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Charging of Facilities and Administrative Costs to Sponsored Projects
Charging of Facilities and Administrative Costs to Sponsored Projects
The policy establishes the campus standards for charging of applicable Facilities and Administrative (F&A) Costs on externally-funded Sponsored Projects based on the classification of the project as Organized Research, Sponsored Instruction, or Other Sponsored Activities.
Frequently Asked Questions
If the reduced rate is a result of a statutory limitation, any F&A above the limitation may be considered unallowable and thus not eligible to be considered cost share. If the campus elects to charge a rate less than the negotiated rate, the difference could be used to meet cost sharing if allowed by the sponsor.
When a reduced F&A rate is approved, the graduate assistant tuition remission rate is normally waived at the discretion of the originating unit. However, the originating unit has the option of requesting the tuition remission if the sponsor does not expressly prohibit this cost. The exception being that tuition remission is not charged to State of Illinois projects that use the 10% or 20% Total Direct Costs (TDC), unless allowed by the state agency.
USDA limits F&A on some NIFA awards to the lesser of 30% of total award (direct plus F&A costs) or the amount that can be recovered using our negotiated rate. Other NIFA awards are similarly capped at 22% of total award. For budgeting purposes, the rate of 30% of total award is equivalent to 42.857% of Total Direct Costs and the rate of 22% of total award is equivalent to 28.205% of Total Direct Costs. Note, in this case Total Direct Costs INCLUDE tuition remission. Details for each NIFA program can be found here. In addition, OSP provides a budget template to assist in determining which rate is appropriate and can be found here.
Normally, we do not assess F&A on Fellowships. However, if a sponsor permits recovery of F&A on fellowship funding, the sponsor-approved rate should be included in the budget.
No, participant support costs are excluded from the Modified Total Direct Cost (MTDC) base and not assessed F&A. Participant Support expenses generally include costs of transportation, per diem, stipends and other related costs for participants or trainees (but not employees) in connection with sponsored conferences, meetings, symposia, training activities and workshops.
Gifts are currently exempted from being charged an institutional F&A assessment. However, please note that some academic units may charge an assessment against gifts.
The F&A rate issued at the time of the award to the transferring institution will be honored. Note the National Science Foundation (NSF) requires the use of our negotiated rate unless otherwise mandated.
The F&A rate used in the proposal budget will be honored upon award if the F&A rate changes prior to award. Once awarded, the F&A rate remains fixed for the life of the award including subsequent supplemental increments of funding to the same award. For this purpose, competing renewals are considered new awards and should use the rate in effect at the time of the competing renewal submission.
The F&A paid by the non-profits, foundations, or charities vary widely. The University is generally accepting of reduced rates on non-profits. If the non-profit does not specify a rate in their proposal solicitation or have a published policy, a rate of 10% Total Direct Costs (TDC) should be applied.
The institutional negotiated rate should be used for foreign sponsors regardless if the funding originates from a foreign government or commercial sponsor.
Approved Industry Affiliate Programs are subject to an F&A rate of 15% Total Direct Costs (TDC).
The applicable institutional negotiated rate should be used on all corporate sponsored projects unless institutional practice dictates otherwise. For instance, support for student competitions and Research Park internships have rates lower than the negotiated rate.
The F&A rate for State of Illinois agencies will depend on the prime source of funds. Principal Investigators or the submitting units are responsible for identifying the source of funding prior to submitting proposals to State of Illinois agencies or entities defined as Illinois municipalities or local governments.
For projects supported entirely with State of Illinois funds, the target F&A rate is 10% of Total Direct Costs (TDC) unless the sponsor specifies higher rates, in which case the higher rate should be used.
For projects supported with combined State of Illinois and federal funds, the rate is 20% of Total Direct Costs (TDC).
For projects administered by Illinois agencies or entities supported entirely by federal funds, the applicable institutional negotiated rate should be used with tuition remission being requested as a direct cost.
Note that there is significant inconsistency in the treatment of indirect costs among the various state agencies. If in doubt as to the proper F&A rate, please contact your Sponsored Programs coordinator for assistance.
A research project typically has the following attributes: a) the work involves original, creative research and is expected to produce new science or technology; b) there is a substantial involvement of the Principal Investigator in defining the statement of work; c) University owns the results of the work.
A testing project typically has the following attributes: a) research methods are pre-existing and of a primary technical nature with no new science or technology being generated; b) sponsor designed protocol with no significant input from the Principal Investigator; c) no analysis of project results; d) sponsor maintains ownership of observational data and results of the testing.
If a project involves work at on-campus and off-campus project sites, a single F&A rate should generally be applied consistent with where the majority of the work is to be performed. The criteria for use of the off-campus rate are as follows:
Performance at the off-campus project site must be on a continuous basis and of sufficient duration, normally a full semester, summer term, or the period of performance of the project; intermittent performance is not sufficient;
The University personnel working or engaged on the project must be physically located at the off-campus project site;
Travel to and from an off-campus project site is considered an off-campus cost. Travel to and from other locations, such as meetings with federal sponsors, is not considered an off-campus cost;
Subaward costs are not a determinant in classifying costs as on-campus or off-campus;
Costs incurred at the off-campus project site may include administrative salaries when administrative support cannot otherwise be reasonably provided, related fringe benefits, supplies, utility costs, rent, local travel, and other similar costs that are treated as direct costs.
If a project is required by the sponsor to separate the components that are conducted on-campus and off-campus, separate fund codes must be established such that the on-campus rate is applied to the work on-campus, and the off-campus rate to the work conducted off-campus.
There are certain circumstances under which the institution may elect to accept a reduced F&A rate. Some examples of these circumstances follows:
Statutory Limitation: Certain federal grant programs such as federal training and fellowship grants may be limited by law as to the amount of F&A allowed to be charged.
Published Sponsor Policy or Program Solicitation Requirement: Some sponsors like non-profits and foundations will limit the F&A rate they are willing to pay. The institution reserves the right to review any published F&A limitation to ensure the limited rate is consistent with our institutional practices for that class of sponsor.
Institutional Practice: The institution has established precedence through institutional practice for accepting a lower rate of F&A for some sponsors.
The approved institutional exceptions are available here.
The basis for our F&A calculation using the applicable negotiated rate is the Modified Total Direct Cost (MTDC). Under MTDC, F&A is not assessed on equipment over $5,000 or more, capital expenditures, tuition remission, rental costs, scholarships and fellowships, participant support costs, and the portion of each subaward/subcontract in excess of $25,000. Our negotiated F&A rates are available here.
The basis for our F&A calculation using a reduced F&A rate is the Total Direct Cost (TDC). Under TDC, F&A is not assessed on tuition remission.