Indirect Costs

Facilities and Administrative costs (F&A; also referred to as indirect costs or overhead) are those costs associated with the conduct of sponsored activities that are incurred for common or joint objectives and therefore are not readily identifiable with a specific project. Examples of costs normally considered to be F&A costs include administrative/clerical; facilities management and utilities; general-purpose equipment; office supplies; postage; memberships and dues; subscriptions/books/periodicals and local telephone charges. For additional information/guidance see OMB circular A-21
Normal F&A cost rates will generally be applied on all proposals unless the funding agency prohibits facilities and administrative costs or maintains a special rate (sponsor capped rate aka pre-approved under-recovery rates). If there is a sponsor restriction on F&A, please note that our subcontractors must also adhere to said restriction. Any exception to NCSU’s fully negotiated rates or sponsor capped rates will require prior approval from the College Research Office and the Associate Vice Chancellor for Research.


Rates to be applied to projects proposed on or after 07/01/2012

 
Research
Instruction
OSA** &
PUBLIC SERVICE
ON CAMPUS 51.5%52%33.6%
OFF CAMPUS 27.6% Adjacent*
26% Campus
26%20%

*Off-campus Adjacent – Activities performed within the community area of the campus. (This includes virtual access to the NCSU Library.)
**OSA = Other Sponsored Activities

Above Rates are Applied to the Modified Total Direct Costs (MTDC Base).

Note:  OMB Circular A-21, Section G.7 advises that rates should be fixed for the life of an agreement.


Determining the type of project you are proposing

(Some examples are research, instruction or public service.)

Activity
Definition
Research:Separately budgeted scholarly or scientific investigation or inquiry; To study thoroughly.
Instruction:Training or teaching activities (other than research training) including the development and distribution of curriculum in a matriculated setting such as at the University or for K-12 education. It does not include the development of training materials for a project otherwise in the Public Service or Extension domain - that would fall under Other Sponsored Activities.
Other Sponsored Activities:Programs and projects that involve the performance of work other than instruction and research. Examples of such programs and projects are health service projects, and community service programs.

Sponsored agreements will not be subject to more than one facilities and administrative cost rate. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project. Similarly, if your project contains components from more than one classification (i.e. Research and Instruction) then only the rate of the most significant component will apply.


Most common bases used to calculate F&A are MTDC, TDC and TFFA

MTDC = Modified Total Direct Costs whereby direct charges such as Tuition, Scholarship and Fellowship costs, Equipment greater than $5,000, and each subcontract budgeted amount beyond $25,000 are excluded from the basis of computing facilities and administrative costs. Standard facilities and administrative costs are charged on all costs with the exception of:

  • Equipment items costing $5,000
  • Subcontract amounts over $25,000 for the life of the project, F&A costs are only charged on the first $25,000 of each subcontract
  • Tuition and Scholarship costs

Some agencies such as the NSF do not allow facilities and administrative costs charged to participant support costs for activities such as symposium, seminars or workshops. If in doubt check with the cognizant College/Unit Research Administrator or contact SPARCS.

TDC = Total Direct Costs whereby the F&A costs are charged on ALL costs, no exclusions or exceptions.

TFFA = Total Federal Funds Awarded whereby the F&A is considered to be on the full amount of the award, but is actually calculated using TDC.  For example, if the sponsor allows 22% TFFA, 28.20513% of the TDC would be used to arrive at 22% TFFA.

Under no circumstance can more F&A be requested than what would be allowed using the federally negotiated rates identified above. For example, if you are using the 22% on Total Federal Funds Awarded (TFFA) as required by the USDA-NRICGP, it is not uncommon for the total F&A request to be in excess of what the full, federally negotiated rate and base would produce if applied. This can happen because under the federally negotiated rate, cost elements such as equipment, tuition and subcontractor costs in excess of $25K are excluded from the base prior to applying the rate. In the USDA example, nothing is excluded which often results in a substantially higher base. For proposals being submitted to Federal agencies, it is very important to calculate the F&A both using the sponsor’s F&A rate as well as our federally negotiated rate to ensure we are not charging excess F&A. The lesser of the two amounts for F&A should be used.


Under-recovery of Indirect Costs (F&A) as Cost Share

Foregone or under-recovery of facilities and administrative costs on the sponsored portion of a project as well as facilities and administrative costs associated with the University contribution can generally be claimed as cost sharing. If facilities and administrative costs are defined as unallowable by the sponsor, then such costs are also unallowable as cost share; however, unallowability must be determined by statutory regulations for all federal agencies. Under-recovery of facilities and administrative costs may only be used as cost sharing if facilities and administrative costs are considered un-reimbursed rather than unallowable costs. Additional guidance can be found on the Cost Sharing webpage. Please contact SPARCS if you would like assistance negotiating F&A allowability with sponsors.


For specific guidance on this matter call SPARCS at 515.2444 or email sps@ncsu.edu.