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Facilities and Administrative Costs

REG 10.05.6

July 1, 2002 Archived Version (Effective July 1, 2002 through March 15, 2004)

Authority: Vice Chancellor for Finance and Business

History: First Issued: July 1, 2002. Additional History Information.

Contact Info: Assistant Director, Systems and Compliance (919) 515-8018 Office of Contracts and Grants.

1. Introduction

This statement provides the guidelines which Colleges/Schools/Departments/Units should apply in collecting and allocating facilities and administrative (F&A) costs. F&A costs are those costs incurred for common objectives of the University and therefore cannot be readily identified with a particular sponsored award.

2. Guidelines

The University's F&A cost rate structure is federally negotiated. The rate structure is based on F&A costs incurred at the University level and at the College/School/Departments/Units. The current on-campus research F&A cost rate components (effective July 1, 2001) applicable to all externally sponsored research projects are:

University	26.9%
College/School/Unit	19.6%
TOTAL	46.5%

The College/School/Department/Unit costs represents 42.15 of the total F&A costs. This percentage may change as new F&A cost rates are negotiated over time.


Allocations and use of F&A cost reimbursement funds will follow University and College/School/Unit level contributions to the overall F&A rate, insofar as possible. The Vice Chancellor for Research, Outreach and Extension, in consultation with the Vice Chancellor for Finance and Business, recommends an annual F&A cost budget to the Chancellor for approval.

University policy permits Dean's level approval of proposals for non-federally funded sponsored awards not exceeding a specified funding value of $25,000. All awards are required to be reported to and reviewed by the Vice Chancellor for Research, Outreach and Extension. All awards in this category will be assessed a general and administrative fee of15% of total award value. This fee is a portion of University level F&A costs and will not be included in the pro rate share allocated annually to the Colleges. Proposals to federal and flow through agencies will follow normal University procedures.

3. Centers, Institutes and Laboratories (CIL)

Centers, Institutes and Laboratories (CIL), which operate on the basis of internally funded awards from a research fund pool generated from membership fees and enhancement award funds, must follow these procedures:

1. CIL must budget 16.5% of membership fees and enhancement project funds to support Department and College level infrastructure costs. Project/program directors, department heads and deans agree upon these budgets.
   
   
2. A general and administrative fee 9.5% of total direct costs will be assessed as a portion of University level F&A costs.
   
   
4. Consortia

Consortia are handled the same way as CIL membership and enhancement projects. A consortium is identified as multiple company funding generally received in equal amounts used for subrecipient projects. The Vice Chancellor for Research, Outreach and Extension must approve in writing the establishment of all consortia.

5. F&A Proposal Guidelines
   
   
1. The Office of State Budget and Management requires that the University cover its costs of operations by claiming F&A costs on proposal budgets for sponsored awards. Unless a waiver has been obtained, F&A costs must be included in proposal budgets on sponsored projects, and the following procedures must be adhered to:
   
   
1. When awarded, F&A costs will be budgeted and charged to each sponsored project in accordance with the approved budget.
   
   
2. Rebudgeting funds to or from equipment and tuition may have an effect on F&A costs. The College is responsible for completing budget revisions. Contracts and Grants will review the calculation, and either approve it or forward the approval request to the sponsor (this will be based on the terms of the award).
   
   
3. At the end of the award, the Office of Contracts and Grants will prepare an F&A Cost Analysis to ensure that the University has recovered the maximum allowable F&A cost.
   
   
4. F&A costs may not be used to fund direct cost overruns unless prior approval has been obtained from the sponsor.
   
   

It is the responsibility of the Colleges/Schools/Departments/Units to ensure that appropriate F&A costs are included in all proposals for externally funded contracts, grants, cooperative agreements and memorandums of agreement. Failure to do so will affect allocations that would otherwise be made to that College/S chool/Department/Unit.

2. A full or partial waiver of F&A costs can only be made when either of the two following circumstances exists and can be demonstrated in writing and included in the award package as supporting information:
   
   
1. The sponsor will not reimburse F&A costs of any amount or restricts reimbursement to a rate less than the applicable University F&A cost rate; or,
   
   
2. Extraordinary circumstances exist which, if F&A costs are included in a budget, may jeopardize the State's best interest.
   
   

Exceptions may also apply to longstanding corporate and foundation restriction policies applied equally to all parties receiving contracts, grants or funded agreements.

3. Waiver of F&A costs can only be granted in writing by the Vice Chancellor for Research, Extension and Outreach.

For a complete listing of F&A cost rates, please link to www.fis.ncsu.edu/cng and click on the References link and then "Facilities and Administrative Cost Rates".