Facilities & Administrative (Indirect) Cost Policy
The University’s Facilities and Administrative (F&A) rate is negotiated with the U.S. Department of Health and Human Services and reflects the cost of real, auditable expenses incurred in the conduct of research. Included among these costs are depreciation costs of buildings and equipment, maintenance and repairs, janitorial services, utilities, hazardous waste disposal, libraries, and general administrative costs such as sponsored programs administration, departmental administration and general administration (accounting, purchasing, legal services, personnel, and compliance). These costs are “indirect” because they are not easily identified with a specific project and therefore are not included in the “direct” portion of the budget. Such indirect costs support the conduct of research, regardless of the source of funding, and therefore must be applied to all sponsored projects.
It is University of Florida policy that all proposals and agreements for external funding include full F&A costs using UF’s federally negotiated rate and base in effect at time of proposal submission. The University’s official policy is located HERE.
Less than Full F&A Cost Recovery
The University recognizes that some sponsors and programs limit by policy their F&A cost reimbursement. All grants, contracts and agreements will be charged the full F&A rate as negotiated. Exceptions and the process for approval of each are outlined below:
- Established rates for use with various public entities as stated in the UF F&A Rate Chart.
- Industry sponsored clinical trials will be charged 28% on total direct costs (TDC).
- Some nonfederal or government sponsors and programs prescribe F&A rates other than the University’s federally negotiated rate. Examples include many non-federal foundations and some federal programs, such as USDA NIFA and NIH Career Awards. To be acceptable, the published rate must appear in its guidelines (request for proposal, request for application, broad agency announcement, or other published guidelines), or be published on the Sponsor web site, or be confirmed in writing by the Sponsor’s grants office (not a program official.) The F&A rate must apply universally to all proposals, not solely UF’s, submitted for that particular program or that sponsor. The Principal Investigator must furnish evidence of the published rate at the time of application to DSP for institutional endorsement of the proposal. If such documentation cannot be provided, the Principal Investigator will include the full applicable F&A rate in the proposal or request a waiver under the procedures outlined below. Reduced rates do not apply to for-profit entities, which are expected to pay the University’s full applicable F&A rate.
- The award is being transferred to UF from another institution and the UF’s F&A costs under the appropriate federally negotiated F&A rate exceed those provided at the previous host institution. On a case-by-case basis, DSP will review the available budget and F&A rate to ensure that the Principal Investigator is held harmless (e.g., the same amount of direct costs remaining upon departure from the old institution/entity will be made available). Evidence of the remaining budget, including direct and F&A costs, should be provided at the time of the transfer application. Note that any additional reduction in rate (beyond maintaining direct cost equivalency) requires an F&A waiver.
- The project has an approved F&A waiver in place, and any additional funding (e.g., supplement or continuation) provided by the sponsor does not exceed 25% of the original amount anticipated on the award. Funding added to a project above these levels requires its own waiver.
Any reduction of F&A rates under conditions other than those identified above is considered cost sharing and therefore must be approved according to the University’s cost sharing policy (explicit approval required from the College Dean or Unit Director and a Director of the Division of Sponsored Programs). Chair, Dean and DSP review is based on assessment of the compelling nature of the request, the importance of the individual project, the best interests of the college, fairness to other investigators, and the ability of the department or college to financially forego the F&A that would otherwise have been recovered.
Note that failure of the Principal Investigator to submit the proposal via approved institutional channels (e.g., through department, college and DSP) prior to submission to the sponsor is not cause for a waiver. In these cases, the sponsor will be expected to pay the full applicable F&A rate or the department will be responsible for cost-sharing that portion of the F&A the sponsor refuses to pay.
In addition, all parties of the review should be attentive to the proper calculation of F&A costs in the budget. If a proposal includes an error in calculation, the appropriate F&A must still be recovered. Request to the sponsor to appropriately adjust the overall award or reduction in direct costs will be necessary to accommodate any error.
Click here for the University’s current F&A Rates.