Charging of Facilities and Administrative/Indirect Costs to Sponsored Projects

To assign an item of cost, or a group of items of cost, to one or more sponsored agreements, function (e.g., research or instruction), or subdivision (e.g., college or center). (adapted from Cost Accounting Standards).

"A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship." (from Uniform Guidance 2 CR 200.405).

• Example: An educational institution normally allocates the cost of equipment required to conduct a project directly to the sponsored agreement.

Costs that are (a) necessary and reasonable; (b) allocable to sponsored agreements under the principles and methods outlined in the Uniform Guidance; (c) given consistent treatment through application of those generally accepted accounting principles appropriate to the circumstances; and (d) conform to any limitations or exclusions set forth in 2 CFR 200 or in the sponsored agreement as to types or amounts of cost items. (2 CFR 200.403).

• Example: A piece of equipment required to conduct the study is an allowable cost to the project but entertainment costs are not.

An entity established to support and advance research, education, or public engagement that includes mostly members from the same college. Collegiate centers are not subject to Administrative Procedure: Sharing Indirect Cost Recovery Among Collaborating Collegiate Units/Intercollegiate Centers/University-Wide Centers.

"Those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy." (2 CFR 200.413).

• Example: Travel is normally charged as a direct cost to a project.

F&A costs are "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." Examples include operation and maintenance expenses, and costs incurred for sponsored projects administration. For more detailed information, see Understanding F&A Costs in appendices. (2 CFR 200.414), F&A costs are synonymous with indirect costs.)

See "Facilities and Administrative Costs."

Revenue received by the university when F&A rates are applied to direct costs charged to sponsored projects. This revenue is returned to academic units consistent with the University budget model. Examples are operation and maintenance of buildings and grounds, central administrative expenses, research administration and library costs.

A composite rate applied as a percentage of the sponsored project's direct costs to recover the University's F&A/indirect costs. In business and industry, this is known as “overhead.” The federally negotiated F&A/indirect cost rates for research and other sponsored activities are developed by the University in accordance with 2 CFR 200 and negotiated on behalf of all federal agencies with the Department of Health and Human Services (DHHS). The rate is variable according to the type of project and where it is being conducted. See the F&A Rate Chart in the appendices.

An entity established to support and advance research, education, or public engagement that includes members from different colleges and/or campuses.

An organizational unit within the University that is formed to promote interdisciplinary studies or initiatives. These centers may also be known as consortia, institutes, initiatives, programs, etc. Interdisciplinary centers are not subject to Administrative Procedure: Sharing Indirect Cost Recovery Among Collaborating Collegiate Units/Intercollegiate Centers/University-Wide Centers unless the involved center also qualifies as an intercollegiate or university-wide center.

This document replaced OMB Circulars A-21, A-110, and A-133 in December 2014, and is a set of uniform federal regulations that the University must follow in regards to charging of costs to grants, contracts, and other agreements with educational institutions. Each federal agency implements these regulations in its own policy handbook. The OMB Uniform Guidance is the backbone of agency regulations; the agency cannot impose regulations that are inconsistent with it.

An internal form used to route a proposal for sponsored funding through the process of administrative review and approval.

A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.” (2 CFR 200.404).

An externally funded activity that is governed by specific terms and conditions. Sponsored projects must be separately budgeted and accounted for subject to terms of the sponsoring organization. Sponsored projects may include grants, contracts (including fixed price agreements), and cooperative agreements for research, training, and other public service activities.

Costs that cannot be charged to a project per sponsor guidelines or any other costs incurred by the University that Office of Management and Budget Uniform Guidance specifies cannot be included in the development of the indirect cost rate charged, nor as a direct cost to a Federally sponsored project, nor included in ISO/department recharge rates.

An entity authorized by the President and Executive Vice President to support and advance research, education, or public engagement initiatives aligned with key University strategic priorities.