We are excited to announce that the Department of Health and Human Services (HHS) has approved our new Facilities and Administrative (F&A) agreement for Fiscal Years 2024 through 2028. As you may know, we have been operating under a provisional rate since the start of FY24. This new four-year agreement, which was intended to begin FY24, will be implemented starting July 1, 2025.
Impact to F&A Rates
The F&A rates included in the new agreement for FY24 and FY25 remain the same as our current provisional rates, and we’ll continue using our negotiated rates unless any broad changes are mandated at the federal level. Therefore, as of now, no immediate adjustments are required for current active projects the remainder of FY25.
The new F&A rates are as follows:
| Year | On Campus Rate |
Off Campus Rate |
OSA Rate |
| FY24-25 | 56% | 26% | 43% |
| FY26-27 | 58% | 26% | 35% |
| FY28 | 58.5% | 26% | 35% |
Change in Modified Total Direct Costs (MTDC)
With the new rate agreement, the threshold for excluding subaward costs from the MTDC base has been increased from $25,000 to $50,000. This new threshold was included in the October 2024 updated version of the OMB Guidance for Federal Financial Assistance (2 CFR 200). The new threshold will apply to all new sponsored projects with an effective date of July 1, 2025, or later.
For subawards setup under sponsored projects with an effective date on or after July 1, 2025: the first $50,000 of each subaward will be included in the MTDC calculation, while any amount exceeding $50,000 will be excluded.
For subawards setup under sponsored projects with an effective date prior to July 1, 2025: We continue to adhere to the previous $25,000 threshold.
Please note that our equipment threshold remains unchanged at $5,000. Individual items of equipment with an acquisition cost of $5,000 or more continue to be excluded from the MTDC base.
New Fringe Benefit Rates
We are happy to share that the fringe benefit rates for 2025/2026 have also been approved and will take effect July 1, 2025. The new rates are as follows:
- Full-time-------------------------- 36%
- Limited---------------------------- 21.2%
- Part-time----------------------------3.2%
- GRA----------------------------------4%
Detailed information regarding the new F&A and fringe benefit rates can be found on the following sites:
What do you need to do now?
We encourage all principal investigators, research administrators, and relevant staff to review the rates carefully to ensure accurate budget preparation for future proposals and the management of existing and new awards. Please keep in mind the July 1, 2025, effective date for the new F&A rates and the adjusted subaward threshold.
If you have any questions regarding the new F&A agreement, the MTDC definition adjustment, or the fringe benefit rates, please do not hesitate to contact the office of Sponsored Programs at [email protected].