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F&A (Facilities and Administrative) cost rates (also known as overhead or indirect costs) are established by negotiation with the U. S. Department of Health and Human Services and cover a specified period.
These are costs that cannot be uniquely associated with a particular project but which are nonetheless incurred by the university due to the project. They include costs such as departmental accounting and clerical support, network support, equipment depreciation, building and facilities operation and maintenance, library, or sponsored projects administration. These costs are budgeted and charged as a percentage of some of the direct cost elements.
F&A costs should appear as a separate budget category and show the base and percentage used to determine the amount. Oregon State University uses a Modified Total Direct Cost (MTDC) base for charging F&A costs.
Research is the systematic study directed toward fuller knowledge or understanding of the subject studied. Basic research is activity specifically organized to produce outcomes. Applied research utilizes the outcomes or theory in practice; i.e. toward the production of useful materials, devices or systems. This category includes training of individuals in research techniques.
Activities that involve the performance of work other than research fall into this category. Examples are: sponsored instruction and workshops, course development, non-research training activities, public service activities, cooperative extension outreach, health service projects, and community service programs. This category also includes academic support of libraries, educational media services, student services, and others.
The On-Campus rate is applicable to projects or activities that take place in facilities owned or leased by OSU. Included are: Hatfield Marine Science Center (HMSC) including the NOAA building, Cascades Campus, branch Agruculture Experiment Stations, farms and other research faciltiies. The on-campus rate is not used when rent of facilities is directly allocated to the project as an approved direct cost.
The Off-Campus rate is applicable to sponsored projects performed in facilities which are not owned or leased by OSU, or when rent of facilities is directly allocated to the project as an approved direct cost. Where a project occurs both at on-campus and off-campus locations, the budget should be split with the appropriate rate being applied to each portion. OSU has determined that such a split is justified when there is an activity period of 90 or more consecutive days away from the on-campus facilities.
If a split is justified, it will be necessary to provide two separate budgets. Each budget should identify the activities, related costs, and application of the appropriate indirect cost rates for each location. Activities at an off-campus location for less than 90 consecutive days should use the appropriate on-campus rate.
The following locations and buildings qualify to use the off-campus rate in a sponsored project proposal, regardless of the 90-day rule for off-campus activities:
If the sponsor has published rates that restrict recovery to less than OSU's negotiated rates, attach a copy of the sponsor's published rates as appears in their guidelines to the Proposal Transmittal Form and apply the sponsor's rate in your budget.
When the sponsor caps the F&A rate, and they do not specify how the rate is to be applied, OSU policy is to charge the capped rate to total direct costs (rather than modified total direct costs, or MTDC).
If OSU and a sponsoring agency have entered into a master agreement that allows for recovery of less than full F&A Costs, include the Cooperative Agreement number from which the task order or work order is to be written on the face sheet of the proposal and the Proposal Transmittal Form. All conditions of the Master Cooperative Agreement must be met in order to use the F&A associated with that agreement.
Use the State of Oregon Agency rate unless the funds are federal pass-through. If the original source of the funds to the state agency is the federal government, use the appropriate Organized Sponsored Research or All Other Sponsored Research rate.
When the activity contains both State of Oregon funds and federal flow-through funds, the budget should reflect the appropriate F&A rate for each source of funds.
When the activity contains on- and off-campus aspects, the budget should reflect the appropriate F&A rate for each type of activity. Budgets typically break line items into on- and off-campus categories to allow correct applications of the F&A rate.
When the sponsor specifies that F&A cost be based on the total award, the calculation of F&A cost is based on both direct and F&A cost (or the total award cost). For example: 10% of $200,000 total award is $20,000. This means that $180,000 is available for direct costs. The correct F&A rate to apply to total direct costs is 11.11%
When this method of calculating indirect costs is used, continue to use the limitation of assessing indirect cost on only the first $25,000 of a subaward
Always check to confirm that the sponsor's F&A rate is the most restrictive after calculations are done using the sponsor's capped rate and the published OSU rate. Sometimes it may "appear" that the sponsor's rate is more restrictive than OSU's, but when the F&A rate is actually applied, OSU's rate results in less indirect cost. An example would be as follows:
In cases where OSU's appropriate negotiated F&A rate calculates at less than the sponsors allowed rate, OSU's negotiated rate must be used. This occurs most often when the off campus rate applies to a project and the sponsor allows a rate of 20% or more of total direct costs.
If a sponsor allows F&A costs but the PI wants to request a waiver of these costs, a Request for Waiver of F&A Costs form must be submitted to Sponsored Programs with a full copy of the proposal. These requests are reviewed by the Director of Sponsored Programs on a case-by-case basis and are only approved under special circumstances.
All currently awarded projects will continue to have the F&A rate applied under which the award was made. This rate will be used until the award expires. This includes non-competing continuation requests when the continuation year you are requesting funds for was awarded in the original award document.
Example: If the award is from October 15, 2005 through October 14, 2009 at a rate of 41.5% MTDC, the 41.5% MTDC will be used for the life of the award, unless supplemental funding is requested. If supplemental funding is requested or awarded, the new rates must be used.
When you are requesting a continuation, you should add an explanation in the budget justification that states:
"The rate being used on this continuation is 43% as indicated on the original award and as allowed by OMB Circular A-21 Section G.7."
For questions about application of the new rates to future proposals, contact the Office of Sponsored Programs at 7-3437. For questions about rates on existing awards, contact the Office of Post-Award Administration at 7-4711.
When a request is made for supplemental funding, the F&A rate used should be the current rate in effect.
Oregon State University Research Office
308 Kerr Administration Building, Corvallis, OR 97331
Phone 541-737-4933 Fax 541-737-3093
sponsored.programs@oregonstate.edu
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