Facilities & Administrative (F&A) Costs
What are Facilities & Administrative Costs?
F&A costs are Institution expenses that cannot be specifically identified with a particular project or activity. Also known as “indirect costs” or “overhead,” these costs are for administration, buildings, utilities, and other expenses necessary for operations of the Institute.
F&A costs are real costs that the institution incurs in support of extramural activities but which cannot be directly charged to a specific grant or contract. The costs results from shared services such as libraries, physical plan operation and maintenance, utility costs, general, departmental and sponsored projects’ administrative expenses, and depreciation or use allowance for building and equipment.
One example of an F&A cost is utilities because they benefit many activities in a building. Because individual F&A costs cannot be assigned to projects, the Institution calculates a rate to determine the fair share of F&A costs each project should be charged and negotiates this rate with the government. The rate is then applied to all sponsored research projects—including federal and non-federal sponsors.