This Primer is designed to provide background information about Facilities and Administrative (F&A) costs to members of the University of Washington community. It begins with a brief history of F&A cost funding, then describes how F&A cost rates are calculated, defines the various cost components used to calculate an institutional rate, and explains how F&A cost recovery provides significant funding for the infrastructure and administrative activities necessary to carry out the University's research programs.
The May 1996 revision of the Cost Principles for Educational Institutions (OMB Circular A-21) replaced the term indirect costs with the term Facilities and Administrative (F&A) costs. The two terms--indirect costs and F&A costs--have the same meaning. Throughout this primer, we will use the official term used in OMB Circular A-21--facilities and administrative (F&A) costs.
Based on its April 1996 rate proposal to the Department of Health and Human Services (approved May 1997), the UW submitted a request in August 2000 for an extension to that earlier agreement. Negotiations were finalized in February 2001 and revised rates for the additional years were established through June 30, 2004.