F&A General Information and Historical Rates

What Is F&A?

Facilities and administrative costs are incurred for common or joint objectives and, therefore, cannot be readily identified with a particular sponsored project. F&A costs are also commonly referred to as indirect costs or overhead.

How Is the F&A Rate Determined?

The F&A rate is negotiated periodically by Contract & Grant Administration and MSU's cognizant federal agency, i.e., the US Department of Health and Human Services (DHHS), Department of Cost Allocation Services. The negotiation process is subject to a detailed review by federal auditors.

How Are Newly Negotiated F&A Rates Applied at MSU?

MSU will use the F&A rates included in the new rate agreement for awards received after the rate agreement has been finalized, with the following exception.

If the proposal was submitted before the new F&A rate agreement was finalized, and the F&A rate used in the proposal budget is less than the newly negotiated rate, MSU will use the F&A rate included in the proposal.

What Makes up Our Current Research Rate?

Departmental Administration

These are administrative and support expenses of departments, colleges, and divisions, which benefit common or joint activities, i.e., instruction, research and public services. Examples include: salaries for the administrative portion of the unit administrator, AP and CT support staff, office supplies, office computers, local phone, postage, and membership costs. Also included are other professorial or professional staff whose appointments or assignments include administrative work. This area currently accounts for 20.7% of the rate.

Operations and Maintenance

Included are costs of operating and maintaining the physical plant, i.e. heating, lighting, custodial services, care of grounds, campus security, and routine maintenance of buildings. This area currently accounts for 29.6% of the rate.

General and Administrative Expenses

Included here are expenses for executive administration, the business office, and most other offices serving the entire university, i.e., President, Provost, Personnel, General Counsel, Controller, etc. Collectively they account for 15.9% of the rate.

Building and Equipment Costs

The institution is credited for providing buildings and equipment to sponsored projects by applying a depreciation factor. Each class of asset has a reasonable useful life. Also, the interest costs associated with new buildings and equipment that is paid to external parties is included here. This area accounts for 21.6% of the indirect cost rate.

Sponsored Projects Administration

These are expenses of separate units established to administer sponsored projects. Several offices are involved with examples including: the Office of Research and Innovation, Office of Research Regulatory Support, Human Subjects and Animals in Research, Export Control, the Office of Sponsored Programs, and Contract & Grant Administration. This area currently accounts for 9.0% of the rate.

Library

Included here is a share of all expenses of the library including the cost of books, and library materials. This component is 3.2% of the rate.

F&A rate points in the on-campus research rate 7/1/2023 - 6/30/2027

How Is F&A Allocated?

Per University policy, each college and department is allocated 10% (20% in total) of the F&A charged to its grants and contracts to provide for research facilitation funds. Research facilitation funds are calculated on a March to February year, and included in the unit's next general fund allocation letter (i.e. July). The calculation is based on the F&A distribution and post-award unit indicated on the Proposal Development document. This mechanism provides the college with the opportunity to use research facilitation funds to best fit their needs.

Current and Past F&A Cost Rates

*The 7/1/11-6/30/15 rates were extended for one additional year in the 7/1/15-6/30/19 negotiations.