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Approved Facility and Administration policy

Background Information
Federal facilities and administration costs (F&A) provides guidelines on cost principles for educational institutions defining allowable, allocable and consistent treatment of costs. The costs of conducting research at universities and independent research institutes are covered by funds expended on the elements of a research project such as research personnel, supplies, equipment and travel; these costs are known as direct costs. F&A costs are costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. F&A costs are synonymous with "indirect" costs. As mentioned these costs are known as F&A costs and cover such expenses as heating, air conditioning, lighting, and administrative costs such as personnel for budget management and purchasing. The federal government Office of Management and Budget (OMB) has a policy, OMB Circular A-21 that provides criteria to determine which costs are direct and which are considered F&A. F&A cost negotiation cognizance is assigned to the Department of Health and Human Services (HHS) or the Department of Defense's Office of Naval Research (DOD), normally depending on which of the two agencies (HHS or DOD) provides more funds to the educational institution for the most recent three years. For more information on OMB Circular A-21 refer to http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html.

Important costs considerations

• Allocable: cost incurred solely to advance the work of the project
• Allowable: compliant with terms/conditions of the award, sponsoring agency, A-21 and university policy.
• Consistent: cost treated according to generally accepted accounting principles using the institutional policies and procedures.
• Reasonable: the nature of goods/services and amount not found to be outside what would be objectively acceptable.

Facilities and Administration (F&A) Distribution for the CVM

F&A (otherwise known as indirect or overhead dollars) will be distributed based on the rate of accrued F&A.  The maximum allowable F&A recovery should be sought from all research or research service sponsors.  Departments and units outside the CVM with collaborating investigators on CVM initiated projects will share in F&A returned on the portion distributed to the CVM department and/or center.  F&A will only be returned on actual expenses covered in a grant. 

F&A distribution*

*Any changes in F&A recovery or distribution must be pre-approved and documented with signatures.

Revised policies implemented July 2002