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GIM 13

Facilities and Administrative (F&A) Rates

UNIVERSITY OF WASHINGTON

Office of Research
Office of Sponsored Programs

GRANTS INFORMATION MEMORANDUM 13

November 17, 2011

Supersedes: GIM 13, April 23, 2007

Purpose

This policy documents Facilities and Administrative (F&A) rates applicable to sponsored projects.

The Federal Office of Management and Budget (OMB) Circular A-21 establishes principles for determining costs applicable to grants, contracts, and other agreements between the federal government and educational institutions. Circular A-21 defines criteria for determining both direct and F&A costs. In addition, Circular A-21 establishes a mechanism for higher education institutions to calculate, negotiate, and recover F&A costs from federal and other sponsors.

For more detailed information on the University's Costing Policy, please refer to GIM 23.

Background

Direct costs are those costs that can be identified specifically with a particular sponsored project with a relatively high degree of accuracy. F&A costs are those costs incurred for a common or joint objective that cannot be identified readily and specifically with a particular sponsored project. F&A costs were historically referred to as "indirect costs."

The University Financial Management Division of Management Accounting and Analysis (MAA) periodically develops and negotiates the University's F&A proposal with the Department of Health and Human Services, Division of Cost Allocation (HHS-DCA). F&A cost rates are based on the University's actual operating costs. Using Circular A-21, the University assesses its F&A costs on a regular basis and allocates these costs to different activities, such as research or teaching, proportionate to the benefit provided. Once all F&A costs are determined, the University then determines the portion of those costs that are attributable to research. This information is reviewed by the federal government. F&A cost rates are negotiated every 4 to 5 years. This becomes the F&A Rate Agreement.

Persons / Offices Affected

Principal Investigators, Research Personnel, Research Administration Personnel, Academic Unit Chair, Dean's Office, eGC1 Reviewers, Office of Sponsored Programs, Grant and Contract Accounting, Management Accounting and Analysis, Assistant Vice Provost for Research, Office of Planning and Budgeting.

University Policy

The University calculates and includes F&A costs in all sponsored project budgets as set out in the F&A Rate Agreement, unless one of the exceptions below apply:

Exception Description
Affiliated organizations When the University has an established agreement in place with an affiliated organization that determines the rate applicable to the funding.
Government sponsors The Government sponsor has an approved F&A rate established by statute or in the official program announcement.
Industry Sponsored Clinical Trials Industry sponsored clinical trials have a University established rate of 27% TDC.
Non-profit sponsors The non-profit entity has a published policy as evidenced by reference on the non-profit's website, in the official program announcement, or on the sponsor-approved application forms. Alternatively, if the entity is listed on the non-federal sponsor F&A rate table, the rate listed will be accepted as the rate cap for that sponsor, unless otherwise specified by that sponsor by policy, website, program announcement or application form.
Research Affiliate Programs (RAPS) 20% of membership fees are allocated to F&A. Annual membership fees are inclusive of F&A. RAPS Members must pay full F&A for all other non-qualifying sponsored projects.
A single project is less than $5,000 total cost over the life of the award This exception does not apply to multiple awards of $5,000 or less from the same sponsor for the same project.
Transfer from another institution with a lower F&A rate on established project When a PI transfers his/her project to the University of Washington from another institution, and the rate awarded for the project is lower than UW's established F&A rate.

Use of a listed exception does not require an F&A waiver by the Assistant Vice Provost for Research.

In limited situations, with advance approval, the Assistant Vice Provost for Research may allow the use of a lower rate if one of the above exceptions is not applicable. An application for an F&A waiver must be made in the form required by the Office of Sponsored Programs and included with the sponsored project proposal materials.

The University may charge an F&A rate that is higher than the applicable federal rate for a sponsored program funded by a for-profit entity, and in all cases, will not charge F&A rates that are lower than those applied to federally sponsored projects.

F&A rates are applied to the cost base associated with the location and type of project as specified in the F&A Rate Agreement unless a sponsor has a stated cost base in the official program announcement. When a non-federal sponsor's policy does not specify a base type, the Total Direct Costs (TDC) cost base applies.

The Table of F&A Rates and Base Types for the University of Washington provides a summary of the negotiated rates within the current F&A Rate Agreement for the University as well as other established rates for some specialized studies and agreements.

Procedures and Guidance

In order to implement the University policy on F&A rates, it is necessary to follow the procedures and guidance outlined in this section.

Responsibilities

Assistant Vice Provost for Research
Dean
Department Chair
Principal Investigators
Office of Sponsored Programs
Unit Administrator/Fiscal Lead
Grant and Contract Accounting
Management Accounting and Analysis
Vice Provost for Research

Definitions

Affiliated organization
Independent organization with which the University has a business relationship. Examples include Seattle Children's and Fred Hutchinson Cancer Research Center.
Capital expenditures
Building alterations or renovation costs over $25,000.
Circular A-21
Uniform federal regulations in regards to charging of costs to grants, contracts, and other agreements with educational institutions.
Cost Base
Consists of project direct costs that are charged Facilities and Administrative (F&A) costs.
Direct Costs
Those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
Equipment
Tangible nonexpendable personal property having a useful life of more than one year, and an acquisition cost of $2000 or more per unit.
Facility & Administrative (F&A) Costs
Costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.
F&A Rate Agreement
The rates and associated cost basis agreed to between the University and the Department of Health and Human Services, Division of Cost Allocation (HHS-DCA). Please see the Table of Established F&A Rates and Bases for the University of Washington for a summary.
Fellowships
Awards that consist of a stipend payment from the sponsor to an undergraduate, graduate, professional or post-doctoral student.
Indirect Costs (IDC)
See Facility and Administrative Costs
Industry Sponsored Clinical Trial
A human subjects research study funded by industry, the primary purpose of which is to assess the safety and/or efficacy in humans of a drug, device, diagnostic, treatment, preventive measure, or similar intervention through testing of the intervention on patients in a clinical setting.
Modified Total Direct Costs (MTDC)
All salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract). Equipment, capital expenditures, charges for patient care and tuition remission, rental costs, scholarships, and fellowships as well as the portion of each subgrant and subcontract in excess of $25,000 shall be excluded from modified total direct costs.
Non-Qualifying Sponsor Projects
A sponsored project that supports a mutual exchange involving the University and a specific sponsor rather than the general sharing of knowledge by multiple members within a Research Affiliate Program (RAP).
Non-profit
A tax-exempt organization operating under section 501(c)(3) of the Internal Revenue Code.
Patient Care
Both inpatient and outpatient University hospital charges but not laboratory charges assessed through cost centers even though the laboratory results may be used for patient care. Outpatient travel and volunteer incentive payments are subject to F&A Costs.
Research Affiliate Programs (RAP)
Designed to facilitate the transfer of knowledge to society by addressing specific problems shared by multiple industry partners. Supported by corporate sponsorship, these programs provide an avenue for industry to contribute to and sustain research and teaching in University departments and programs of interest. Corporate members typically attend annual meetings, receive copies of reports and publications, and have opportunities to recruit students.
Rental Costs
Costs associated with leased facilities such as rent, utilities and maintenance.
Salary & Wages
A base type that is used for some federal programs. Salary & Wages are the direct salaries and wages including vacation, holiday and sick pay and other paid absences but excluding other fringe benefits.
Scholarships
Funding that covers all or a portion of the costs of education under conditions specified by the sponsor. Scholarships may not represent either payment for employment services or for research that is mostly for the University's benefit.
Sponsored Project
An exchange transaction between the University and the sponsor that is not a purchase or sale of goods or services or "work for hire" arrangement but instead is a mutual exchange involving the University and a sponsor.
Subgrant or subcontract
binding legal contract between the University and another institution regarding completion of a portion of a sponsored project.
Total Direct Costs (TDC)
A base type that is used for sponsored projects. TDC are all costs directly charged to a sponsored project.
Trainee Stipends
The amounts paid to graduate and postdoctoral individuals under fellowships and training grants in accordance with pre-established levels to provide for the individuals' living expenses during the period of training, where there is no employer/employee relationship.
Tuition
Tuition charges paid to the University of Washington (including the operating fee portion of tuition paid on behalf of Graduate Assistants).

Related Resources

SubjectDocument
Grant and Contract Support of University Activities University of Washington Executive Order #34
University of Washington Facilities and Administrative F&A Rate Agreement
F&A Rates: An Explanation University of Washington F&A Rate Primer (formerly GIM 22)
Federal Cost Principles Circular A-21 - Cost Principles for Educational Institutions
University's Costing Policy GIM 23

Contacts

SubjectContactEmailPhone
Primary Office Contact OSP osp@uw.edu 206-543-4043
F&A Cost Calculation MAA    

Content Creator

Responsible University Office Policy Owner
Office of Sponsored Programs Assistant Vice Provost for Research, as delegated by the Vice Provost for Research