Office of Sponsored Programs
The Ohio State University

Facilities & Administrative Costs

Facilities & Administrative (F&A) costs are those costs associated with providing and maintaining the infrastructure that supports the research enterprise (buildings and their maintenance, libraries, etc.) and which cannot easily be identified with a specific project. Ohio State encourages including the appropriate F&A costs in all proposal budgets, unless the sponsor specifically prohibits them, and it expects that F&A costs will be recovered to the maximum extent possible.

“Facilities” is defined as depreciation and use allowances, interest on debt associated with certain buildings, equipment and capital improvements, operation and maintenance expenses, and library expenses. “Administration” is defined as general administration and expenses, departmental and college administration, sponsored projects administration, and all other types of expenditures not listed specifically under one of the subcategories of Facilities.

Because Ohio State receives research funds from the federal government, the university follows policies from the Office of Management and Budget (OMB) outlined in Uniform Guidance, 2 CFR §200 to determine the F&A rate.

Every four years, the university collects information from across our campuses to determine the actual cost of conducting organized research and other university functions.  This information, which is referred to as an F&A rate proposal, is submitted to the U.S. Department of Health and Human Services (HHS).  HHS auditors comprehensively review the rate proposal and negotiate F&A rates based upon specific costs that have been deemed allowable expenses by the OMB.

The final rate agreement includes separate rates for different types of activities.

Current Negotiated F&A Rates

Based on the rate agreement, for projects funded on or after 07/1/16, the rates will be:

Activity Period On-Campus Off-Campus*
Research 7/1/16 – 6/30/2017 54% 26%
7/1/17 – 6/30/2018 55% 26%
7/1/18 – 6/30/2020 56% 26%
Instruction 7/1/16 – 6/30/2020 52% 26%
Other Sponsored Activities 7/1/16 – 6/30/2020 30.5% 24%

Rates are applied to a Modified Total Direct Cost (MTDC) base i.e., to all costs except equipment (stand alone items with a useful life of a least 1 year and a unit cost of at least $5,000); alterations and renovations; patient care costs; tuition; rental of off-site facilities; subaward costs in excess of $25,000.

When an F&A rate lower than the appropriate university approved rate is used, the rate is applied to all direct costs (i.e., the base to which the F&A rate is applied is total direct costs, not modified total direct costs), unless the sponsor specifically excludes certain categories.

*Off-campus rate applies to those projects (a scope of work or activity with a separate budget and accounting) for which 50% or more of the salary and wages are incurred in facilities not owned and controlled by the University and for which rent is allocated as a direct cost to the project.

Components of the Negotiated Research F&A Cost Rate

Component FY 2017 On-Campus FY 2018 On-Campus FY 2019-20 On-Campus Off-Campus
Building Depreciation 5.3% 5.5% 5.7%
Equipment Depreciation 6.2% 6.5% 6.7%
Interest 1.9% 2.0% 2.1%
Operations & Maintenance 12.9% 13.3% 13.8%
Library 1.7% 1.7% 1.7%
Administration 26.0% 26.0% 26.0% 26.0%
TOTAL 54% 55% 56% 26.0%

Facilities & Administrative (F&A) Costs on Subawards

If a project does not recover F&A costs at the appropriate negotiated rate, the F&A cost base is total direct costs (TDC), which includes the entire subaward amount, unless the sponsor specifically excludes subaward costs. In addition, any F&A cost restrictions are passed on to the subawardee.

If a project recovers F&A costs at the appropriate negotiated rate, only the first $25,000 of the subaward is subject to F&A costs. In a multiple-year project, the total subaward amount across all years is considered in calculating the F&A costs. Thus, if organization X will receive a subaward for $40,000 in each year of a four-year project, F&A costs are applied only to the first $25,000 in year 1. However, if the budget is $10,000/year, F&A costs would be applied to the entire subaward amount for years 1 & 2; to $5,000 in year 3; and not at all in year 4, as depicted in the example below.

Award Year Subaward Budget Amount Included in F&A Base Amount Excluded from F&A Base
Year 1 $40,000 $25,000 $15,000
Year 2 $40,000 $0 $40,000
Year 3 $40,000 $0 $40,000
Year 4 $40,000 $0 $40,000

 

Award Year Subaward Budget Amount Included in F&A Base Amount Excluded from F&A Base
Year 1 $10,000 $10,000 $0
Year 2 $10,000 $10,000 $0
Year 3 $10,000 $5,000 $5,000
Year 4 $10,000 $0 $10,000

Industry-Sponsored Research

Download Ohio State’s Industry-Sponsored Research F&A rate (Ohio State username.# required).