F&A Guidance on Federal Awards

Please view this short video for an overview of Facilities & Administrative Costs at Universities 

Guidance on Reconciling Facilities & Administrative Costs can be found here.

Please see the rate table below for current and future rates approved under this agreement:

Awards funded on or after July 1, 2019 are subject to this new rate agreement, and the rates for those awards will change on July 1 of each year as outlined in the chart above.  

Awards which were funded before July 1, 2019 are subject to the University’s previous rate agreement, and will maintain an F&A rate of 62.5% for the life of the award.

Examples

Scenario 1  - Award Funded in FY19
An NIH on-campus research award with a start date of June 1, 2019 will utilize a rate of 62.5%. All future years of this award will continue to use the 62.5% rate. However, supplements to this award may use the new rates.

Scenario 2 – Award Funded in FY20
An NSF on-campus research award with a start date of August 1, 2019 will use a rate of 62.5% for the first 11 months of the project before changing to 58.5% on July 1, 2020. All awards funded within FY20 (7/1/19-6/30/20) will follow this same procedure, shifting to a rate of 58.5% as of July 1, 2020. The award rate will then change to 59% on July 1 2021, and 59.5% on July 1 2022.

Scenario 3 – Funded in FY21
An NSF on-campus research award with a start date of August 1, 2020 will have an initial F&A rate of 58.5%. Each year the F&A rate for this award will shift according to the chart above. The change will be effective on July 1 of each year.

Frequently Asked Questions

Definitions

How does a provisional rate differ from a predetermined rate?
A Provisional rate is a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement, and reporting indirect costs on Federal awards pending the establishment of a final rate for the period. 

A Predetermined rate is applicable to a specified current or future period, usually the organization's fiscal year. The rate is based on an estimate of the costs to be incurred during the period. A predetermined rate is not subject to adjustment.

Pending Proposals & Existing Awards 

How are previously submitted Proposals affected by this rate change?
The new rates will be used for all awards made on or after July 1, 2020, regardless of what rate was used in the proposal budget. For proposals submitted using provisional rates from the prior rate agreement, award budgets will be adjusted to account for predetermined rates as negotiated under the current rate agreement when the award is received. This will result in a decrease in the applied rate. Since funds can be rebudgeted between Direct and Indirect Cost categories, this reduced F&A rate may yield additional Direct Costs available for spending

How will the F&A rate be applied to existing Federal multiyear grants and contracts?
It will depend on the initial funding date of this award segment;  Awards issued before July 1, 2019 will continue to use the previous rate of 62.5% in all years, with the exception of supplemental funding.  If the award was made on or after July 1, 2019, the new rate agreement will be in effect.

Which rate should be used for Competitive Renewals?
All requests for new funding, including NIH* Supplements and Competing Renewals should use the new rate structure regardless of when the original award was funded.

Should Supplement Requests use the same rate as the Parent Award?  
Not necessarily. The current rate agreement applies to all new funding, which can include Supplements. Unless the sponsor policies state otherwise*, Supplement proposals should incorporate the new rates, even if the Parent award was funded before July 1, 2019.

*NSF has a policy of funding supplemental support using the negotiated indirect cost rate(s) approved at the time of the initial award, so supplemental proposals to NSF should use the original agreement's rates. See NSF PAPPG Chapter VI.E. Note that most NSF supplements submitted by Brown are for REU/Participant Support, which generally don’t include F&A. 

What F&A rate is applied to Carryover funding?
Carryover is subject to the F&A rate in effect when the costs are incurred.

How will the F&A rate be applied to existing Non-Federal projects?
If the Non-Federal Sponsor has a published rate which is lower than Brown’s negotiated rate, that lower rate can be used for proposals submission as long as documentation of the rate restriction is uploaded to the proposal record.

If the sponsor does not have a rate limitation and Brown is able to recover our full F&A, the same principles outlined above will apply. Awards funded after July 1, 2019 are subject to this new rate agreement, and the rates for those awards will change on July 1 of each year as outlined in the chart above. 

If we are a subrecipient on an existing award and the sponsor institution requests an updated budget each year, should we use the new F&A rates when preparing our budget?
Assuming that the sponsor issues modifications extending the subaward each year, the rate agreement in effect at the time the subaward was originally issued remains effective throughout the life of the sub.  So if the subaward began before July 1, 2019, the rate of 62.5% is maintained throughout.  If the sub was issued on or after that date, it falls under the new rate agreement and should use the new rate structure.

If the sponsoring institution is issuing a new, separate subaward, the new rates would be used.

F&A Rate Transition for FY 20 Awards (start dates between 7/1/2019 and 6/30/2020)

The rate for FY 20 awards changed to 58.5% as of July 1, 2020.  Why isn’t the new F&A rate calculating correctly for July and August 2020? 
FY 20 awards started with the Provisional IDC rate of 62.5% and now fall under the new rate agreement.  This fiscal year’s IDC rate transition from 62.5% to 58.5% was not seamless.  Therefore, July’s IDC rate remained at 62.5% and you will find the F&A adjustments in August, with 7/31/20 budget dates.  Please see the example below:

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