Research facilities and administrative (F&A) costs are the sum of all indirect costs incurred in support of research activities within a fiscal year.
Understanding F&A Costs
F&A costs, otherwise known as indirect costs, cover both facilities costs and administrative costs that are incurred by the University of Minnesota when conducting sponsored research, instruction, and public service projects. The F&A rate is the mechanism used to reimburse the University for these infrastructure support costs.
At the U, F&A revenue is returned to colleges (or the equivalent resource responsibility center (RRC)), to pay for infrastructure costs such as the construction and maintenance of buildings and shared research facilities, utilities, libraries, and central and departmental staff. F&A recovery is critical to the University’s research operations and infrastructure but does not cover all the costs of research incurred by the institution.
Where F&A Rates Come From
Because the University of Minnesota is a major recipient of federal funding, it follows the principles and guidelines outlined by the federal Office of Management and Budget (Uniform Guidance, 2 CFR §200).
Costs are assigned to one of several pools within facilities and administrative categories. Once these costs are allocated in accordance with federally mandated allocation methods, they are divided by the modified total direct costs of sponsored research to come up with the actual F&A rate.
This calculated rate becomes the starting point for the rate negotiation process between the University and the Department of Health and Human Services, Cost Allocation Services, which negotiates on behalf of all federal agencies.