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 2 CFR 200 (section E).
Federally negotiated F&A cost rates generally will be applied on all proposals unless:
- The F&A rate is limited by federal statute or regulation.
- The funding agency has a special rate pre-approved by SPARCS (sponsor capped rate aka pre-approved under-recovery rates).
- The sponsor is a non-profit organization with a published, consistently applied policy limiting F&A.
All other exceptions to the university’s negotiated rates require prior approval from the College Research Office and SPARCS. Approved exceptions may result in a financial penalty to the requesting College.
Please note that any subcontractors also must adhere to sponsor F&A restrictions NC State honors.
Predetermined Rates to be applied to projects proposed from 07/01/2016 to 06/30/2020
|Research||Instruction|| OSA** &
|OFF CAMPUS||27.6% Adjacent*|
*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).
Uniform Guidance (Appendix III, C.7) advises that rates should be fixed for the life of an agreement.
Federally Negotiated Rate Agreements
Determining the type of project you are proposing (updated as of 5/7/14)
|Research:||Investigation or experimentation aimed at the discovery of new knowledge or that builds upon existing knowledge. The creation of new knowledge and/or the use of existing knowledge in a new and creative way resulting in new concepts, methodologies and understandings.|
|Instruction:||The dissemination of knowledge or information through teaching and non-research training activities. These activities include developing or compiling course and curriculum materials/programs.|
|Other Sponsored Activities:||Disseminate known knowledge or processes. Service performed for the benefit of the public. A program that geographically extends the resources of the institution to entities or persons otherwise unable to take advantage of such resources.|
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 defined in the Uniform Guidance under 200.68. Direct charges such as tuition, scholarship and fellowship costs, participant support costs, capital expenditures, 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
- Participant support costs
- Capital expenditures
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. If the sponsor allows 30% TFFA, 42.857% TDC would be used to arrive at 30%.
New RFA’s coming out of USDA-NIFA state the following: “Pursuant to section 720 of the general provisions to the consolidates and continuing appropriations act, 2012 (Pub. L. 112-55), indirect costs are limited to 30% of the Total Federal Funds provided under each award. Therefore, when preparing budgets, applicants should limit their requests for recovery of indirect costs to the lesser of their institution’s official negotiated indirect cost rate or the equivalent of 30% of TFFA.”
- 30% of TFFA is equivalent to 42.857% TDC.
- To figure out which rate to charge, you will need to calculate both and use the lesser of the two. If there are no exclusions (i.e. equipment, tuition, subcontract amounts greater than 25k), then TFFA is usually always going to be less than the University’s official negotiated indirect cost rate. But if you have significant exclusions in your budget, it is likely that the University’s official indirect cost rate will be less. The only way to know is to calculate the budget both ways and use the amount.
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 firstname.lastname@example.org.