GIM 22
Attachment A
A Primer on Facilities and Administrative Costs
6. What is the administrative process for negotiating the final
F&A cost rate?
Once the F&A cost information is assembled and appropriately documented, it is
submitted to the Department of Health and Human Services (DHHS), which is the
University's cognizant federal agency. DHHS negotiators from the Division of Cost
Allocation for Region IX (in San Francisco) make their own evaluation of the
materials submitted and seek to negotiate downward some of the costs included in the
pools.
For the 1995 fiscal year, University documentation supported a rate of 57% for
on-campus research. After extended negotiations with DHHS, the University acceded to
final rates of 48.5% for 1997 and 51% for both 1998 and 1999, and 52% for the years
2000 through 2002. Subsequently, a rate extension of 51.6% was negotiated for 2003
and 2004. These are the current on-campus research rates--the maximum rate which the
University is permitted to charge federal grants and contracts for the fiscal year
specified. Another (lower) rate is established for off-campus research, for which
some of the underlying costs such as building rental are charged directly to the
grant and not borne as an F&A cost by the University. As has already been noted, the
Federal government imposes selective restrictions on the F&A costs attributed to
certain grants, such as the 8% rate on many training grants.
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