Facilities & Administrative Costs
OMB Circular A-21 defines facilities & administrative costs as those that are incurred for joint objectives and therefore cannot be identified specifically with a particular project. Examples of these costs are:
- Use of UM space & equipment
- Operation and maintenance expenses
- Library expenses
- General administration (purchasing, human resources, etc.)
- Sponsored projects administration (contracts & grants, office of research)
- Student administration & services
The university charges F&A costs to projects based on predetermined percentages negotiated with the Department of Health & Human Services, our cognizant audit agency. The following rates are negotiated and approved by DHHS:
|Other Sponsored Projects||44.0%|
The off-campus rate will be used when more than 50 percent of the project is performed off campus in facilities not owned by the university.
F&A charges are calculated by applying the appropriate rate to the base, modified total direct costs charged to each project.
Modified Total Direct Costs Include:
- Salaries & Wages
- Fringe Benefits
- Supplies & Services
- Subgrants & Subcontracts up to the first $25,000
Modified Total Direct Costs Exclude:
- Equipment (nonexpendable property costing more than $5,000)
- Tuition Remission
- Rental Costs of Off-site Facilities
- Scholarships & Fellowships
- Portion of Subgrants & Subcontracts over $25,000
The university’s policy is to charge F&A costs to all sponsored projects at the full rate. When situations arise that require a reduced rate or a waiver, the vice chancellor for research should be contacted for approval.
F&A costs should not be considered profit to the university as they represent true costs associated with performing sponsored projects. Recovery of F&A costs is distributed in accordance with polices established by the vice chancellor for research and the vice chancellor for administrative affairs. The majority of F&A recovery is returned to benefit the schools and departments generating the recovery.