Application of F&A Rates to Sponsored Projects Guidance

Facilities and Administrative(F&A) cost rates are applicable to all sponsored projects, i.e. grants, contracts, cooperative agreements, subgrants and subcontracts funded by Federal, state, or private sponsors. The application of these rates allow CDU to recover certain costs (e.g. facilities, utilities, libraries, administration, student services, etc.) associated with externally funded activities that, although they are true costs that are incurred, cannot be identified specifically with a particular project or activity. The federal government determines the rate that is necessary to collect these costs from sponsored awards. Therefore, any reduction in the allowable rate is considered cost sharing, and CDU must recover those costs from other sources.

The first step in determining the proper F&A rate is to read the sponsor program guidelines.  If there is a limit on F&A, the program guidelines or announcement will list the rate that should be used. If the guidelines do not mention F&A or indicate that something other than the applicable federally negotiated rate should be used, the appropriate full rate should be used. The next step in determining the appropriate rate is to establish what type of project you are performing have. OMB Circular A-21 describes the different types of awards – organized research, instruction and training or other sponsored activities.

Organized Research
Organized research is described as all research and development activities that are sponsored by federal and non-federal agencies and organizations. This term includes activities involving the training of individuals in research techniques (commonly called research training) where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.  Research activities include the rigorous inquiry, experiment or investigation to increase the scholarly understanding of the involved discipline.

Examples of sponsored research include:

• Awards to CDU faculty to support research activities
• External funding to maintain facilities or equipment and/or operation of a center facility which will be used for research
• External support for the writing of books, when the purpose of the writing is to publish research results
• Data collection, evaluation, analysis and/or reporting

Instruction and Training
Sponsored instruction is defined as teaching activities at CDU funded by grants and contracts from federal and 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.

Sponsored instruction includes:

• Any project for which the purpose is to instruct any student at any location: recipients of his/her instruction may be CDU student 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. Note that such evaluation may be considered “research” when the preponderance of activity is data collection, evaluation and reporting
• Projects which involve CDU students in community service activities for which they are receiving academic credit
• Activities funded by awards to departments or school for the support of students
• Fellowship support for pre-doctoral and post-doctoral training activities, which may include grants to fund dissertation work and travel in relation to a dissertation
• General support for the writing of textbooks or reference books, video or software to be used as instructional materials.

Other Sponsored Activities
Other Sponsored Activities means programs and projects financed by federal and non-federal agencies and organizations which involve the performance of work other than instruction and organized research. Since most projects in this category do not directly involve students and gain little, if any, benefit from libraries, the F&A rate applicable to other sponsored activities is less than the rate for organized research or sponsored instruction.

Examples of Other Sponsored Activities include:

• Travel grants
• Support for conferences, seminars or workshops
• 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 computer enhancements, etc.
• Health services projects

Off Campus Rate Determination
Next, determine if your project qualifies for an off campus rate. Currently, there are two types of off campus rates applicable to organized research projects conducted in facilities not owned by CDU.  

In order for a project to be considered off campus, the following qualifications must be met:

• The PI will be away from his or her campus facilities (i.e. office and laboratory) for a minimum of three consecutive months; and
• The PI will be performing work in accordance with the statement of work of the sponsored project while at the off campus location.

Off campus rates can only be used relative to the effort of a university employee.  The performance of non-university personnel must be handled via a subaward to another institution or a consulting agreement. Subawards must include full on campus F&A on the first $25,000 of the subaward. Consulting agreements are charged the full on campus F&A rate on the entire amount of the consulting agreement.

Once the project type and location are determined, the proper federally negotiated rate should be applied. Current rates can be found at here.

Federal rates should be used with state and private sponsors, and must be used if CDU will be a subcontractor on a federal prime award. Questions can be directed to the office of Grants and Contracts.