UW Research

Policies, Procedures and Guidance

GIM 13 – Facilities and Administrative (F&A) Rates

Effective December 26, 2014

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 benefiting 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 theDepartment 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, Director, Office of Sponsored Programs, 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.
Research storage, managed servers and cloud services provided by UW Information Technology (IT), via vendor contract managed by UW IT, or through Genome Sciences Computer Services Center. UW Information Technology (UW-IT) offers large scale storage services, compute services (managed physical and virtual servers), and related infrastructure and platform services, through a combination of on-campus facilities and contracts with cloud service vendors such as Microsoft and Amazon. Genome Sciences offers large scale data storage and compute services through its Computer Services Center. These costs are identified under UW object code 03-04 (Rsrch Strg, Compt&Cloud) and are exempt from F&A.
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 F&A Rates and Base Types table 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.

F&A Rates and Base Types for the University of Washington

Use the F&A Rate  and Base Type table for preparing sponsored program proposals.

Review Procedures and Guidance to identify activity, location, rate and base.

Questions on the application of F&A rates during the life of a sponsored project?
Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

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

Effective Date

The effective period for rates is stated next to each rate within the F&A Rate Agreement. The date of the rate agreement itself represents the date the agreement is approved and final.

These rates should be used throughout the entire competitive segment of the project. A competitive segment is a period of years approved by the federal funding agency at the time of the award. The rate in effect at the beginning of the budget period should be used for the entire annual budget period.

The rates for supplemental awards (not included in the initial competitive segment), applied at the beginning of the supplement, will be in effect throughout the remainder of the competitive segment for the supplement.

Provisional Rates

When new F&A rates have not been established prior to the expiration of an existing F&A rate agreement, the federal government may approve the use of provisional rates on new awards until new F&A rates are negotiated. The approval of provisional rates is found within the F&A Rate Agreement.

Once F&A rates are negotiated, if new F&A rates are less than the provisional rates, the new F&A rates will be retroactively applied to all federally sponsored projects with a project date beginning on or after the effective date of the new rates. Additionally, all NIH supplements with a start date beginning on or after the effective date of the new rates will have the new F&A rates retroactively applied to the supplement. When new negotiated F&A rates are higher, no retroactive adjustments will be made.

In addition to the rates established with HHS-DCA, the University has determined rates applicable to some specialized studies and agreements. These rates are listed in the Table of Established F&A Rates and Bases for the University of Washington.

Example 1: Use of rates in effect at the time of initial competitive segment

Researcher applies for three years of funding from NIH for an on-campus research project, starting December 1, 2011. Within the proposed modular budget, she has built in the negotiated increase in on-campus rates as set forth in the University F&A rate agreement. The proposed budget is calculated using the rate in effect for an on-campus project at the time of the anticipated start date for year 1 (54%). She uses the rates in effect for an on-campus project at the anticipated budget year start dates for Years 2 and 3 (54.5%). Researcher does not pro-rate the F&A rate mid-budget year in the proposed budget:

Year 1: 12/1/2011 – 11/30/2012 (FY012) Year 2: 12/1/2012 – 11/30/2013 (FY013) Year 3: 12/1/2013 – 11/30/2014 (FY014)
MTDC $250,000 $250,000 $250,000
F&A: Year 1: 54%, Years 2-3: 54.5% $135,000 $136,250 $136,250
Total $385,000 $386,250 $386,250
Example 2: Use of provisional rates

Researcher applies for five years of funding for on-campus research, starting July 1, 2011. In her proposed budget, she has built in the anticipated increase in on-campus rates as set forth in the University F&A rate agreement. Her project period extends past the effective period of the current F&A rate agreement. Per the rate agreement, she uses provisional rates for the years in which there is not an effective predetermined F&A rate. The provisional rates for fiscal years 2015 and 2016 are the same rates as those cited for fiscal year 2014 (54.5%).

Year 1: 7/1/2011 – 6/30/2012 (FY012) Year 2: 7/1/2012 – 6/30/2013 (FY013) Year 3: 7/1/2013 – 6/30/2014 (FY014) Year 4: 7/1/2014 – 6/30/2015 (FY015) Year 5: 7/1/2015 – 6/30/2016 (FY016)
MTDC $200,000 $210,000 $220,000 $230,000 $240,000
F&A: Year 1: 54%, Years 2-3: 54.5% $108,000 $114,450 $119,900 $125,350 $130,800
Total $308,000 $324,450 $339,900 $355,350 $370,800
Example 3: New negotiated F&A rates higher than provisional rates

Researcher applies for five years of funding for on-campus research, starting July 1, 2011. In her proposed budget, she has built in the anticipated increase in on-campus rates as set forth in the University F&A rate agreement. Her project period extends past the expiration of the current F&A rate agreement. Per the rate agreement, she must apply the provisional rates to Years 4 and 5. She uses the same rates as those cited for fiscal year 2014 for fiscal years 2015 and 2016 (54.5%, see Example 2). She receives the award for the full amount, with a start date of July 1, as proposed.

In October 2014, the University finalizes negotiations with HHS-DCA and a new rate agreement, effective July 1, 2014, is issued. This rate agreement establishes the on-campus rate as 56% MTDC. The researcher is currently in Year 4 of her award. No retroactive increase is made to the F&A rate for her award for fiscal years 2015 and 2016 because per University policy, an increase in the F&A rate will not be applied retroactively to an existing award (see “Provisional Rates” above).

The budget remains the same as set out in Example 2.

Example 4: New negotiated F&A rates less than provisional rates / Project Start date precedes effective date of new negotiated F&A rates

Researcher applies for five years of federal funding for on-campus research, starting October 1, 2011. She has built in the anticipated increase in on-campus rates as set forth in the University F&A rate agreement. Her project period extends past the expiration of the current F&A rate agreement. She applies the provisional rates to Year 4 and 5 (54.5%, see Example 2). The federal sponsor makes an award, applying the F&A rates in effect at the time of the start of the project, which have not changed since time of proposal.

Towards the end of FY016, a new rate agreement is negotiated. This agreement establishes the on-campus rate as 53%, effective July 1, 2015. Researcher is currently in Year 5 of her project, which has a budget start date of October 1, 2015. The new rate of 53% for on-campus research is not retroactively applied to the last budget year of the project, because the project start date (October 1, 2011) precedes the effective date of the new negotiated F&A rate.

The budget remains the same as set out in Example 2.

Example 5: New negotiated F&A rates less than provisional rates / Project Start date after effective date of new negotiated F&A rates

Researcher applies for two years of federal funding for on-campus research, starting October 1, 2014. She has built in the anticipated increase in on-campus rates as set forth in the University F&A rate agreement. Her project period extends past the expiration of the current F&A rate agreement. According to the rate agreement, she uses the same rates as those cited for fiscal year 2014 for fiscal years 2015 and 2016 (54.5%). The federal sponsor makes an award, applying the F&A rates in effect at the time of the start of the project, which have not changed since time of proposal.

In the summer of FY015, a new rate agreement is negotiated. This agreement establishes the on-campus rate as 53%, effective July 1, 2014 – June 30, 2017. Researcher is currently in Year 1 of her project, which had a start date of October 1, 2014. The new rate of 53% for on-campus research is retroactively applied to the project because the project start date of October 1, 2014 is after the effective date of the new negotiated F&A rate. She re-budgets in light of the new rate. The difference is put into direct costs (using formula).

Year 1: 10/1/2014 – 9/30/2015 (FY015) Year 2: 10/1/2015 – 9/30/2016 (FY016)
MTDC $200,000 $210,000
F&A: Years 1-2: 53% $106,000 $111,300
Total $306,000 $321,300

Questions on the application of F&A rates during the life of a sponsored project?

Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Types of Institutional Activity

The major functions of an institution, as defined in Federal Uniform Guidance, include instruction, organized research, other sponsored activities and other institutional activities. These are defined as follows:

Explanation of Activity Types

Organized Research: All research & development activities sponsored by federal or non-federal agencies & organizations.
Research: Basic Systematic study directed toward fuller knowledge or understanding of fundamental aspects of phenomena & of observable facts without specific applications towards processes or productions in mind.

Examples: NIH R01, R03, R21; SBIR and STTR Phase I, K99/R00

Research: Applied Systematic study to gain knowledge or understanding to meet a specific recognized need.

Examples: NIH R01, R21, SBIR, STTR, Phase II

Development Systematic use of knowledge or understanding gained from research directed toward production of useful materials, devices, systems, or methods, including design & development of prototypes & processes.

Examples: SBIR, STTR, Phase III (can include Phase II if FOA specifies for development stage)

Fellowship: Research Undergraduate Undergraduate and graduate fellowships focused on training in research techniques. Examples: NIH, HRSA, AHA Individual Fellowships (F series)

Example: NSF Research Experiences for Undergraduates (REU)

Fellowship: Research Graduate/ Professional Undergraduate and graduate fellowships focused on training in research techniques. Examples: NIH, HRSA, AHA Individual Fellowships (F series)
Other Training: Research Activities involving training of individuals in research techniques where training is in the same facility as other research & development.

Example: NIH Research Training Grants (T series)

Clinical Trial, Federal A clinical trial is a human subjects research study, 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.

Examples: Investigator-initiated Extended Clinical Trial, Exploratory Clinical Trials, Multi-Site Trials

Instruction: Specific instructional or training activity established by grant, contract, or cooperative agreement.
Training and Development (UW internal) Non-research related instruction including conferences & workshops, where primary purpose is training & development of UW students and/or personnel.

Examples:

  • Curriculum development for UW students and faculty
  • Educational conference grants for a primary audience of UW students or staff (including faculty)
  • Activity generally takes place in a classroom setting and not in a lab
  • Examples include activity codes such as: D24 Nurse Practitioners Training Programs, D37 Allied Health Special Projects Grants, T15 Continuing Education Training Program, K 30 Clinical Research Curriculum Award, and R13 Conference grants with the audience predominantly UW faculty and students.
Fellowship: Non-Research Undergraduate Undergraduate fellowships not focused on training in research techniques Sponsored internships, apprenticeships and instructional fellowships.
Fellowship: Non-Research Graduate/ Professional Graduate fellowships not focused on training in research techniques. Sponsored internships, apprenticeships and instructional fellowships.
Other Sponsored Activities (OSA): Sponsored programs and projects funded by federal and non-federal agencies and organizations which involve the performance of work other than instruction and organized research.
Professional Development/Public Service (UW external) Non-research related instruction, including conferences & workshops, where primary purpose is training & development of non-UW students & personnel.

Examples:

  • Conference, workshops & symposiums with primary audience of non-UW students/staff including faculty
  • Fellowships for public services/outreach activities
  • Curriculum development for non-UW students & faculty for “training courses”.
  • NIH R13 Conference grants with primary audience of non-UW faculty & students
  • Professional development
Construction Construction of new buildings or the modernization of, or completion of space in existing buildings.

Examples:

  • NIH C06 Research Facilities Construction Grants,
  • Includes expansion, new construction, or activities that would change the “footprint” of an existing facility
Equipment An article of tangible nonexpendable personal property that has a useful life of more than 1 year and an acquisition cost per unit that equals or exceeds $5,000 or the capitalization threshold established by the organization, whichever is less.

Examples:

  • NSF MRI Awards
  • NIH S10 Awards
Clinical Trial, Non-Federal A clinical trial is a human subjects research study, 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.

Includes: Industry-Sponsored Clinical Trials

IPA/JPA/Staff Assignment Inter-personnel Agreements, Joint Personnel Agreements and Staff Assignments in which employees work on site at another entity and UW is reimbursed for the salary and associated expenses.

Examples:

  • IPA Agreements with VA or other federal agencies
  • Staff assignments with FHCRC, SCRI, and Group Health
Other Sponsored Activity (OSA) Sponsored programs and projects which involve the performance of work other than instruction and organized research and not otherwise specified above as a sub-category under the Major Function of OSA.

Examples:

  • Studies involving only the collection of data for entry into a registry
  • Funding for clinical care activities such as treating patients in rural communities
  • Awards to develop programs to integrate clinical and preventative health care services, research, community outreach and professional education and training
  • Curriculum development (including software) for early childhood, compulsory, and higher education.
  • Sponsorship of museums, arts, dance, music programs

If organized research has a component of instruction or other sponsored activity, the rate for organized research shall be applied to the entire project.

Questions on how to characterize sponsored activity? Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Questions on how activities are allocated to facilities and space? Contact Management Accounting and Analysis.

Locations of Activity

Sponsored projects fund organized research, instructional activity and other sponsored activity. In addition, the projects can take place in a variety of locations. The University of Washington has negotiated separate F&A rates for several locations. These rates should be used for projects that occur in these specific locations.

To determine whether the off-campus F&A rate applies, follow these steps:

  1. Determine if the project occurs in leased space. If so, determine whether the sponsor will directly pay for the rental cost of the facility. If the answer is “yes”, the project is considered off-campus and the off-campus rate is used, regardless of the nature or location of the scope of work/project. If departmental funds are used to pay for rent, the on-campus rate is used.*Note: Seattle Cancer Care Alliance (SCCA) is considered an “off-campus” location.
  2. Determine if any part of the project will be carried out away from the University over an uninterrupted period of time in excess of 30 days. Examples include field work at a research site, participation in delivery of health services at an international clinic, or a project carried out in facilities provided at no cost by a non-University organization. In all cases, the period of time away from the University must exceed 30 days, without travel back and forth. This portion of the project is considered off-campus. See Activity at Two or More Locations guidance for more information.

To determine the F&A rate to use for projects or portion of projects in which the off-campus F&A rate does not apply, follow these steps:

  1. Determine the nature of the work to be done (Organized Research, Instruction, or Other Sponsored Activity). For more information on the nature of the work, see Types of Institutional Activity.
  2. Instruction activity uses an F&A rate of 53% and Other Sponsored Activity uses an F&A rate of 37%.
  3. For Organized Research projects, the location of the project and administrative home determines the F&A rate to use.
    1. On-campus includes all organized research located at the Seattle, Bothell, and Tacoma campuses, Harborview Medical Center, and Friday Harbor Labs. The on-campus organized research rate should be used.
    2. South Lake Union includes research located at the Rosen, Brotman, SLU II A, B, and C buildings, and 1616 Eastlake. The South Lake Union organized research rate should be used.
    3. If the administrative unit responsible for a project is the Applied Physics Lab, Regional Primate Center, or Research Vessels, those respective rates should be used for that research, irrespective of the actual location of the research.

    If Organized Research has a component of Instruction or Other Sponsored Activity, the rate for Organized Research shall be applied to the entire project.

If the project will take place at two or more locations, a split rate may be used in some cases. Please review Activity at Two or More Locations for more guidance.

Questions on space inventory and use? Contact Management Accounting and Analysis.

Questions on use of on-campus versus off-campus F&A rates? Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Activity at Two or More Locations

When a project is supported by a single grant or contract and is conducted at two or more physical locations, the following principles should be observed for determining the appropriate F&A rate:

  1. When the total annual amount of the grant or contract direct cost is less than $250,000 in any given year, a single F&A cost rate will be applied for that year. This rate will be the one currently applicable to the location where the preponderance (more than 50%) of project University salaries is located.
  2. When the total annual amount of the grant or contract direct costs is $250,000 or more in any given year, the appropriate rate for each location will be applied using one of the following rules:
    1. Apply the F&A rate corresponding to the location to the modified total direct costs (MTDC) specifically assigned to a respective location; OR
    2. If it is not possible to specifically identify and assign costs by location, the appropriate F&A rate for each location will be applied to total project costs in the same ratio as direct University salary costs anticipated at each location during the period. As expenditures are made, the costs incurred should be assigned to the appropriate location for correct project billing or accounting. Note that under this methodology, there is still an expectation that anticipated subcontract administration can be identified and associated with a specific location, and therefore, subcontract costs that will be charged University F&A should be included in the base of that location where the subcontract is primarily administered. For example, a project that uses the on-campus rate and the off-campus rate should charge the on-campus rate to the first $25,000 of the subaward if the majority of the subaward administration (including receipt of LOI, incorporation into proposal documents, routing of eGC1, collection of invoices, confirmation of costs, collecting subaward reports, integration of reports into UW reports to sponsor, etc) will be administered by staff located at the on-campus location.
  3. If any part of the project will be carried out by the Applied Physics Laboratory (APL), that portion of the project costs must use the applicable F&A rate for APL, regardless of the total annual amount of the award. The current APL F&A rate is available on the Table of Established F&A Rates and Base Types for the University of Washington and consultation with APL prior to budget calculation of the APL component is recommended, in order to accurately calculate and incorporate the APL Direct Cost Rate.

For awards that qualify for multiple rates, after the award is made to the University, Grant and Contract Accounting (GCA) will establish two separate budget numbers for the award – one for each location. The larger of the two budgets will determine which is the parent budget. The academic department(s) responsible for post-award management of the award should ensure appropriate costs are recorded on each budget based on where those expenses take place.

Examples:

Example 1: When the direct costs will be less than $250,000 each year of the project, the location of the preponderance of University salaries is used to determine the applicable F&A rate (methodology in 1, above)

A researcher proposes a two year project in which the first year the University personnel consist of the PI and biostatistician, whose project activity is on-campus and one University Co-Investigator at an off-campus location. During the second year, the project consists of the PI and the Co-Investigator, whose activity is on-campus, and three consultants who are paid a fee at an off-campus location.

YEAR 1 On-Campus Off-Campus Total
Salaries (70% on-campus & 30% off-campus) $105,000 $45,000 $150,000
Supplies $80,000 $80,000
Total Direct Costs $105,000 $125,000 $230,000
MTDC $105,000 $125,000 $230,000
F&A Costs (54.0% on-campus) applied to MTDC $56,700 $67,500 $124,200
Total Costs $161,700 $192,500 $354,200

Note the preponderance of University salaries is used to determine which F&A rate to use, not the location with the highest amount of total direct costs.

YEAR 2 On-Campus Off-Campus Total
Salaries (100% on-campus) $105,000 $105,000
Consultants (off-campus) $120,000 $120,000
Supplies $10,000 $10,000
Total Direct Costs $105,000 $130,000 $235,000
MTDC $105,000 $130,000 $235,000
F&A Costs (54.0% on-campus) applied to MTDC $56,700 $70,200 $126,900
Total Costs $161,700 $200,200 $361,900

Note the preponderance of University salaries is used to determine which F&A rate to use, even when consultant costs exceed the dollar amount of salaries.

Example 2: When the direct costs exceed $250,000 and MTDC cannot be specifically assigned to respective locations, University salary cost allocation is used as the basis to split rates (methodology in 2.b, above)

A researcher proposes a one year project consisting of $300,000 direct costs (University salaries of $150,000, other MTDC categories of $100,000 and a subcontract for $50,000) with 70% of the salaries on-campus and 30% off-campus. The subcontract is associated with on-campus project work and is administered on-campus. The F&A costs included in the proposal are calculated as follows:

On-Campus Off-Campus Total
Salaries (70% on-campus & 30% off-campus) $105,000 $45,000 $150,000
Supplies, Materials (70% on-campus & 30% off-campus) $70,000 $30,000 $100,000
Subcontract $50,000 $50,000
Total Direct Costs $225,000 $75,000 $300,000
MTDC $200,000 $75,000 $275,000
F&A Costs (54.0% on-campus and 26% off-campus) applied to MTDC $108,000 $19,500 $127,500
Total Costs $333,000 $94,500 $427,500

Example 3: When the direct costs will be less than $250,000 in the first year of a multi-year project but more than $250,000 in the second year, then both methodology 1 and 2.a above will apply. In Year 2, the department has determined that specific costs can be assigned to specific locations.

YEAR 1 On-Campus Off-Campus Total
Salaries (70% on-campus & 30% off-campus) $105,000 $45,000 $150,000
Supplies $80,000 $80,000
Total Direct Costs $105,000 $125,000 $230,000
F&A Costs (54.0% on-campus) applied to MTDC $56,700 $67,500 $124,200
Total Costs $161,700 $192,500 $354,200
YEAR 2 On-Campus Off-Campus Total
Salaries $105,000 $50,000 $155,000
Supplies $120,000 $120,000
Travel $10,000 $10,000
Equipment $50,000 $50,000
Total Direct Costs $165,000 $170,000 $335,000
MTDC $115,000 $170,000 $285,000
F&A Costs (54.0% on-campus and 26% off-campus) applied to MTDC $62,100 $44,200 $106,300
Total Costs $227,100 $214,200 $441,300

Questions on how to split rates in a sponsored project proposal? Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Questions on how to set up sub-budgets? Contact Grant and Contract Accounting at (206) 543-8454 or gcahelp@uw.edu.

Base Calculation

The Facilities and Administrative (F&A) rate is applied to the base amount of the project. Federal Uniform Guidance states that F&A costs shall be determined on the basis of modified total direct costs (MTDC) for all applicable sponsored agreements. Modified total direct costs is defined as 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 (including trainee stipends) as well as the portion of each subaward (subcontract) in excess of $25,000 shall be excluded from modified total direct costs.

From time to time, a different base type may apply if the Sponsor program announcement or policy requires a different base type established for the program. Examples of other base types include:

  • Salaries & Wages (S&W): Direct Salaries and wages including vacation, holiday and sick pay and other paid absences but excluding other fringe benefits.
  • Total Direct Costs (TDC): All direct costs of the project.

In the absence of a non-federal sponsor’s policy on base type for the project, the TDC base type will be used.

Questions on the application of F&A rates during the life of a sponsored project? Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Projects with Washington State Governmental Agencies

The Revised Code of Washington allows F&A costs on awards made to the University by Washington State agencies. The applicable F&A rates on awards from the State of Washington should apply in accordance with the University’s federally negotiated F&A rates. Provision for full F&A cost recovery should be included in sponsored program proposals to Washington State agencies, except where F&A cost recovery is limited or excluded by statute or interagency agreement.

Waivers to full F&A recovery must be approved by the Director of Office of Sponsored Programs.

Questions on the application of F&A rates during the life of a sponsored project? Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Subawards and F&A Rates

Outgoing Subawards

When a UW Principal Investigator (PI) sees a need or opportunity to include a subrecipient on an upcoming sponsored program, he/she contacts the proposed subrecipient and requests a formal proposal.

The subrecipient then submits a proposal directly to the UW PI including a budget, budget justification, scope of work, and letter of commitment signed by an authorized representative of the subawardee. If the originating sponsor (prime sponsor to UW) has instituted a published policy that caps the F&A rate it will award, the University will in turn flow down that cap to the subrecipient. A subrecipient may not request an F&A rate that exceeds this cap in its budget to the University.

The PI then incorporates this into his/her proposal. Each outgoing subaward anticipated in a UW budget will have UW F&A charged on the first $25,000 of the subaward for the competing segment, when the base type is Modified Total Direct Costs (MTDC).

Incoming Subawards

When preparing a budget to a sponsor in which the originating (prime) sponsor imposes an F&A cap, calculate the UW budget using the cap, and include the F&A cap policy in the eGC1, for reviewers’ reference. If no cap is imposed by the prime sponsor, the UW budget must include F&A at the full negotiated rate applicable to the project.

In all cases, an F&A cap will be allowed only when it meets the stated exceptions in GIM 13. If the lower F&A rate does not meet these exceptions, an F&A waiver request is required.

Questions on the application of F&A rates during the life of a sponsored project? Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Exceptions to University Policy on F&A Rates

The University of Washington (University) charges F&A costs to all externally funded sponsored projects. Unless a special case applies or an approved waiver been granted as outlined below, F&A costs will be based on the F&A rate agreement approved by HHS-DCA. The University may charge higher rates for industry sponsored research and development projects. In addition, the University does not charge F&A rates to non-clinical industry sponsors that are lower than those applied to federally sponsored programs.

Procedure for Obtaining Approval of All Other F&A Waivers

The Principal Investigator completes and signs an F&A Waiver Request form, obtains required signatures, and routes the F&A waiver form as an attachment to the eGC-1, along with the proposal, to OSP. The OSP Reviewer will provide the F&A waiver form to the Director, Office of Sponsored Programs, or his or her designee, for review. The proposal will be submitted to the sponsoring agency with the F&A rate approved by OSP. If the F&A rate approved by the OSP differs from that in the prepared budget in the proposal, the Principal Investigator is responsible for providing a revised budget to OSP for review and submission with the proposal.

In rare cases, unforeseen circumstances may prevent a Principal Investigator from requesting an F&A waiver before a proposal is submitted. In that case, OSP will review an F&A waiver request after time of proposal submission and after the F&A Waiver Request form is provided to the appropriate OSP Reviewer.

Questions on the application of F&A rates during the life of a sponsored project? Contact the Office of Sponsored Programs, (206) 543-4043 or osp@uw.edu.

Responsibilities

Director, Office of Sponsored Programs

  • Evaluates F&A Waiver Requests and makes the final decision as to approval/denial.
  • Delegates authority to approve/deny F&A waivers within OSP, per signature authority delegation.
  • Reviews policy and underlying procedures and guidance on a periodic basis and in response to F&A rate changes or federal regulatory changes.

Dean, Director, Unit Head

  • Establishes effective processes and controls to ensure compliance with this policy.
  • Communicates these practices to all responsible employees within the College, School and departments.

Department Chair

  • Establishes effective processes and controls to ensure compliance with this policy.
  • Communicates these practices to all responsible employees within the department.

Principal Investigators

  • Prepares proposal budgets and justifies proposed expenses.
  • Determines whether a request to waive F&A costs should be made, and when such requests are appropriate, prepares the F&A Waiver Request and forwards to the Director, Office of Sponsored Programs, for review, with Department Chair and School/College Dean approval.
  • Adjusts the proposal budget as needed to accommodate the approved rate waiver or to charge full applicable F&A costs if an F&A waiver approval cannot be granted by the sponsor’s deadline.
  • Ensures the appropriateness of all charges on sponsored projects.
  • Ensures the consistent application of direct costing practices to federally sponsored projects for which he/she is the PI, as set out in GIM 23.

Office of Sponsored Programs

  • Assists in interpretation of federal guidance, such as the Uniform Guidance.
  • Develops and maintain policies and procedures in accordance with the regulations.
  • Maintains record of sponsored project proposal and associated sponsors’ published F&A policy documents.
  • Creates funding action when new sponsored projects are established, using the applicable F&A rate awarded to the University.
  • Communicates with Sponsor if there are questions about the F&A rate or base applicability to a particular project.

Unit Administrator/Fiscal Lead

  • Assists principal investigators in preparing proposal budgets, justifying expenses, charging costs and tracking expenses.
  • Reviews sponsored project proposals for justification of direct costs requested, especially when costs normally charged as F&A costs are proposed as direct costs.
  • In conjunction with principal investigators, maintains financial records for reviews by internal or external auditors.

Grant and Contract Accounting

  • Establishes sponsored program budget numbers based on funding actions from OSP
  • Maintains system for charging UW F&A on sponsored program budgets, consistent with the UW F&A rate agreement and the F&A information provided on the funding action or other administrative action from OSP
  • Maintains list of object codes that are excluded from base type codes in the financial system

Management Accounting and Analysis

  • Allocates costs to different University activities, based on data collected through surveys and other University sources
  • Reviews and prepares F&A rate proposal
  • Negotiates F&A rate agreement with HHS-DCA

Vice Provost for Research

  • Approves or denies F&A Waiver Requests that are strategic in nature and notifies investigator, department head, academic research associate deans, and Director, Office of Sponsored Programs, consulting with others as needed.
  • Considers any appeal by a PI on decision made by the Director, Office of Sponsored Programs on an F&A waiver request.

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
Equipment is the tangible nonexpendable personal property having a useful life of more than one year, and an acquisition cost of $5000 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 F&A Agreement includes 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

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. GIM 7

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.

Subject Document
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

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

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.