F&A Base Definitions
Facilities and Administrative Co
sts (F&A, indirect, or overhead) are used to cover additional expenses which are incurred by the University to administer sponsored projects, but that cannot be directly charged to an award (e.g. facilities, human resources, departmental administration, office supplies, etc). The basic formula is direct cost base x F&A rate = F&A costs
. The direct cost base is determined by the sponsor and is typically specified in the proposal guidelines. MTDC should be assumed if not otherwise specified.
Modified Total Direct Cost
is the total of all direct costs of the project, with the following exclusions: equipment over $5,000, capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, scholarships, and fellowships as well as that portion of each subgrant and subcontract issued in excess of $25,000.
Total Direct Cost
is the total of all direct costs of the project with no exclusions. Note that when this method is used you must also calculate F&A using the MTDC method and choose the lesser of the two.Total Costs
includes F&A expense in its calculation of F&A. To convert to TDC use the following formula: rate/(1-rate). Example: 20% Total Costs rate = 0.2/(1-0.2) = 0.25 or 25% of all direct costs. Again, a comparison must be made with the MTDC method to ensure that we are not charging more than our Federally-negotiated rate.