sponsor's allowable F&A rate should be applied to all other direct costs.

Note: This waiver is not like undergraduate research support projects, in that it can be used with non-undergraduate-specific projects (usually pure research).

Undergraduate Research Support Projects

Waiver: All direct costs and sponsors F&A will be used directly for undergraduate support

Awards dedicated to undergraduate research and/or training (all direct costs support the undergraduate) have specifically been granted a full waiver by the VP/Research. Some examples:

REU (National Science Foundation's Research Experiences for Undergraduates); similar programs from any sponsor.

Undergraduate clinics

Affiliate Agreements/Affiliate Consortiums/Corporate Research Memberships

Waiver: 100% of F&A at sponsor's rate (0 F&A budgeted)

Projects that tie a PI's research efforts to a research topic with multiple sponsors; with a provision that the PI will not share intellectual property with competitors of the affiliated members.

An Affiliate Program musg be approved by the VP for Research and an individual agreement must be signed by each member.

Note: AN AFFILIATE AGREEMENT MUST ALREADY BE IN PLACE before this waiver is granted! This covers only the membership fee not research or other project funding.

Project Transfers

Waiver: Difference between previous project F&A rate and new project F&A rate after transfer

The following are pre-approved blanket waivers of Facility and Administrative (F&A) costs, applied when a sponsored project (contract, grant, subgrant or subcontract) is transferred as a whole or in part from one location to another, concurrent with the relocation of a Principal Investigator (PI) or significant Co-PI.

If a PI is coming from a location where the negotiated F&A rate is lower than that of the University of Utah, the lower F&A rate can be used for the remainder of the project period.

If a PI is relocating to the University of Utah and determines a subcontract to their original location to a significant Co-PI is necessary to complete the scope of work, then the F&A on the first $25,000 of the subcontract is waived.

If a significant Co-PI is relocating from the University of Utah and the PI determines a subcontract is necessary to complete the scope of work, then the F&A on the first $25,000 of the subcontract is waived.

If the PI from a subcontracted location relocates to another location, the F&A on the subcontract to the new location is waived for the current project period.

Sponsor's Policy on F&A Rates

Waiver: The difference between the University's approved F&A rate and the Sponsor's F&A rate.

If a sponsor has a "written and universal" policy of paying a specific Facilities and Administrative (F&A) rate for all similar agreements regardless of which institution or site is the recipient of the funds, the University of Utah will accept that rate. A "written and universal" policy means the Sponsor has as a matter of organizational policy or procedure, a single F&A rate that applies at all times for all similar awards, situations, or conditions. In practice, this means that the Sponsor does not pay a more generous F&A rate to other institutions or sites for the same or similar awards or agreements.

To accept an F&A rate different from the federally negotiated rate, the Principal Investigator or Sponsor will need to supply a copy of the Sponsor’s policy at the time of proposal review or agreement negotiation. This policy, if not published in a Request for Proposal or Sponsor Guidelines, must be on the Sponsor's letterhead and signed by the Sponsor's authorized official.

When a Principal Investigator's or the University relationship to a sponsor results in a potential conflict of interest with the University, the University will not be able to deviate from the standard negotiated F&A rates for that sponsored project without specific approval from the Vice President for Research.

Approved Industrial Affiliate agreements are excluded from this policy

Reference

15. Appendix

Memorandum - Negotiated F&A Rate Change

Memorandum - Undergraduate Student Waivers

DHHS Rate Negotiation Agreement

Facilities and Administrative Cost Information