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  5. F&A (Indirect) Cost Rates Overview

F&A (Indirect) Cost Rates Overview

What Are F&A Costs?

The importance of recovering Facilities and Administrative (F&A) costs as part of the full cost of a sponsored project cannot be overstated. F&A costs are real, auditable expenses of University operations.

The University’s F&A rates are negotiated with the U.S. Department of Health and Human Services and reflect auditable expenses incurred in the conduct of sponsored activities. Included among these expenses are heating and air-conditioning, lights, custodial services in the lab, occupational safety, hazardous waste disposal, maintenance and repairs and depreciation costs of buildings and equipment, and general administrative costs such as sponsored programs administration, departmental administration and general administration (accounting, purchasing, legal services, personnel, and compliance).

Why Are They Considered “Indirect?”

These expenses are “indirect” because they are not easily identified with a specific project and therefore are not included in the “direct” portion of the budget. F&A charged on projects provides reimbursement for actual institutional expenses that cannot be directly charged to a grant or contract. F&A costs support the conduct of sponsored projects, regardless of the source of funding, and therefore must be applied to all sponsored projects.

All sponsored project budgets should include all costs needed to accomplish the objectives presented in the statement of work. The total cost of any project includes both direct costs (salaries for the researchers, lab supplies, travel, etc.) and facilities and administrative costs (F&A).

Definitions

Indirect (Facilities & Administrative (F&A)) costs

Indirect (F&A) costs means those costs incurred for the common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved.

Last Reviewed

05/01/2020: reviewed content

Resources

Fringe Benefits Rate table

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