Statement of Principles: Facilities and Administrative Costs

Purpose: The purpose of this statement is to:

• define Facilities and Administrative (F&A) costs
• maximize recovery of F&A costs for the Medical College of Georgia and MCG Research Institute
• comply with federal guidelines for consistent treatment of sponsored activities
• assure all requests for waivers are treated equitably

Definition: Facilities and Administrative costs (F&A; also referred to as indirect costs or overhead) are those costs associated with the conduct of sponsored activities that are incurred for common or joint objectives and therefore are not readily identifiable with a specific project. Examples of costs normally considered to be F&A costs include administrative/clerical salaries and benefits; facilities management and utilities; general-purpose equipment; office supplies; postage; memberships and dues; subscriptions/books/periodicals; local telephone charges; institutional services such as purchasing, accounting, etc.

F&A Rates at the Medical College of Georgia/Medical College of Georgia Research Institute:

• Federally negotiated rates:

  Federal Research Rate on-Campus (Predetermined)

  • FY05 43%
  • FY06 45.5%
  • FY07 46.5%
  • FY08 47%
  • FY09 47%

  Federal Instruction Rate On-Campus:

  • 41%

  Federal Other Sponsored Activities On-Campus:

  • 29%

  Federal Off-Campus Rate All Activities:

  • 26%

  These rates are applied to modified total direct costs (MTDC). MTDC is calculated by subtracting from total direct costs the charges for equipment ($5,000 threshold), patient care costs, tuition, rent, and each subcontract in excess of the first $25,000.) The Manager of Cost Reimbursement and Analysis within the MCG Office of Grants and Contracts is responsible for development and negotiation of the F&A Cost Rate Agreement that is applicable to federal awards for both MCG and MCGRI.

• Industry sponsored clinical trials

• 25% of total costs.

This rate is applied to industry sponsored clinical studies (e.g., those studies requiring Institutional Review Board (IRB) review). Note that it is applicable to all study costs, including advertising, subject compensation, and screen failures. It is not applicable to IRB fees; these fees are required of industry-sponsored clinical trials with proposed budgets above $10,000 whether or not the study initiates.

Principles

1. F&A costs are real costs of institutional support for sponsored program activity.
2. Sponsored program budgets are expected to recover F&A costs at the maximum allowable rate.
3. Budgets for industry sponsored non-clinical projects (i.e., no human subjects are involved) are to include F&A costs at the institution’s federally negotiated F&A rate.
4. Some sponsors and some programs provide F&A rates that are below the federally negotiated rate. Investigators/departments will not be penalized for under-recovery if the sponsor’s published policies include documentation that their F&A rate is lower than our federally-negotiated rate or that they do not provide funds for F&A costs. This is not considered to be a full/partial waiver of F&A costs.
5. Full or partial waiver of F&A costs may be considered with strong justification. Waivers will only be considered in exceptional circumstances, such as instances in which the sponsor’s budget limit will not support the direct costs of the project if full F&A costs are applied.
6. Requests for waivers of F&A costs are to be submitted through the appropriate chair and dean to MCG’s Associate Vice President for Research and Sponsored Program Administration for approval/review with the Vice President for Research as appropriate.

Questions regarding these principles should be directed to the appropriate pre-award staff member in the Division of Sponsored Program Administration.