F&A Rates

Use the File Finder tool to locate documents related to proposal development such as forms and official policies and procedures.

What are facilities and administrative (F&A) rates?

Facilities and administrative (F&A) rates are the mechanisms used to reimburse the university for the infrastructure support costs, i.e. F&A costs, associated with sponsored research and other sponsored agreements. F&A rates are essentially overhead rates, calculated as a percentage of the direct costs of sponsored projects. These are actual costs to the university and directly support sponsored projects being performed by Georgia State University. Sometimes F&A rates are referred to as indirect cost rates.

Current Rates FY15 F&A/Indirect Cost Rates

Project Type On- Campus Off-Campus
Research 48.0% 26.0%
Instruction 48.6% 26.0%
Public Service 41.6% 26.0%

FY14 F&A/Indirect Cost Rates

Project Type On- Campus Off-Campus
Research 48.0% 26.0%
Instruction 48.6% 26.0%
Public Service 41.6% 26.0%

FY13 F&A/Indirect Cost Rates

Project Type On- Campus Off-Campus
Research 47.5% 26.0%
Instruction 48.6% 26.0%
Public Service 41.6% 26.0%

FY12 F&A/Indirect Cost Rates

Project Type On- Campus Off-Campus
Research 44.5% 26.0%
Instruction 48.6% 26.0%
Public Service 33.8% 23.7%

F&A/Indirect cost rates are based on Modified Total Direct Costs (MTDC), which is the total direct cost less equipment over $5,000, patient care costs, participant support costs, alterations/renovations, and rental of off-campus space and subcontract expenses in excess of $25,000 for each subcontract, student stipends and tuition.

Off-Campus Definition: For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s) the off campus rate applies. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project.

What are facilities and administrative (F&A) costs?

F&A costs are defined in OMB Circular A-21 as 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 costs are sometimes referred to as indirect costs. Examples of F&A costs include:

  • Depreciation and interest costs associated with the University’s physical plant
  • Operating and maintenance costs such as utility costs, security costs, and custodial costs
  • Common administrative functions such as payroll and purchasing
  • Sponsored project administration such as Research Financial Services

Because it is impractical to account separately for such costs, F&A costs are normally not charged as direct costs to sponsored projects.

How are F&A rates calculated?

F&A Rates are developed under the requirements of the U.S. Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions. The rates are calculated according to the F&A Cost Rate Agreement for Georgia State University and negotiated with our cognizant federal audit agency, the Department of Health and Human Services (DHHS), Division of Cost Allocation (DCA), Mid-Atlantic region. The following rates are negotiated:

  • Organized Research (On-Campus)
  • Organized Research (Off-Campus)
  • Instruction (On-Campus)
  • Instruction (Off-Campus)
  • Other Sponsored Activity, i.e. Public Service (On-Campus)
  • Other Sponsored Activity, i.e. Public Service (Off-Campus)

All F&A costs within the institution are assigned to nine cost pools related to primary functions. Then a portion from each cost pool is attributed to the research enterprise according to guidelines provided in Circular A-21. Totaling the portions of each cost pool allocated to research yields the University’s total F&A costs (TFAC) attributable to sponsored research. The TFAC total is then converted into the F&A rate by dividing it by “Modified Total Direct Costs” (MTDC).

MTDC includes the total direct costs of a sponsored project less the cost of equipment over $5,000, capital expenditures, alterations/renovations, space rental costs, student stipends, tuition, scholarships and fellowships, participant support costs, and the portion of each subaward/subcontract in excess of $25,000 within a competing segment of an award.

Facilities and Administrative Costs = F&A Rates
MTDC Costs Base

Equation used to calculate F&A Rates

How are F&A Rates determined for individual grants and contracts?

The actual F&A rates for most Federally sponsored project awards are the standard rates referred to in the University’s F&A rate agreement. While it should be customary practice to use the University’s negotiated standard F&A rates on all sponsored projects, there are certain exceptions in which not all sponsors can reimburse the University for F&A costs at the negotiated rates. The following are some exceptions:

  • Statutory limitations prevent some Federal sponsors from reimbursing F&A costs at the Federally-negotiated rates.
  • Many non-Federal sponsors such as state, local, and private agencies have policies concerning the reimbursement of F&A costs at less than the Federally-negotiated rates.

The F&A rate applied to individual awards is determined by:

  • Published sponsor policy or,
  • Statutory limitations or,
  • The Office of Sponsored Proposals and Awards (OSPA) during the final negotiation of an award, generally a contract, with a given sponsoring agency

Once an F&A rate is set with a sponsor for an individual award, it remains in effect throughout the entire competitive cycle of the award

How are F&A Rates applied to individual grants and contracts?

F&A costs are charged to individual awards as direct costs are incurred.  The University does not recover F&A costs from sponsors until direct costs are charged to the award. F&A is typically applied to modified total direct costs (MTDC) of awards.  This is referred to as the “F&A Base” and is the same base on which the University calculates and negotiates rates with DCA.

MTDC represents the total direct costs of a sponsored project less the cost of equipment over $5,000, capital expenditures, alterations/renovations, space rental costs, student stipends, tuition, scholarships and fellowships, participant support costs, and the portion of each subaward/subcontract in excess of $25,000 within a competing segment of an award.

Action Amount
A researcher buys supplies on award $100
The actual F&A rate on the award 48%
The university collects the F&A cost associated with that direct cost (supplies) $48.00
The same researcher purchases a piece of equipment for $10,000 No F&A cost would be collected on that particular direct cost (equipment over $5,000)

 

F&A proposal process

Current F&A proposal schedule

The current F&A rates proposal is based upon FY 2009 (July 1, 2008 – June 30, 2009) costs and FY 2010 (July 1, 2009 – June 30, 2010) space data.  Negotiation was completed Feb. 2012, and the new rates are in effect through FY 2014. The next proposal will be based on FY 2013 (July 1, 2012 – June 30, 2013) costs and space data.

F&A proposal process overview

The university’s operating costs for a given base fiscal year are extracted from the central financial accounting system. All current fund expenditures with similar characteristics or purposes are aggregated into common cost categories called “cost pools” and classified as either facilities and administrative (F&A) or direct costs/functions. The pooled costs are then used to calculate rates that are incorporated into a proposal submitted to the Division of Cost Allocation (DCA). The proposal is the basis for negotiations that determine the actual F&A rates to be applied to grants and contracts.

F&A federal cognizant agency

The university negotiates F&A rates with its cognizant federal audit agency, the Department of Health and Human Services (DHHS), Division of Cost Allocation (DCA), Mid-Atlantic region.

Policies & regulations governing F&A rates

The policies and regulations governing the establishment of F&A rates at Georgia State University are set forth in Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions.

F&A space functional use

Space data is one of the most important factors in determining the F&A rate, because facility costs are primarily allocated to University functions, such as instruction and research, according to the functions assigned to University space. It is therefore critical that every department or other unit accurately classify its space according to established functional use definitions.

New F&A rates FAQ

URSA is pleased to announce the successful negotiation of a new 2 year F&A (“indirect cost”) Rate Agreement, dated 2/13/2012 with the Department of Health and Human Services, DHHS. Please note that only the on campus Instruction rate has changed for Fiscal Year 2012, the rate is now 48.6%, all other rates remain the same. The following are the new on campus rates, beginning Fiscal Year 2013 (July 1, 2012): Research 47.5%, Instruction 48.6% and Public Service 41.6%. Beginning Fiscal Year 2014 (July 1, 2013): Research 48%, Instruction 48.6% and Public Service 41.6%. To view the new F&A rate agreement click here. These new rates will improve the reimbursement the University receives for its F&A costs incurred during the performance of work on sponsored research and sponsored agreements. Even with the current rate changes, Georgia State will not be fully recovering the infrastructure support costs (i.e. F&A costs) associated with sponsored projects.

To remain eligible for federal research funding, the University is required periodically to enter into negotiations with a designated federal agency (in Georgia State’s case the Department of Health and Human Services, DHHS) to review the indirect costs associated with sponsored projects and determine the appropriate level of contribution by federal funding agencies to those indirect costs.

F&A (indirect) cost rate agreements streamline the process of awarding, monitoring, and closing out Federal grants and contracts. When a grant or contract officer issues an award to an organization, he/she is unaware of the indirect costs that will be associated with conducting the program. Indirect expenses such as executive administration, payroll, accounting, human resources, building and equipment depreciation, utilities, janitorial and maintenance are difficult to identify directly to grants and contracts. The F&A (indirect) cost rate allows the grant or contract officer to calculate the appropriate allocation of indirect costs associated with any one project by applying the negotiated F&A rate to the respective base used to develop the rate.

Yes, per Georgia State policy, the new rates apply to all externally sponsored projects.

Principal Investigators (PIs) and their staff should begin using the new F&A rates in new, renewal and supplemental (competing continuation) proposals immediately.

The new F&A rates must be used on all new, competitive renewal proposals and supplemental proposals that require budget negotiations from sponsors. Non-competing renewals and non-competing continuation proposals will continue to use the originally approved F&A rates throughout the remainder of their competitive segment. Additionally, proposals for sponsoring agencies that have statutory limitations or policies prohibiting the reimbursement of F&A costs at the Federally-negotiated rates should use the F&A rates set forth by the sponsor.

Competing renewal applications should use the appropriate new F&A rate.

No. Please use the old (originally approved) F&A rate on non-competing renewal applications until the end of the competing segment.

Yes, awards previously approved at the 44.5% rate will be honored for the budget period specified in the award.

Please note if you had an Instruction rate awarded at 50.4% on or after July 1, 2011 that rate will not be honored as per the F&A agreement letter 48.6% is the rate in effect for the period of 7/1/2011 to 6/30/2014, so your project’s F&A rate would be 48.6%.

FOR RESEARCH & PUBLIC SERVICE:

For project budget years that begin prior to July 1, 2012, you should use the appropriate old F&A rate for the competitive segment. For the next competitive segment(s), you should use the appropriate new F&A rate(s). In other words, for project budget years that begin prior to 7/1/2012, you should use 44.5% for Research and 33.8% for Public Service for the entire first budget year. For the next budget year beginning between 7/1/2012 and 6/30/13, you should use 47.5% for Research and 41.6% for Public Service. For any budget years beginning on 7/1/2013 or later, you should use 48% for Research and 41.6% for Public Service.

FOR INSTRUCTION:

For project budget years that begin prior to July 1, 2012, you should use the new Instruction rate of 48.6% as per the F&A agreement letter this is the rate in effect for the period of 7/1/2011 to 6/30/2014.

FOR RESEARCH & PUBLIC SERVICE:

For project budget years that begin on or after July 1, 2012 you should use the appropriate new F&A rate(s). In other words, for project budget years that begin between 7/1/2012 and 6/30/13, you should use 47.5% for Research and 41.6% for Public Service. For project budget years that begin on or after 7/1/2013, you should use 48% for Research and 41.6% for Public Service.

FOR INSTRUCTION:

For project budget years that begin on or after July 1, 2012, you should use 48.6% for Instruction.

FOR RESEARCH AND PUBLIC SERVICE:

No. The new rate agreement period has different rates for the period 7/1/2011 through 6/30/2012, 7/1/2012 through 6/30/13 and 7/1/2013 through 6/30/2014 for Research. For example the new FY 13 Research F&A rate of 47.5% will only be charged for budget periods beginning between 7/1/2012 and 6/30/13 whereas the new FY 14 Research rate of 48% will only be charged for budget periods beginning on or after 7/1/2013. For Public Service the new rate agreement has different rates for the period 7/1/2011 through 6/30/12 and 7/1/2012 through 6/30/2014. For example the new Public Service rates will only be charged for budget periods beginning between 7/1/2012 and 6/30/2014.

FOR INSTRUCTION:

Yes, as per the F&A agreement letter 48.6% is the rate in effect for the period of 7/1/2011 to 6/30/2014.

Rates currently in effect on active awards will be continued until the end of the current competitive segment of the award. A new competitive segment for Research and Public Service beginning on or after July 1, 2012 will be charged the new rate. A new competitive segment for Instruction beginning on or after July 1, 2011 will be charged the new rate.

Federal contracts that are incrementally funded (committed on a yearly basis) will continue with the current rate until the end of the current budget period. A new budget period for Research and Public Service beginning on or after July 1, 2012 will be charged the new rate. A new budget period for Instruction beginning on or after July 1, 2011 will be charged the new rate.

In most cases the project number/speedtype will remain the same, however, there may be special circumstances that need to be evaluated on a case by case basis.

The Federal policy indicates that the award will be made at the currently effective F&A rates.

Yes. Please use the new rates on Federal flow through funds.

FOR RESEARCH AND PUBLIC SERVICE:

F&A rates for subcontracts under federal grants and contracts with start dates prior to July 1, 2012 will remain fixed for the life of the prime agreement (i.e., through the competitive segment of the prime award) at the F&A rate specified in the prime award.

New subcontracts with a start date of July 1, 2012 or later should use the appropriate new F&A rate.

However, if a new subcontract award with a start date of July 1, 2012 or later is received which has been issued at the old F&A rate, the PI or department administrator will need to coordinate with OSPA on procedures for requesting the new DHHS rates from the subcontracting agency. Should the subcontracting agency deny the request, exceptions may be granted on a case-by-case basis by OSPA to allow use of the expired rates.

FOR INSTRUCTION:

F&A rates for subcontracts under federal grants and contracts with start dates prior to July 1, 2011 will remain fixed for the life of the prime agreement (i.e., through the competitive segment of the prime award) at the F&A rate specified in the prime award.

New subcontracts with a start date of July 1, 2011 or later should use the appropriate new F&A rate.

However, if a new subcontract award with a start date of July 1, 2011 or later has been or is received which has been issued at the old F&A rate, the PI or department administrator will need to coordinate with OSPA on procedures for requesting the new lower DHHS rates from the subcontracting agency.

Carry forward of funds will be impacted differently depending if sponsor approval is required or not. 1) When sponsor approval is required, one must look at the issuance date of the carry forward authorization and the start date of the most recent competitive segment of the original award to determine what F&A rate to use. 2) When sponsor approval is not required, one must review if funds are carried over within the same competitive segment or into a new competitive segment to determine what F&A rate to use. Please see New F&A Rates Subcontracts & Carry Forward Rates Implementation Guidance at http://www.gsu.edu/research/58352.html for further information and the details concerning carry forward of funds.

Sponsoring agencies have established application guidelines that specify the inclusion of F&A costs as well as proposal evaluation guidelines that state that panel reviewers are not allowed to include budget information (such as F&A rates) in their impact/priority score. Therefore F&A rates should have no impact on the competitiveness of a proposal.

Other Spons Activities is what Georgia State calls its Public Service F&A rate.

F&A rates implementation guidance

The following implementation guidance applies to all sponsored awards/proposals with the exception of:

  • Awards/proposals in which statutory limitations prevent some Federal sponsors from reimbursing F&A costs at the Federally- negotiated rates
  • Awards/proposals from sponsoring agencies (state, local, and private) that have policies concerning the reimbursement of F&A costs at less than the Federally- negotiated rates
  • Awards/proposals with an approved F&A Wavier

As sponsored awards/proposals such as the ones described above do not use the Federally-negotiated rates to begin with and therefore, the change in F&A rates does not impact those projects.

New, renewal and supplemental proposals

Principal Investigators (PIs) and their staff should begin using the new F&A rates in new, renewal and supplemental (competing continuation) proposals immediately.  For competitive segments (i.e., the period of years, project years, approved by the funding agency at the time of the award, usually three to five years) the rates will be updated when the segment renews.

Important

To ease the transition for proposals that must be submitted to the sponsoring agency within 2 business days of Georgia State’s announcement of the new F&A rates, OSPA staff will temporarily continue to endorse proposals reflecting the old F&A rates; however, all proposals with agency deadline dates over 2 business days from the time of Georgia State’s announcement of the new F&A rates must use the new rates and update all budget documentation.

New, Renewal and Supplemental Proposals Submitted but not Yet Awarded

To ensure that direct costs available to PIs are not adversely impacted by this rate change, awards received prior to the new F&A rates announcement and new, renewal or supplemental proposals submitted to the sponsor prior to the new F&A rates announcement will, when necessary, be accepted using the F&A rate contained in the submitted proposal. OSPA will, however, work with agencies to increase F&A costs to the new rates wherever possible. Whichever F&A rate is finally awarded will subsequently be used throughout the competitive segment of that award.

Existing awards and their non-competitive proposals

All existing awards and their associated non-competitive continuation proposals will continue to use the F&A rate in effect at the time of their initial award (or most recent renewal) throughout the remainder of their competitive segment. This is necessary because governmental regulations require fixed rates over the life of a sponsored agreement and define “life” as each new competitive segment.

Example of F&A rates to use for new, renewal, and supplemental proposals vs. non-competitive proposals

To illustrate, new or competitive renewal on-campus research proposals submitted on or after the announcement of the new rates should use the new Research F&A rate(s), FY 13 47.5% and FY 14 48%. However, non-competitive on-campus research continuations will continue to use the old Research F&A rate of 44.5% included in their most recent new or renewal award until the end of their multi-year project period (i.e. competitive segment). If a renewal proposal is then submitted for that project, it should use the new rates. In most cases proposals for additional funding, for example supplemental proposals, on existing projects will also use the new rates.

F&A Rates subcontracts & carry forward implementation guidance

Subcontracts under federal grants and contracts

For Research and Public Service
F&A rates for subcontracts under federal grants and contracts with start dates prior to July 1, 2012 will remain fixed for the life of the prime agreement (i.e., through the competitive segment of the prime award) at the rate specified in the prime award.

New subcontracts with a start date of July 1, 2012 or later should use the appropriate new F&A rate.

However, if a new subcontract award with a start date of July 1, 2012 or later is received which has been issued at the old F&A rate, the PI or department administrator will need to coordinate with OSPA on procedures for requesting the new DHHS rates from the subcontracting agency. Should the subcontracting agency deny the request, exceptions may be granted on a case-by-case basis by OSPA to allow use of the expired rates.

For Instruction
F&A rates for subcontracts under federal grants and contracts with start dates prior to July 1, 2011 will remain fixed for the life of the prime agreement (i.e., through the competitive segment of the prime award) at the F&A rate specified in the prime award.

New subcontracts with a start date of July 1, 2011 or later should use the appropriate new F&A rate.

However, if a new subcontract award with a start date of July 1, 2011 or later has been or is received which has been issued at the old F&A rate, the PI or department administrator will need to coordinate with OSPA on procedures for requesting the new lower DHHS rates from the subcontracting agency.

Treatment of carry forward of unobligated balances requiring sponsor approval

Sponsors consider carry forward of unobligated balances requiring their approval as new awards. Therefore the F&A rate to be used on these awards are based on the issuance date of the new award/authorization.

Use of old F&A rate

For Research and Public Service carry forward awards with issue dates prior to July 1, 2012, the appropriate old F&A rate will be sustained through the completion of the current competitive segment of the award.

For Instruction carry forward awards with issue dates prior to July 1, 2011, the appropriate old F&A rate will be sustained through the completion of the current competitive segment of the award.

Use of old and new F&A rates

For research and public service carry forward awards with issue dates on or after July 1, 2012 but where the most recent competitive segment of the original award has a start date prior to July 1, 2012, a new speedtype/project number will need to be established to accomplish the proper charging of F&A costs for the carry forward balance.

For instruction carry forward awards with issue dates on or after July 1, 2011 but where the most recent competitive segment of the original award has a start date prior to July 1, 2011, a new speedtype/project number will need to be established to accomplish the proper charging of F&A costs for the carry forward balance.

F&A charges for the carry forward funds will be made at the appropriate new F&A rate whereas, F&A charges to the original awarded funds will be made at the appropriate old F&A rate through the completion of the current competitive segment of the awards.

Use of new F&A rate

For Research and Public Service carry forward awards with issue dates on or after July 1, 2012 and where the most recent competitive segment of the original award has a start date on or after July 1, 2012, the appropriate new F&A rate will be used through the completion of the current competitive segment of the award.

For instruction carry forward awards with issue dates on or after July 1, 2011 and where the most recent competitive segment of the original award has a start date on or after July 1, 2011, the appropriate new F&A rate will be used through the completion of the current competitive segment of the award.

Treatment of automatic carry forward of funds

The automatic carry forward of funds, which do not require sponsor approval, into the next budget period within the same competitive segment will continue to use the F&A rate in effect at the time of the initial award (or most recent renewal) throughout the remainder of their competitive segment.

However automatic carry forward of funds, which do not require sponsor approval, that cross over into a new competitive segment would function as a new award and use the appropriate new F&A rate through the completion of the current competitive segment.