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F&A RATES & COSTS

What are Facilities and Administrative (F&A) Rates and Costs?

F&A Rates
 

The F&A rate is the mechanism used to reimburse the UW for the infrastructure support costs associated with sponsored research and other sponsored projects. The F&A rate is essentially an overhead rate. It is calculated as a percentage of overhead associated with, and allocable to, sponsored research and other activities, divided by the direct costs of sponsored research and other activities. To collect F&A, the UW adds the F&A rate to invoices or other billing instruments submitted to sponsors.

F&A Costs
F&A costs are defined in 2 CFR Appendix III to Part 200 as costs that are "incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity." F&A costs are sometimes referred to as indirect costs. Examples of F&A costs include:

  • Depreciation and interest costs associated with the Phronetik's physical laboratory

  • Operating and maintenance costs such as utility costs, security costs, and custodial costs

  • Common administrative functions such as payroll and purchasing

 

Because it is impractical to account separately for such costs, F&A costs are normally not charged directly to sponsored awards.

Federal Regulations on Direct Billig of F&A Costs

Federal regulations (2 CFR 200.413 (c)) allow for direct billing of F&A costs on federal Awards under specific circumstances. Direct billing may be allowable when ALL the following conditions are met:

1. Individual costs can be identified and assigned to the Award.
 

The cost must be easily identified and recorded.

Examples:

Good: A large mailing where the cost of supplies and postage can be identified and recorded as supporting a single Award.

Not Good: The use of staples which would be very time consuming (if not impossible) and yield very little benefit.

 

2. Direct billing of F&A costs is explicitly identified in the proposal budget or has the prior written approval of the federal Sponsor.
 

Costs should be clearly identified and noted as F&A costs being direct billed in the proposal budget and budget notes. If the proposal is fully funded by the federal Sponsor, this identification serves as Sponsor approval.

If it is determined during implementation of the Award that an F&A cost needs to be direct billed, written Sponsor approval must be obtained prior to the cost being charged to the Award. Written approval should include identification of the cost and the rationale for its direct billing to the Award. A copy of the Sponsor’s written approval must be retained on file.

If the Award does not require submission of a budget AND the agency has waived prior approval for direct billing of F&A costs, Phronetik OSR will document that direct billed F&A costs are integral to the Award. Phronetik OSR is responsible for maintaining this required documentation.

3. The costs are not also recovered as indirect costs.
 

Phronetik's calculation of its F&A rates takes into account direct billing of some F&A costs. Therefore, the OSR may not need to be concerned with this requirement as long as they meet the three other requirements listed here.

4. Administrative or clerical activities are integral to the Award.
 

A cost is integral to an Award if it meets either of the following criteria:

 

  • The objectives of the Award cannot be achieved without the specific cost.
     

  • The Award requires a disproportionate amount of the cost compared to other activities or Awards.
     

Examples of Activities That May Be Direct Billed
 

The following are examples of administrative/clerical activities that could be considered integral to an Award and direct billed to that Award:

  • Research data gathering

  • Research data cleaning

  • Laboratory technician activities

  • Conducting computer research

  • Conducting telephone surveys

  • Research training

  • Programmatic project effort

  • Tabulating research results

  • Database maintenance

  • Preparing IRB or IACCU protocols

  • Preparing progress reports

  • Computer programming

  • Clinical and patient activities such as scheduling patient visits, processing payments, and interviewing patients

  • Writing project manuscripts for publication

  • Library searches

  • Organizing a conference

  • Making travel arrangements for a large number of participants

  • Organizing large datasets

  • Managing complex projects with multiple sites, especially if there are multiple subcontracts


Examples of Activities That Are Typically NOT Direct Billed


The following are examples of routine administrative/clerical activities that would typically not be direct billed to an Award:

 

  • General departmental administration

  • Award proposal development and submission

  • Personnel, payroll, and human resources (HR) activities

  • Accounting and budgeting activities

  • Financial monitoring

  • Processing vouchers and payments

  • Administrative data entry

  • Newsletter/brochure preparation

  • Processing and tracking routine purchase orders

  • Maintaining departmental databases

  • General reception activities


Non-Salary Costs 


The following are examples of non-salary costs that are normally F&A costs and should not be budgeted or charged to Awards as direct costs:

  • Basic telephone equipment and service

  • Cell phones, pagers, and related services

  • Routine postage and mail costs

  • Routine copying and printing

  • Repairs and maintenance for state or institution-supported space in Phronetik-owned buildings or facilities

  • Office supplies

  • Memberships in technical and professional organizations

  • Subscriptions to periodicals

  • Equipment depreciation

  • Office space usage

  • Phronetik Technology Recharge Fee


Documentation


The following documentation should be retained if Phronetik OSR direct bills an F&A cost to an Award

  • If the direct billed F&A cost was identified in the proposal, retain a copy of the proposal budget and budget notes.

  • If Sponsor approval was obtained post-Award, retain a copy of the request for approval and the Sponsor’s written approval.

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