Policy Revised : April 2010
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 UNR. 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. Therefore, the F&A rate is accounted for on a pooled basis and assigned pro rata using the F&A rates that are determined by our cognizant agency, the Department of Health of Human Services (DHHS). The F&A rate determination process occurs at regular intervals. It begins with a rate proposal submitted by UNR and ends after the proposal undergoes critical review by DHHS.
In the past, this process was referred to as a negotiation, but in recent years DHHS has applied a strict evaluation which has eliminated any room for negotiation. Sponsors can have confidence that the F&A rates used by the University will result in a modest recovery of costs by the University. F&A costs are real and need to be paid, if not by the granting agency, then by another source of University funds. UNR’s ability to invest in research cores, renovation of research space, faculty start-up packages, and research administrative staff support depends upon recovering the maximum allowable amount of facilities and administrative costs from all grants and contracts. 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.
Non-profit and Governmental Sponsors: The University will grant an exception to the policy of charging full F&A costs for non-profit sponsors and governmental agencies that have explicit, published policies limiting F&A recovery. A copy of the published restriction must be attached to the proposal submitted for review to the Office of Sponsored Projects. The reduced F&A rate will be applied to modified total direct costs unless the sponsor’s published guidance states otherwise.
NOTE: Any limits of F&A recovery must be consistently applied to all recipients of support from the agency. Behind-the-scenes negotiation by University employees with sponsoring agencies regarding F&A recovery is strictly prohibited and is not binding on the University.
In contrast to the policy exceptions outlined above, an F&A cost waiver is an institutional agreement between UNR and a sponsor that F&A costs will be charged at less than UNR’s federally negotiated rate. A waiver or reduction shall be granted only under exceptional circumstances and only when the programmatic benefit to the university is compelling and outweighs the institutional benefit of recovering the full cost of conducting the project. An F&A cost waiver or reduction shall not be approved because the principal investigator thinks this will increase the competitiveness of the application or because the total award amount is capped.
A waiver or reduction request must be approved by the Vice President for Research, prior to the submission of the proposal. Under no circumstances shall F&A cost waivers be considered after an award is accepted by UNR. A request for a waiver of or reduction in total F&A costs must be submitted in writing by the principal investigator prior to circulating the final proposal with Transmittal (OSP1) form. The petition must include written concurrence of the department chair/school director and college dean, or center/institute director, acknowledging that the F&A costs waived will be deducted from any allocation of F&A returned to the unit(s) for the years applicable to the award. Reductions in F&A will begin with the PI's proportion, then the department, then the college proportion of F&A. Any remaining deduction will be taken from the VPR for Research's F&A allocation.
Under Full F&A (41%) 60.25% goes to the VPR, 7.75% goes to the PI, 7.75% to the department and 7.75% to the College.
If, the requested reduction in F&A is from 41% to 26% - this is a reduction of 15%.
The first 7.75% of that reduction would come from the PI's usual allocation and 7.25% from the department's usual allocation of 7.75%.
To allow for a timely review, a waiver or reduction in F&A request must be received by the Vice President for Research at least three (3) working days prior to the sponsor's deadline.
The waiver request should include the following information: