Facilities & Administrative Costs

Definition

Facilities and administrative (F&A) costs are those incurred for common or joint objectives and cannot be identified readily and specifically with a particular sponsored project. F&A costs are also referred to as Facilities and administrative (F&A) costs.

For example, an investigator's use of electrical power, water and other utilities, or the services of the purchasing and accounting offices or the library are not normally charged directly because it is not practical to account for them separately.

The UW has standard F&A cost rates for on- and off-campus (there are a few exceptions). The standard rates are negotiated and approved by Department of Health and Human Services. Refer to Management Accounting and Analysis for more information on how the standard rate is calculated. After 1987, Facilities and Administrative (F&A) costs are not charged on gifts.

F&A costs benefit the research but are initially paid for by the University. The F&A cost rate (expressed as a percentage) is charged to direct costs on each research project to reimburse the University. Almost all award documents detail the authorized F&A cost rate and the awarded F&A cost amount.

Process Overview

  • The awarded F&A amount is specified on the award document. It is calculated by multiplying the applicable F&A cost rate by the base.
  • The base is calculated by subtracting all budget categories not subject to F&A costs from the total direct costs awarded.
  • OSP prepares and sends a Notice to Establish Account (NEA) with F&A cost information to GCA.
  • GCA sets up the F&A cost rate, base and encumbrance in the Financial Accounting System (FAS) at the beginning of the budget period.
  • As direct charges post in FAS, F&A costs post automatically to the grant budget.
  • PI/Department monitors F&A costs charged to the grant.
  • GCA prepares journal vouchers to adjust the F&A cost if necessary.

PI/Department Responsibilities

  1. Make sure the F&A cost rate, base and special conditions detailed on the award document match the NEA and FAS.
  2. Monitor F&A costs charged on grants or contracts on a monthly basis as part of the BAR/BSR reconciliation process.
  3. Notify GCA if there are manual changes required to F&A costs due to the following:

GCA Responsibilities

  1. Set up Facilities and administrative (F&A) cost rates.
  2. Prepare journal voucher adjustments to Facilities and Administrative (F&A) costs.
  3. Process rebudgeting requests.

Example

This example reconciles F&A costs charged on the BAR. The F&A cost rate is 26% and the F&A cost base is 18 (Modified Total Direct Costs). For this base, equipment and tuition are not subject to F&A costs.

Direct Cost Categories

FAS Object Code

Amount

Salaries & Wages

01

10,000

Rent

03-80

4,000

Travel

04

5,000

Supplies

05

2,000

Equipment

06

3,500

Benefits

07

2,500

Tuition

08-05

1,000

Total

 

28,000

Amount of direct costs on which F&A cost will be calculated:

Total Direct Costs

28,000

Less: Exemptions

 

Rent

(4000)

Equipment

(3500)

Tuition

(1000)

Base

19,500

X F&A Rate

26%

F&A Costs

5,070

Helpful Hints

  • Facilities and administrative (F&A) cost waivers must be approved by OSP.
  • Provide required documentation to GCA at least quarterly for special Facilities and administrative (F&A) cost adjustment.
  • Consider impact on Facilities and administrative (F&A) costs when rebudgeting and charging direct costs.
  • Account for special Facilities and administrative (F&A) cost rates and exemptions to prevent overspending.

References

  • OMB A-21 - 5/19/98, Principles for determining costs applicable to grants, contracts and other agreements with educational institutions
  • GIM-6 - Facilities and administrative (F&A) cost charges on revised budgets
  • GIM-13 - Facilities and administrative (F&A) cost rates for proposal preparation and application on awards beginning 6/98
  • Colleges and Universities Rate Agreement - Rates for calculating Facilities and Administrative (F&A)costs
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