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Office of Accounting
University of Mississippi

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:

FY 2003-2007
On Campus:
Research 44.0%
Instruction 44.0%
Other Sponsored Projects 44.0%
Off Campus:
All Projects 26.0%

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
  • Travel
  • 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.