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Facilities and Administrative Costs (F&A)

Facilities and Administrative costs (F&A), formerly called "indirect costs" or "overhead" are actual costs that the University incurs when research, education or outreach projects are performed at the University. These costs include administration, utilities and space maintenance, and are incurred for common or joint objectives which cannot always be specifically identified with a particular sponsored project.

All sponsored projects are required to charge the full DHHS negotiated F&A rate, regardless of the sponsor. This requirement to charge the full F&A rate rule applies to applications and proposals submitted to government agencies, private companies, industrial groups, foundations, or other organizations. OMB Circular A-21 requires all federal sponsors to pay the University's federally negotiated rate unless an agency has a statutory exemption.

F&A costs are reimbursement for actual costs. Full F&A should be calculated in the proposal budget. It should be emphasized that F&A costs are not merely convenient accounting fictions; they are factual obligations and costs incurred by the University. The assessment made against sponsors for F&A costs, therefore, is reimbursement to the University for costs actually incurred. It is not in any sense profit, bonus, or a service fee. The University cannot afford to accept funds for activities without recovering the total (direct and F&A) costs of the activities. When the University must pay these costs from their own funds, money must be diverted from other needs. On rare and unusual circumstances, the University may agree to waive F&A based on an assessment of the value of a program to the University as a whole and not just to a specific investigator or department. For more information, see the University's policy on F&A waivers.

Responsible sponsor representatives are fully aware that F&A are a sizeable portion of the total cost of supporting research. Sponsors judge proposals not by the F&A rate but by the professional standing of the faculty member, the merit of the proposed work and the pertinence of that work to their own goals.

Modified total direct costs (MTDC) exclude the following from F&A calculations:

  • Capital Expenditures
  • Equipment (any one item over $5,000)
  • Patient Care
  • Rental costs of off-site facilities
  • Scholarships and Fellowships
  • Subcontract portion in excess of $25,000
  • Tuition Remission

F&A Rate Agreement with DHHS

The University's cognizant federal agency is the U.S. Department of Health and Human Services. The current F&A rate agreement under which the University operates is effective for the period December 12, 2012 through June 30, 2016.

Elements of F&A Cost


Depreciation and use allowances, interest on debt associated with certain buildings, equipment and capital improvements, operations and maintenance expenses and library expenses.


General administration and general expenses; departmental administration; Sponsored Projects administration; student administration services; and all other types of expenditures not listed specifically under one of the subcategories of facilities.

Calculating F&A Costs

The F&A rate is a percentage of a base amount established by negotiation with the cognizant federal agency on the basis of the institution's projected costs and distributed as prescribed in OMB A-21. The appropriate F&A rate to be used is determined by the type of project work. Sponsored Project types are: research, instruction, public service, student service. Current rates can be found in the quick reference guide on the OSP website.

To determine F&A costs, calculate the sum of all budgeted costs that fit the definition of modified total direct costs (MTDC) and multiply by the appropriate F&A rate (a percentage).

The MTDC would include all budgeted direct costs with the exception of:

  • Capital Expenditures
  • Equipment (any one item over $5,000)
  • Patient Care
  • Rental costs of off-site facilities
  • Scholarships and Fellowships
  • Subcontract portion in excess of $25,000
  • Tuition Remission

The on-campus F&A rate will be applied to any sponsored project that requires utilization of University equipment, library service or University space (space owned or leased by the University and not leased by the sponsored project). The on-campus F&A rate applies to most sponsored projects.

The off-campus F&A rate will be applied only to sponsored projects in which the work is required to be based off-campus because of the nature of the work and the requirements of the award. Convenience of the employee or telecommuting is not a consideration. The current F&A rate agreement defines off-campus as the following:

An off-campus program is one where the preponderance of the program is conducted by the University:

  1. In leased facilities where space related costs (eg rent, utilities and maintenance) are charged directly to the program, OR
  2. In facilities made available (at no cost) to the program by a non-university organization OR
  3. A minimum of 50 miles away from the university over an uninterrupted period of time in excess of 90 days per program year for field work. Short duration workshops are generally considered to be off-campus.

Requesting an F&A waiver

It is the policy of the University to collect the full amount of the negotiated F&A rate on all sponsored projects.

Waiver: The difference between the University's approved F&A rate and the sponsor's F&A rate. All voluntary waivers must be approved by the Vice President of Research and Innovation. Note: A sponsor policy that mandates an F&A rate which is lower than the University's full F&A rate is not considered a voluntary waiver. For further information on the waiver process, please see the Policy on F&A Waivers.

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University of Nevada, Reno

University of Nevada, Reno
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