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Facilities and Administrative Costs (F&A)

Facilities and Administrative Costs (F&A)

Home > Facilities and Administrative Costs (F&A)
08/21/2017 - 1:32pm

Facilities and Administrative (F&A) Costs - General Information

ASU's policy is to request and recover full F&A costs, whenever possible.  ASU will apply the appropriate F&A on all proposals unless the prime sponsor prohibits or has a published policy limiting the F&A rate. ASU as the primary applicant or subgrantee will adhere to the rate limit. ASU subcontractors will also adhere to the rate limit.

What are they?

Facilities and Administrative (F&A) costs - overhead, administrative allowance, or occasionally, institutional allowance - are costs incurred in support of sponsored programs, in general, but not identifiable with any single project. Including requests for facilities and administrative costs (F&A) allows ASU to recover some of its real costs.

How do they differ from Direct Costs?

F&A costs are general in nature, shared by multiple users, where it is not easy to determine each user's share. F&A costs include electricity, water, utilities, and administrative research services.

Direct costs can be assigned to a specific project with a high degree of accuracy. Direct costs include faculty, technical and student salary, ERE, travel, scientific supplies, equipment, tuition, human subject incentives, animal costs, consultant pay, etc.

WHAT IS A BASE?

It is made up of the specific direct project costs in your budget that are subject to F&A.

CAN THE SPONSOR WRITE A LETTER THAT SAYS WHAT THEY ARE WILLING TO PAY?

Acceptable documentation of a Sponsor’s F&A restriction is outlined in the funding opportunity announcement (FOA), published on their website or in their Sponsor guidelines.  A letter signed by the Sponsor’s Authorized Representative (i.e.... CEO, CFO, etc.) will be reviewed on a case by case basis by the assigned PNT GCO for acceptability.  If acceptable, an F&A waiver is not needed. Letters and emails from For-Profit Sponsors (i.e, Industry) will not be accepted.  

THE SPONSOR SAYS IF THE ASU/ASUF RATES are used,  IT MAY IMPACT THE DECISION TO FUND the PROPOSAL.  WHAT CAN be done?

If there are published guidelines which specify the amount budgeted for F&A will be used in the review criteria or the sponsor formally indicates that an award will not be issued unless a specific rate is used, a request for a reduced F&A rate may be submitted through proper channels for consideration.  F&A rate reductions do not carry over to requests for competing continuations/ supplements/renewals. A new request must be submitted each time and there are no guarantees of approval.

Facilities and Administrative (F&A) costs - ASUF as Applicant

For information about the rates and policies which apply to ASUF charitable grant applications, review the "Working with ASUF" Sitelet.

Facilities and Administrative (F&A) costs - ASU/ORSPA as Applicant

Who determines ASU's F&A rates?

The federal government determines the rates in conjunction with ASU using 2 CFR 200 (Uniform Guidance). ASU’s cognizant audit agency for this process is the U.S Department of Health and Human Services (DHHS). Facilities and Administrative cost rates are proposed, negotiated and approved every five years. Fringe benefit rates are proposed, negotiated and approved annually. The most current F&A Rate agreement continues in effect until new rates are finalized.

Why is DHHS our Cognizant Audit Agency?

There are three cognizant audit agencies (ONR, DoED, DHHS). Only universities who receive the bulk of their sponsored funding from DOD or DoED are assigned to the ONR or DoED cognizant audit agencies. All other universities are assigned to DHHS.

Is the rate the same for every project?

No.  The rate and base vary according to the type of project and the project’s performance site.  Use the F&A rate determination wizard.

Do all projects use the same F&A base?

No. There are multiple bases, each appropriate to different situations.

Modified Total Direct Costs (MTDC)

F&A is applied to all of the direct costs minus the following: equipment with a unit cost greater than or equal to $5,000, tuition/fees, participant support, in/out patient care costs, rental of outside facilities, amounts over the first $25,000 of each subcontract, and alterations/renovations. Alterations/Renovations are defined as having a cost of $15,000 or more per alteration or renovation. Costs of less than $15,000 are considered a miscellaneous expense and are subject to F&A.

Total Direct Costs (TDC) The F&A rate is applied to all of the direct costs without exclusions. Total Direct Costs must be used for all sponsors who publish an F&A rate less than our standard rate (or full F&A rate) and do not stipulate any direct cost category exclusions.
Total Costs This base is determined using total project costs.  For assistance with calculation of this unusual base, RAs may contact the PNT GCO assigned to their proposal.
Total Direct Costs minus exclusions This rate is used when a sponsor determines the categories to which F&A may be applied.  For example, some sponsors may allow F&A only on personnel; others may allow all direct costs minus equipment, etc.

What Types of Projects are There?

For types of projects, see the F&A Wizard.

Do I Use the On-Campus or Off-campus rate?

If project activity occurs only at ASU facilities, then the on-campus rate is applied. If project activity occurs only at non-ASU facilities (including projects for which lease payments are direct charged to the project), then the off-campus rate is applied.
 
If project activity occurs both at ASU facilities and at non-ASU facilities (i.e.....  on- and off-campus), then a determination is made based on where personnel costs are incurred. If 75% or more of the project’s budgeted personnel costs are incurred at non-ASU facilities for which no rent is budgeted, then the off-campus rate will apply. If the project does budget rent for the non-ASU facilities, then if 50% or more of the project’s budgeted personnel costs are incurred at the non-ASU facility, the off campus rate will apply.  Otherwise, the on-campus rate will apply to the entire project.
 
Subcontractor activities are excluded from the on/off campus rate determination.  Only the portion of work to be actually conducted by ASU is considered.

WHAT IF A PROJECT QUALIFIES FOR THE OFF-CAMPUS RATE in SOME YEARS BUT NOT in OTHERS?

Budget the off-campus rate for the years the project qualifies and the on-campus rate for the rest of the years.

Which F&A rate should be applied if A project crosses fiscal years?

Use the F&A rate for the later year.

the sponsor is requesting a revised budget in order to make an award.  Which F&A rate should be applied?

Use the F&A rates in the current DHHS approved agreement.

WHAT F&A RATE SHOULD BE USED WHEN PREPARING SUPPLEMENTS, Renewals, AND NON COMPETING CONTINUATIONS?

Use the F&A rates in the current DHHS approved agreement.

Do all proposals use the DHHS Approved F&A Rates?

There are some exceptions. However, it should be noted that these exceptions only apply when there are no federal funds involved. Projects with federal flow-through funds must abide by the instructions of the federal sponsor.

Industry/For-Profit Sponsored Research Agreements Use the F&A wizard to determine rate.
Non-Profit and Non-Federal Government Sponsors

If the funds originate with the federal government and are flowing through the non-profit or the non-federal government sponsor, the federal program’s rates prevail.

If flow-through funds are not involved AND the non-federal governmental or non-profit sponsor has their own established F&A policy, check ASU’s list of Limited F&A Rates.  If they are listed, then budgets for that sponsor may proceed to preparation without further ASU approvals.  If the sponsor is not listed, proceed according to published sponsor instructions but include the policy in ERA 8.1 (Internal Reference Attachments).  No further action is needed.

If there is no published, uniformly applied rate, then determine the rate using the F&A wizard.

Federal Sponsors with a Published Program Rate

Provided the rate is written into the program guidelines, ASU will automatically accept the rate and base indicated. 

If solicitation is for a “Training Grant" program (as defined in 34 CFR 75.562) or is under “Supplement not Supplant” requirements, a Sponsor restricted F&A rate may apply.

Include a copy of the rate/base required by the program in ERA 8.1 (Internal Reference Attachments).

Note:  Federal employees such as program and administrative officers at NSF, NIH, and others are prohibited from requesting a reduced facilities and administrative rate unless it is specifically covered by the program announcement or the written regulations governing the program. RAs should immediately refer these requests to the PNT GCO assigned to the proposal.

WHAT RATE SHOULD BE USED ON FLOW-THROUGH FUNDS?

The prime funding announcement should be reviewed to determine if there is any limitation on the subrecipient F&A rate. If there are any terms and conditions which flow down to a subaward that are specifically stated in the funding announcement limit the rate, those guidelines apply.

If the prime is federal, the FA terms and conditions flow down to the Subrecipient. If the prime is nonfederal and there are no flow down provisions, the rates in the F&A Wizard are appropriate.

If no flow-down provisions exist:

Prime Sponsor

Sponsor

Example

Applicable F&A Rate

Federal

Non-federal

DOE -> UofA->ASU

Federal prime sponsor's published rate

Non-federal

Non- federal

Hope on Wheels ->PHX Children's Hospital -> ASU

The prime sponsor's published policy; If none, use the F&A Wizard

WHAT RATE SHOULD iNSTITUTIONS THAT WILL BE INCLUDEd AS A SUBAWARD oN ASU'S PROPOSAL USE?

Review the funding announcement to determine if there is any limitation on the F&A rate.  If the funding announcement includes a limited rate, the rate will be flow down to the subrecipient and the subrecipient should use this rate.  Where no agreement exists and there is no sponsor published policy, the subrecipient may include up to 10% MTDC for F&A.

SHOULD F&A ON THE FIRST 25K BE APPLIED WHEN ASU's' PROJECT includes FUNDS FOR A FEDERALLY FUNDED RESEARCH AND DEVELOPMENT CENTER (FFRDC) AND/OR OTHER FEDERAL AGENCY?

If funds will be awarded to the FFRDC (or other federal agency) by way of a subcontract from ASU, F&A on the first 25K should be included.   However, if the funds will be awarded directly, via an interagency agreement, to the FFRDC (or other federal agency) by ASU's sponsor, F&A on the first 25K does not apply.

Can an example be provided when the rates for ASU and a subrecipient might be different?

An example of this is the Bill and Melinda Gates Foundation.   If ASU is the primary applicant, ASU’s F&A cannot exceed 10% TDC.   However, Bill and Melinda Gates funding announcement allows for when ASU includes a subaward to an international Subrecipient, the international Subrecipient F&A may charge up to 15% TDC.

Do the Rates in the F&A Wizard apply to projects being transferred in to ASU?

The F&A wizard has a special section devoted to projects being transferred in by PIs joining ASU. The rates in this section, in combination with Transfer of Sponsored Projects to ASU page, provide information pertaining to these projects.

 

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