Facilities and Administrative (F&A) Costs
Facilities and administrative (F&A) costs (aka indirect costs or overhead) are real costs that are associated with carrying out sponsored projects, but are difficult to quantify with respect to any given project. For example, electricity, heat, maintenance, building depreciation, administrative expenses and library use are all F&A costs. Funds received as F&A costs are reimbursement for funds expended for central and departmental administration, buildings and grounds and library costs.
F&A costs are recovered on sponsored project proposals by multiplying the appropriate direct cost base by the sponsor’s F&A cost rate and including that figure in the total cost of the budget. Depending upon the sponsor, the direct cost base may be either the simple total of all direct costs in the budget (Total Direct Costs or TDC), or the “modified” total direct costs (MTDC), i.e., TDC minus the total of certain items in the budget. Federal sponsors use MTDC. Some federal agencies, such as DOD, have specific F&A cost restrictions.
On budgets for federal sponsors, the following line items are subtracted from the direct cost base to arrive at MTDC:
- Equipment
- Capital expenditures
- Charges for patient care
- Subcontract costs in excess of the first $25,000 during the competing project period
- Tuition remission
- Rental costs of off-site facilities
- Scholarships and fellowships
- Participant costs
In addition, MTDC on training grants and fellowships exclude tuition, fees and health insurance. Non-federal sponsors may require F&A costs to be computed on a different base.
To locate the appropriate F&A rate for your proposal, please refer to the Institutional Information Sheet.
Any questions concerning the appropriate F&A rate to apply when preparing a proposal should be directed to your assigned SPA Project Officer.
For more detailed information regarding F&A and associated institutional policies, please refer to Chapter V (C) of the Sponsored Projects Handbook.