Indirect (F&A) Costs

  • What is F&A?
    F&A stands for facilities and administrative cost and is also known as "overhead" or "indirect cost."  Expenses associated with the administration of sponsored projects, but which are not easily attributable to any specific project, fall into this category.  Some examples are utilities associated with lab space; costs to administer human resources and payroll for project personnel; departmental support staff; and office supplies.  In order to recoup a portion of these costs the University periodically negotiates with the Federal government to determine F&A rates to be used on sponsored projects.  These rates are based on expenditures and space allocable to research, instruction and public service/outreach for sponsored projects.
  • How can I determine the appropriate F&A rate to use for my proposal budget?
    Use your answers to the following questions to make a determination and then check the current F&A Rate Table:
    1. Is the project best classified as being for research, education, or public service/outreach?  Note that the National Science Foundation classifies all of their awards as research unless otherwise specified in the RFP.  (Definitions)
    2. Is the work being done on-campus?  Note that on-campus is not limited to UI's main Moscow location.  (Definitions)
    3. Is the work being directly funded (i.e. not Federal pass-through funding) by the State of Idaho?  The State of Idaho negotiated rate is 20% on total direct costs.
    4. Are there any sponsor limitations on the rate specified in the RFP?  Written documentation of any rate limitations by the sponsor must be included with your proposal package.

    Note that the University may not charge more than the F&A that would be charged under our Federally-negotiated rates using "modified-total-direct-costs" (MTDC) as the basis, so if another basis (e.g. total direct costs) is used then a comparison should be done.  (Definitions)

  • How can I determine whether the sponsoring agency has a limitation on F&A?
    Generally speaking the limitation, along with any other specific exclusions such as "no tuition," will be specified somewhere in the RFP.  It may also be listed on the sponsor's website, or be a limitation based on a cooperative agreement, such as a CESU.  When in doubt check with your Sponsored Project Administrator for assistance.  Note that written evidence of the limitation, such as a published policy, must be provided to OSP as part of the completed proposal package.
  • How can I determine which method I should use to calculate F&A?
    The default method for calculating F&A is known as modified-total-direct-cost (MTDC) and is calculated by multiplying all direct costs, excluding the following items, by the specified F&A rate:
    • Tuition/fees and student insurance
    • Single equipment purchases over $5000 (note that component parts that will be used to build a single piece of equipment over $5K also fall into this category)
    • Those portions of subcontracts greater than $25,000 (the first $25K of each subcontract is subject to F&A)
  • How do I calculate F&A based on the total-direct-costs method?

    The total-direct-cost (TDC) method is exactly what it sounds like.  Multiply all of your direct costs, with no exclusions, by the selected rate.

  • How do I calculate F&A using the total-project-costs method?
    The total project costs (TPC) method is unusual in that it allows F&A to be charged not only on direct expenses, but also on the F&A expenses themselves.  The easiest way to do this calculation is to first convert the TPC rate to a TDC rate using the following formula:

        TPC F&A Rate/(1-TPC F&A Rate) = TDC Rate (ex. 20% TPC = 20%/(1-20%) = 25%)

    Once you have converted your rate then you may use the TDC formula of multiplying all direct costs by the TDC rate.
  • What if I don't think I can get the project done within the amount of funding provided by the agency? Is there any chance the University will waive the F&A for my project?
    The Vice President for Research and Economic Development is the only person that can grant a waiver of F&A, and because those waivers are essentially shifting the cost burden to the rest of the University waivers are granted infrequently.  To request an F&A waiver please fill out the justification form.  Alternatively, consider reducing your scope of work sufficiently to decrease your direct cost budget.