REG 10.05.06 – Facilities and Administrative Costs
Authority: Vice Chancellor for Finance and Administration
History: First Issued: July 1, 2002. Last Revised: June 13, 2023
Additional References:
Facilities & Administrative (F&A) Costs
Management Guide for Centers and Institutes
Contact Info: Associate Vice Chancellor, Budget and Resource Management (919-513-1263); Office of Contracts and Grants (919-515-2153); Associate Vice Chancellor for Sponsored Programs and Regulatory Compliance (919-515-2444); Assistant Vice Chancellor for Finance and Administration, Office of Research and Innovation (919-515-1998)
1. Introduction
This statement directs the collection of facilities and administrative (F&A) costs and allocation of F&A receipts. F&A costs are those costs incurred for common objectives of the University and therefore cannot be readily identified with a particular sponsored award.
2. F&A Cost Rate
The University’s F&A Cost Rate structure is federally negotiated. The rate structure is based on F&A costs incurred at the University level and at the College/School/Department/Unit levels. The current rates and rate agreement can be found at https://research.ncsu.edu/administration/budgeting-guidance/indirect-costs/
Allocations and use of F&A cost reimbursement funds will follow University and College/School/Unit level contributions to the overall F&A rate, insofar as possible. The Vice Chancellor for Finance and Administration recommends an annual F&A cost budget to the Chancellor for approval.
3. College Memorandum of Agreement
NCSU REG01.20.02 – Delegation of Authority to Sign Contracts permits Dean’s level approval of a standard Memorandum of Agreement for non-federally funded sponsored awards not exceeding a specified funding value of $50,000. All awards are required to be reported to and reviewed by the Office of Sponsored Programs and Regulatory Compliance. All awards in this category will be assessed an F&A rate of 15% of the total direct cost. This fee is a portion of University level F&A costs and will not be included in the pro rata share allocated annually to the Colleges. Proposals to federal and flow through agencies will follow normal University procedures.
4. Centers and Institutes (CI)
Centers and Institutes (CI) are separate administrative units created in accordance with NCSU REG10.10.04 – Centers and Institutes and approved by the Chancellor and Board of Trustees. CI that operate on the basis of internally funded awards from a research fund pool, generated from membership fees (Core projects), and enhancement award funds (Enhancement projects) must follow these procedures:
4.1 CI may budget a portion of funds collected as annual membership fees, up to the percentage specified in the university’s Management Guide for Centers and Institutes, to support CI, Department and College level infrastructure costs (CI administration).
4.2 A reduced F&A rate of at least 10% of modified total direct costs will be assessed to Core and Enhancement Projects as a portion of University level F&A costs.
5. Consortia
Consortia funding is handled the same way as CI Core and Enhancement projects. A consortium is identified as multiple companies funding generally received in equal amounts (i.e annual dues) used for internal projects of mutual interest. The Vice Chancellor for Research and Innovation must approve in writing the establishment of all consortia.
6. F&A Proposal Requirements
6.1 The Office of State Budget and Management requires that the University cover its costs of operations by claiming F&A costs on proposal budgets for sponsored awards. Unless a waiver has been obtained, F&A costs must be included in proposal budgets on sponsored projects, and the following procedures must be adhered to:
6.1.1 When awarded, F&A costs will be budgeted and charged to each sponsored project in accordance with the approved budget.
6.1.2 Rebudgeting funds to or from equipment, tuition and other costs excluded from F&A in the rate agreement may have an effect on F&A costs. The College is responsible for requesting budget revisions. The Office of Contracts and Grants will review the calculation, and either approve the request or forward the approval request to the sponsor (this will be based on the terms of the award).
6.1.3 At the end of the award, the Office of Contracts and Grants will prepare an F&A Cost Analysis to ensure that the University has recovered the maximum allowable F&A cost.
6.1.4 Project specific F&A budget may not be used to fund direct cost overruns unless prior approval has been obtained from the sponsor.
It is the responsibility of the Colleges/Schools/Departments/Units to ensure that appropriate F&A costs are included in all proposals for externally funded contracts, grants, cooperative agreements and memorandums of agreement. The amount budgeted will affect allocations that would otherwise be made to that College/School/Department/Unit.
6.2 A full or partial waiver of F&A costs can only be requested when one of the two following circumstances exists:
6.2.1 The sponsor is a government or non-profit entity with a published, consistently applied policy restricting F&A reimbursement to a rate less than the applicable University F&A cost rate; OR,
6.2.2 Extraordinary circumstances indicate that a reduction of F&A for a specific proposal is of strategic importance to the university.
6.3 Waiver of F&A costs can only be granted in writing by the Vice Chancellor for Research and Innovation or designee.