The document, created by the Council on Governmental Relations (COGR), addresses a range of frequently asked questions concerning Facilities and Administrative (F&A) costs—often referred to as indirect costs—at research universities. These twenty questions, sourced from university faculty, are answered by COGR’s Costing Policies Committee and Board to clarify the rationale, application, and nuances of F&A rates in the context of federally sponsored research. The responses cover topics such as the computation of institutional F&A rates, the impracticality of department-specific rates, the process for administrative support funding, conditions distinguishing on- and off-campus F&A rates, and the implications of accepting lower-than-negotiated rates from sponsors. Complex issues such as cost-sharing commitments, the proper classification of costs (e.g., equipment thresholds, library resources, direct charging of services), and the recovery mechanisms for specific facilities (e.g., animal care) are also addressed.
Furthermore, the document provides explanations for policies regarding space studies, subawards, and the administrative components included in F&A rates, as well as considerations about infrastructure investments and the rationale for institutional variations in F&A rates. It clarifies the distinction between vendors and subcontractors, the limits of MTDC exclusions, and the handling of F&A funds post-recovery, emphasizing institutional autonomy in internal allocations. Ultimately, the FAQ aims to foster transparent communication between university administrators and faculty by demystifying the complex federal regulations that underpin institutional F&A practices and encouraging ongoing dialogue and feedback to improve understanding and policy development.
