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GIM 13

Facilities and Administrative (F&A) Rates

UNIVERSITY OF WASHINGTON

Office of Sponsored Programs

GRANTS INFORMATION MEMORANDUM 13

Effective December 26, 2014

Supersedes: GIM 13, November 17, 2011

This GIM is updated to conform to the Federal Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) effective December 26, 2014. This GIM applies to new awards and new funding for existing awards received on or after Dec 26, 2014.

For awards in existence prior to December 26, 2014 that have not received supplemental funding or are not otherwise subject to the Federal Uniform Guidance per sponsoring agency award terms and conditions, please refer to the Archived GIM 13.

Purpose

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

Background

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance) includes principles for determining costs applicable to grants, contracts, and other agreements between the Federal government and non-federal entities, including higher education institutions. The Uniform Guidance defines criteria for determining both direct and F&A costs. In addition, the Uniform Guidance establishes a mechanism for higher education institutions to calculate, negotiate, and recover F&A costs from federal and other sponsors.

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 purpose benefitting more than one cost objective that cannot be readily assigned to a particular sponsored project. F&A costs are also referred to as "indirect costs."

Management Accounting and Analysis (MAA), a division of Financial Management, 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 the Uniform Guidance, 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 and 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 program budgets as set out in the F&A Rate Agreement, unless one of the following applies:

Special Cases Description
Affiliated organizations When the University has an established agreement in place with an affiliated organization that determines the rate applicable to the funding, the University will accept that rate.
Federal sponsors (including federal flow-through, no matter the pass-through entity type) Since all Federal awarding agencies must accept negotiated rates and all pass-through entities must honor negotiated rates, the University will accept a rate cap only if the rate is limited by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification, after proper notification to the Federal Office of Management and Budget. Such criteria used to cap the rate must be publicly available.
Non-Federal government sponsors The University will accept a rate cap if the non-federal government sponsor has a bona fide policy as evidenced by reference to an approved F&A rate established by statute, in the official program announcement, or on the sponsor-approved application form.
Industry Sponsored Clinical Trials Industry sponsored clinical trials have a University established rate of 27% TDC.
Non-profit sponsors The University will accept a rate cap if 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 with a total cost of$5,000 or less over the life of the award The University will accept a rate cap if it is for a single project with a total cost of $5,000 or less 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 nor does it apply to industry sponsors.
Transfer from another institution with a lower F&A rate on established project The University will accept a lower rate 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. This does not apply to requests for additional funding from the sponsor for the project, once the project is transferred.
Fabrication of Equipment Equipment that is being fabricated for use at the University has the cost of fabrication broken into individual direct costs towards the fabrication, and can include salaries and supplies. These direct costs are excluded from the base calculation when applying F&A. Other costs associated with the project that are not costs towards equipment fabrication are charged F&A per the rate agreement. Costs associated with equipment fabrication when the equipment is for delivery to an external entity are charged F&A at the rate set out in the F&A Rate Agreement. More information can be found at the Equipment Inventory Office's website.
Subawards to another entity The University will honor an approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal government for the activity proposed. If no such rate exists, the University will include a de minimis indirect cost rate of 10% of MTDC or we will negotiate an appropriate rate. Please see GIM 7 for more information.

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 programs.

Any deviation below the rate in the F&A Rate Agreement or not listed under Special Cases will require advanced approval of an F&A waiver by the Office of Sponsored Programs. This approval will only be granted in limited situations. 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.

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.

Effective Date for F&A Rates and Provisional Rates

Types of Institutional Activity

Locations of Activity

Activity at Two or More Locations

Base Calculation

Projects with Washington State Governmental Agencies

Subawards and F&A

Exceptions to University Policy on F&A Rates/Procedure for Submitting an F&A Waiver

Responsibilities

Assistant Vice Provost for Research
Dean, Director, Unit Head
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.
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 subawards up to the first $25,000 of each subaward (regardless of the period covered by the subaward). Equipment, capital expenditures, charges for patient care and tuition remission, rental costs, scholarships, and fellowships as well as the portion of each subaward 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 Program
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.
Subaward
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).
Uniform Guidance
Uniform federal regulations regarding administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities.

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 Rate Agreement
Federal Cost Principles Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance
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

Review Schedule

This policy is reviewed by the Office of Sponsored Programs at time of approval of new F&A rate agreement and as necessary to reflect changes in Federal regulation or University policies.