F&A Booklet
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17. How important is F&A cost reimbursement to
the University?
Chart V shows growth of both direct and F&A cost at Washington State University during the last twelve years. F&A cost reimbursement is the primary source of infrastructure support for WSU ‘s extensive graduate education and research programs. The F&A cost reimbursements pay for a wide range of support services and administrative activities. They make it possible for the institution to operate a first-rate library system for research and scholarship; they also allow us to service, maintain, and renew our research facilities, the lifeblood of the University. Recently, some of this money has been reinvested to build the research enterprise. Without the F&A cost reimbursements, our research and graduate teaching enterprise would be only a shadow of its present size and quality. Indeed, without the growth in F&A recoveries, WSU would have been faced with very painful budget cuts in the late 1980’s and early 1990’s, and recent budget cuts would have been much worse than those experienced.
Anyone who has submitted grant proposals during the last ten years is aware that the on-campus research F&A cost rate has remained at approximately 45 percent from 1982 through 2002. While the rate has been constant, the amount of F&A cost reimbursement has increased from $8 million in 1990 to $15.3 million in 2002, primarily because of the increase in grant and contract awards and a concerted effort to recover as much of the real cost of research as possible. F&A cost reimbursement made up 22 percent of DOF (Local Designated Operating Fund) revenue in FY 2002. Other significant DOF revenue sources were self-sustaining local funds with 54 percent of the total, administration fees and investment income with 17 percent of the total, and engineering fees with seven percent of the total. It should be noted that investment income could vary considerably from year to year based on the performance of the University’s investment portfolio. If investment income were to decline sharply, the percentage of the total fund provided by the other revenue sources would increase proportionately. Even considering the other DOF revenue sources, by far the biggest contributor to the increase in the fund revenue has been the increase in F&A reimbursement.