What is F&A, and why does the university collect it?
Research costs can be broken down to direct costs and facilities and administrative (F&A) costs.
Direct costs pay for the resources that can clearly be linked to one project. Examples of direct costs may include salaries for the primary investigator (PI) or mileage reimbursement for traveling to a grant project destination.
Facilities and Administrative Costs
F&A (commonly referred to as "indirect" or "overhead") helps pay for costs of a grant project that can’t easily be billed to one project.
F&A costs include administrative, secretarial and clerical support, and compliance efforts required by the granting agencies not separately accounted for, such as payroll, purchasing, utilities, building maintenance and use of equipment not purchased through sponsored project budgets.
Most principal investigators don’t think of these expenses as part of their grant costs, but they make up a large portion of their total necessary resources. Because of these indirect expenses, most grants should be calculated to take these F&A costs into account.
F&A costs are set yearly, based upon an annual comprehensive audit. F&A rates are available on the web: http://www.research.missouri.edu/ogwp/files/grantfactsheet.pdf
Why are F&A C\costs so high?
All of the indirect costs taken together are a significant portion of the university’s expenses. Without F&A, some projects might be forced to make many painful cuts, which would reduce the ability to conduct more projects, which reduces the ability to attract more funding.
Recovery of F&A isn’t as high as it seems. In reality, MU only accounts for a fraction of the negotiated rate. This is because F&A costs for many educational programs, some federal and state grants, and some private foundations are capped or prohibited. Typically extension rates are 26% (off campus) and 30% (campus). The on-campus rate for research is 51.5% and for instruction the rate is 48%.
Are there times when waiving the F&A is justified?
Since F&A is a REAL cost, it cannot truly be waived. However, there are times when the university can absorb some or all of the costs as its contribution toward the project. This is only allowed when it can be proven that the institutional benefits of the program clearly outweigh the reduction in sponsor funding.
A "Request for University Contribution" form must be completed and signed by the principal investigator and approved by Callie Glascock or Rhonda Gibler and the Office of Sponsored Programs.
Callie Glascock Glascockck@missouri.edu