F&A Booklet
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6. What is the administrative process for negotiating
the final F&A cost rate?
Once the F&A cost information is assembled and appropriately documented, it is submitted to the Department of Health and Human Services (DHHS), which is the university’s cognizant federal agency. DHHS negotiators from the Division of Cost Allocation for Region IX (in San Francisco) make their own evaluation of the materials submitted and seek to negotiate downward some of the costs included in the pools.
For the 2000 fiscal year, University documentation supported a rate of 49.67 percent for on-campus research. After extended negotiations with DHHS, the University acceded to a final rate of 46.8 percent for the years beginning July 1, 2002 through June 30, 2006. These are the current on-campus research rates—the maximum rate that the University is permitted to charge federal grants and contracts for the fiscal years specified. Note, however, that this rate is lower than the actual cost rate resulting from an analysis of the real costs. Another (lower) rate, currently capped at 26 percent, is established for off-campus research, for which some of the underlying costs such as building rental are charged directly to the grant and not borne as an F&A cost by the University. As has already been noted, the Federal government imposes selective restrictions on the F&A costs attributed to certain grants, such as the 8 percent rate on many training grants and 19 percent for research supported by the competitive grants process of the USDA.