Facilities and Administrative Cost Rate

Overview of Facilities & Administrative Costs

Facilities and Administrative (F&A) costs, also known as indirect costs or overhead costs, are those expenditures incurred in the conduct of research and other sponsored activities and cannot be readily identified with a particular sponsored award. Such costs include building and equipment use, operations, maintenance, utilities, general departmental administration, telecommunications, library resources, and capital improvements. F&A is usually applied as a percentage/rate against the actual expenditures or direct costs of a proposal budget.

The University negotiates its F&A Rate Agreement with the Department of Health and Human Services (our "cognizant agency") and currently has two predetermined rates:

• On-campus: 26.4% MTDC
• Off-campus: 10.1% MTDC

On-Campus Rate – The current on-campus federally negotiated indirect cost rate applies to all proposals including those submitted to non-profit, for-profit, state and federal entities. The negotiated approved rate is 26.4% of modified total direct costs (MTDC).

Modified total direct costs consist of all salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract). Equipment, capital expenditures, charges for patient care, tuition remission, rental costs, scholarships, and fellowships as well as the portion of each subgrant and subcontract in excess of $25,000 are excluded from modified total direct costs.

Off-Campus Rate – The off-campus rate is applicable to project activities that are conducted at facilities not owned or leased by the University.

Application of the off-campus rate should involve the following considerations: (a) the sponsored activity takes place in facilities not owned by the University and the project budget includes rent for those facilities or the space is provided at no cost to the University and more than 50% of the effort for the project is taking place in the rented or no cost facility; (b) more than 50% of the proposed effort of Longwood personnel will be performed off-campus.

Note that only one rate may be used in any one proposal 

Application for the off-campus indirect cost rate must be approved by the Vice President for Administration and Finance for each proposal

Accepted Deviations from the Federally Negotiated F&A Rate

The University honors a sponsor's written policy on allowable F&A rates. For example, many training grants limit F&A costs to 8% MTDC and many foundations limit F&A costs to 10% of total direct costs. In such documented cases, the OSPR will apply the allowed F&A rate instead of the University's federally negotiated rate.

For application guidelines that are silent on F&A, the OSPR will apply the appropriate federally negotiated rate.