F&A Booklet
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10. What are the F&A cost charges to my grant
actually paying for?
Chart VI (see below ) shows a variety of activities and costs that are allowable components for calculating the University’s overall F&A cost rate. While central administrative expenses may be the component of F&A costs that come most readily to mind, many institutional resources are used in support of research. A given project will require some of the resources on the list more than others, but most projects draw on all F&A cost pools. Moreover, a proposal seeking funds for a fairly small project, and the subsequent award, typically will require proportionately much more of the services associated with F&A expenses than does a grant with a million dollar budget. Since a number of F&A cost elements that support a grant represent fixed costs, it can be argued that smaller projects should pay higher rates.
In reality, a variable rate structure would not only be cumbersome to apply, it would also be inconsistent with the government’s Circular A-21 guidelines. Researchers in the humanities typically receive smaller grants. They sometimes wonder what the purpose of F&A costs are. Anyone receiving an NEH summer research salary of $5,000 in FY 2003 would generate an additional 46.8 percent in federal funds, or $2,344 for F&A costs. They may feel that they do not need laboratory space and expensive equipment and should instead be assessed at a different rate. A more comprehensive look reveals that more of the institution’s resources are used than seems apparent on casual reflection (for example, costs for maintaining the library and its collection, support of graduate student assistants, and the cost of grant accounting and administration).
The library is another example of a major resource necessary for research, but often taken for granted and not recognized as a component of F&A costs. The library is used by virtually everyone engaged in scholarly activity, and the availability of this asset depends to a significant degree on the flow of F&A cost reimbursements to cover a portion of the costs of the university’s library system. Some may argue that they don’t use the library, but access journals electronically from his/her office. Yet, access to electronic journals is provided, in part, from money made available from F&A recovery.
The increasing number and complexity of requirements imposed by the federal government to ensure compliance with various regulations also contribute to F&A costs. Chart VII (see below ) lists new or revised federal regulations that have come into effect just since 1988. The new regulations require the University to institute new or expanded monitoring activities, to submit certifications, and, in general, to handle a great deal more paperwork than ever before.
Chart VI
Representative Resources Allowed As Indirect Costs
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Advertising Costs (for Personnel) Affirmative Action Monitoring Animal Care Review Bond Interest Building Depreciation Central Administration College Administration Communications Costs Computer Facilities and Services Custodial Services Department Administration Employee Benefits Environmental Health and Safety General Accounting Graduate Student Admissions Graduate Student Services |
Grant and Contract Accounting Grant and Contract Services Human Subjects Review Library Services Maintenance / Operations Payroll Office Personnel Office Purchasing Office Risk Management Security (Campus Police) Selected Publications Selected Subscriptions Seminar Costs Transportation Costs Utilities |
Chart VII
Federal Rules/Regulations Since 1988
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Anti-Kickback Act (1988) Anti-Lobbying Rules (1990/92/95) Certifying Accuracy of Indirect Costs (1991) Circular A-21 Revisions (1991/93/96/98) Circular A-110 Revisions (1993/99) Circular A-133 Revision (1997) Clean Air Standards (1988/90) Clean Water Standards (1988/90) Conflict of Interest (1995) Cost Accounting Standards (1995) Debarment and Suspension (1989) Drug Free Workforce (1989) Americans with Disabilities Act (1990) Small Business Subcontracting Plan (1990) |
Drug Free Schools and Campuses Act (1990) Hazardous Waste Disposal (1998/90) Human Subjects Training for NIH PIs (2000) Medical and Infectious Waste (1988/90) Misconduct in Science (1989) Non-Delinquency of Federal Debt (1989) NEA Clause on Obscenity (1990) PHS Policy on Instruction in Responsible Conduct in Research (Pending 2000) Procurement Integrity (1990) Radioactive Waste Disposal (1988/90) Right to Know Laws (1988/90)
Y2K Requirements (1999) |