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Facilities and Administration Costs (F&A Costs), previously known as Indirect Costs, are the real costs associated with the administration of sponsored project activities at UND. F&A Costs are not based on what it costs to administer or house a specific sponsored project, but rather what it costs the University to administer and house all of its sponsored project activities.
F&A Costs are those less visible costs related to the maintenance and operation of the university's facilities and services, such as administration (purchasing, accounting), buildings (lab and office space), utilities (electricity, heating, air conditioning, and water), and so forth.
F&A Costs are precisely calculated, audited, and negotiated between the University and the US Department of Health & Human Services every few years. The list below shows the current On Campus Facilities & Administrative Cost rates for the University of North Dakota.
Current on campus F&A rates are:
- Research = 38%
- Other Sponsored Programs = 36.2%
- Instructional = 46%
Starting 7/1/2014 the F&A rates change to:
- Research = 38.5% 7/1/2014 through 6/30/2016
- Research = 39% 7/1/2016 and beyond
- Other Sponsored Programs = 35.6%
- Instructional = 43.9%
Which F&A Cost Rate Do I Use?
The University of North Dakota has negotiated with DHHS the use of five different F&A Rates. These rates are research, instruction, other sponsored projects, EERC, and HNRC. At the SMHS we never use the EERC or HNRC rates, as these rates are for the Energy & Environmental Research Center and the Human Nutrition Research Center. But we do use the other three rates. The use of these rates depends upon the activity proposed. In other words, if you are proposing a research project, you need to use the research rate.
Here is an explanation of the different activities:
Research and scholarship activities include the rigorous inquiry, experiment or investigation to increase the scholarly understanding of the involved discipline. Organized research activities are funded by both external sponsors (Sponsored Research) and by UND (University Research). Together, these categories comprise the Organized Research distribution base, used to calculate the Research F&A (Indirect Cost) rate.
Research activities are properly classified as Sponsored Research if the activity is sponsored (funded) by an external organization, i.e. a federal, state or private organization or agency. Examples of sponsored research include:
1. awards to faculty to support research activities
2. external Faculty "Career Awards" to support the research efforts of the faculty
3. external funding to maintain facilities or equipment
4. operation of a center or facility which will be used for research
5. external support for the writing of books, when the purpose of the writing
is to publish research results
Research activity is properly classified as University Research if the activity is supported by either of the following:
1. Funding that is derived from UND institutional funds (e.g. gifts, endowment income, interest income, technology licensing income, operating budget) through a competitive application and award process, and where the proposed activity is characterized by the same factors which generally distinguish sponsored projects
2. Cost sharing expenditures which are committed to be borne by UND rather than by the sponsor.
Research supported by an award from the Research Development & Complaince Office is an example of University Research.
- Sponsored Research
- Other Sponsored Projects
Other Sponsored Projects are defined as projects funded by sponsors in which project activities involve the performance of work other than Sponsored Instruction or Sponsored Research. Since most projects in this category do not directly involve students and gain little, if any benefit from libraries, the F&A (Indirect Cost) rate applicable to Other Sponsored Projects is less than the rate for Research or Instruction.
Examples of other sponsored projects include:
- Travel grants
- Support for conferences or seminars
- Support for University public events
- Support for student participation in community service projects which do not result in academic credit
- Support for projects pertaining to library collections, acquisitions, bibliographies or cataloging
- Programs to enhance institutional resources, including Data Center expansion, computer enhancements, websites, etc.
Sponsored Instruction is defined as teaching and training activities at UND funded by grants and contracts from federal or non-federal sponsors. Sponsored Instruction includes agreements which support curriculum development as well as all types of teaching/training activities, whether offered for credit toward a degree or certificate, on a non-credit basis, or through regular academic departments or by separate divisions, summer school or external division.
Examples of sponsored instruction include:
- any project for which the purpose is to instruct any student at any location; recipients of this instruction may be UND students or staff, teachers or students in elementary or secondary schools, or the general public
- curriculum development projects at any level, including projects which involve evaluation of curriculum or teaching methods; such evaluation may be considered "research" only when the preponderance of activity is data collection, evaluation and reporting
- projects which involve UND students in community service activities for which they are receiving academic credit
- activities funded by awards to departments or schools for the support of students
- dissertation work funded by grants, including grants for travel in relation to a dissertation
- Upward Bound Program, bringing local students on campus for classes
- general support for the writing of textbooks or reference books, video or software to be used as instructional materials
This rate is only applicable to sponsored projects at the Energy and Environmental Research Center located on campus.
This rate is only applicable to sponsored projects at the Human Nutrition Research Center located on campus.
Should I Use the On Campus or Off Campus Rates?
On-campus activity is defined as that activity performed by University employees on the campus (or campuses) of UND. The University's operation and maintenance facilities are used for on-campus activities. Most activity falls in this category.
Off-campus activity is defined as that activity performed by University employees at locations other than the main campus and not using the University's operation and maintenance facilities.
If your project includes short term (less than one month's duration) travel by employees to an off-campus site where office space is maintained on campus in their absence, that project should be considered on-campus activity for the purposes of applying the F&A Rate. Travel in excess of one month's duration will be reviewed and classified on-campus or off-campus on a case by case basis.
Activity performed by other than University employees through contractual arrangements is normally considered on campus with only the first $25,000 subject to the on-campus indirect cost rate.
How Do I Calculate F&A Cost?
Facilities & Administrative Costs are calculated by multiplying the F&A Cost Rate by the Modified Total Direct Costs (MTDC) of your project. Modified Total Direct Costs include all direct costs except major equipment $5,000 and over per piece, capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, scholarships/fellowships, as well as the portion of each subcontract in excess of $25,000.
What If the Sponsor Limits the F&A Cost Rate?
There are instances when the sponsor has a limitation on the amount of F&A Costs that can be recovered. This limitation is usually in the form of a percentage. To the extent that the sponsor has a policy in place which limits the F&A Cost, and this policy is included with the proposal at the time of routing, the University accepts the limitation on F&A Cost recovery. But keep in mind that the lower the amount of F&A Costs shown in the proposal, the less F&A Cost Return the department will receive.
What If I Want to Waive the F&A Costs on My Proposal?
It is the policy of the University of North Dakota to recover full Facilities & Administration Costs as defined by the applicable federally negotiated rate agreement with the US Department of Health & Human Services (DHHS). Because of this policy, a waiver of the F&A Costs requires multiple approvals from within the University. Please contact Grants Management for more information.