Indirect Costs: Facilities and Administrative

Rates for facilities and administrative costs (F&A) are negotiated with N.C. A&T’s cognizant federal agency, the Department of Health and Human Services.

F&A costs consist of operations and maintenance expenses, such as utilities, building maintenance and custodial services; building depreciation and interest associated with the financing of buildings; administrative and supporting services provided by academic departments and other administrative units; and general administration and general expenses such an executive management, accounting, payroll and personnel administration.

The University’s negotiated F&A rates are:

•  On-campus vs. Off–campus: A project is considered to be off-campus when activities are performed in facilities not owned by the University and rent for those facilities is paid and charged to the project. If more than 50% of the work performed under the project is conducted outside of University-owned facilities, the off-campus rate will apply.
• The appropriate negotiated rate should be used for all proposals unless the sponsoring agency’s solicitation mandates a different F&A rate.
• Many Department of Education grants restrict F&A to 8%, and many private foundations limit F&A to 10% to 25% if they allow F&A at all. Some agencies will not pay F&A at all. Always check the program guidelines.

When the full F&A cost recovery is allowed by the sponsor, use these steps to calculate the cost:

• Determine the Modified Total Direct Cost (MTDC) base. Usually the easiest way to do this is to go back through the whole direct cost budget and subtract all the dollar amounts for the excluded cost items.
• MTDC Base includes: Salaries and wages, fringe benefits, travel, materials & supplies, consultants, printing, the first $25,000 of each subcontract and any other cost items not excluded below.
• MTDC Base excludes: Equipment, that portion of each subcontract in excess of $25,000 and the following other cost items: tuition remission, scholarships and fellowships, participant support costs, patient care costs and rental costs for off-campus facilities.

Apply the appropriate F&A rate to the MTDC base. The proper rate is determined by the nature of the sponsored activity (research, instruction or other) and whether the project will be on-campus or off-campus.

• Note: If you submit a continuation or supplemental proposal to an existing award, you must use the F&A rate used in the original award. OMB Circular A-21, section G.7 advises that rates should be fixed for the life of an agreement. An agreement life includes all actions that do not require a new agreement.

Sponsored agreements will not be subject to more than one facilities and administrative cost rate. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project. Similarly, if your project contains components from more than one classification (i.e. Research and Instruction) then only the rate of the most significant component will apply.