Oregon State University
AN INTRODUCTION TO
FACILITIES &
ADMINISTRATIVE RATES
November 2008
Outline
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Definition of F&A Rate calculation
How rate is calculated
Cost components used in the calculation
How recovered indirect (F&A) monies are
used
How you fit into the process
Summary
What are F&A Rates?
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Facilities & Administrative costs = F&A
F&A = indirect cost or overhead
F&A rate allows recovery of costs incurred
for common or joint use that cannot be
readily identified to a specific project
The rate is applied to sponsored projects
Federal Involvement
OMB Circular A-21
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Guides the F&A process
Stipulates the proposal format
Identifies allowable costs for both direct
grants expenditures and indirect
Rates are negotiated with the US
Department of Health and Human Services
(DHHS)-Division of Cost Analysis (DCA)
Indirect Costs are Assigned to
1 of 9 Cost Pools
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FACILITIES
 Building
Depreciation
 Interest on debt
 Equipment
Depreciation
 Operations &
Maintenance
 Library
The Facilities Components are
not subject to a cap
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ADMINISTRATION
 General
Administration
 Departmental
Administration
 Sponsored Projects
Administration
 Student Services
The Administrative Components
are subject to a 26% cap
F&A Cost Calculation
Computing the F&A Rates
Facilities Portion
Indirect Cost Pools
After Cross Allocations
Interest; Building &
Equipment Depreciation
Operations and
Maintenance
Library
Organized
Sponsored
Research
Other
Sponsored

Activities
F&A
Rate
Distribution
Base
Functions
÷
÷
MTDC
Organized
Sponsored
Research
=
%
MTDC
Other
Sponsored
Activities
=
%
Administrative Portion
General Administration
Department
Administration
Other
Institutional
Activities
Sponsored Projects
Administration
Instruction
Student Services
Note: Distribution Base
For Instruction and Other
Institutional Activities Are
Not Shown Since F&A Rates
Are Neither Computed Nor
Negotiated for These Functions
FY 2005 Proposal Components –
Research Rate
Sponsored
Projects Admin Building Dep/Interest
7%
5%
Equipment Dep
5%
Departmental Admin
36%
Operations &
Maintenance
27%
General Admin
15%
Library
5%
How does OSU use Returned
Overhead (ROH)?
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OSU must use some of its F&A recoveries
to improve research facilities (as described
in OMB A-21, Section J.14.h)
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Research facilities upkeep (BUC funds)
Research equipment (RERF fund)
The remaining $s are allocated in the OSU
budget process
How You Fit into this Process
As departmental staff, you are key to OSU’s
successful preparation of the next F&A rate
proposal.
You are involved in:
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Processing payments for goods and services
Processing payroll transactions
Completion of PAR forms
Choice of Index is Important
Many costs can only be identified by use of
indexes with specific Program or Org Codes.
Example: Salary and travel account codes are
not unique to any cost pool (numerator) or
function (denominator).
These costs must be placed in the proper
index to correctly identify their purpose.
Choice of Index
The function or purpose of an expense should
dictate where the cost is recorded.
Example: A department chair wants to charge
travel to an FSxxxx Foundation-reimbursable
index. What is the purpose of the travel?
 Administration related?
 Instructional support?
 Fund raising, alumni, lobbying?
How Program Codes Relate to F&A Rates
Administrative Portion
Facilities Portion
Indirect Cost Pools
(Numerator)
Building &
Equipment Depreciation
11xxx – Ag. Ex. Sta. Res.
12000 – FRL
13000 – Other CIPs
15xxx – Spon. Res.
17xxx – Cost Share, Res.
Operations and
Maintenance
5xxxx – O&M
52500 – Facil. Maintenance
Library
18xxx – Other Spon. Act.
General Administration
01800 – Dept. Aca. Support
11200 – Ag. Exp. Sta. Admin.
30600, 30800 – Dean’s Office
Department
Administration
Sponsored Projects
Administration
Student Services
4xxxx – Auxiliaries
20600 – Services/Testing
Unallowable Expenses
01100—Instruction
Functions
(Denominator)
Organized
Sponsored
Research
Other
Sponsored
Activities
Other
Institutional
Activities
Instruction
Non-financial Activities
You may be involved in:
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Space Study – winter ‘09
(appropriate coding of space is critical)
Equipment Inventory - FY09
(identification of equipment location and
condition is critical)
F&A Rates of Peer Institutions
Institution
Rate
Institution
Rate
Cornell Univ.
Univ. Arizona
59.0
51.0
Purdue Univ.
Ohio State Univ.
52.5
50.0
Michigan State Univ.
Univ. Cal., Davis
Univ. Wisconsin
52.0
48.5
48.5
Univ. of Illinois
Texas A&M Univ.
Oregon State Univ.
58.5
46.5
46.2
The Next Proposal
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The proposal will be based on FY09
financial data (July 2008 – June 2009)
OSU will start the F&A rate proposal at the
close of FY09 (Aug 2009)
A new rate agreement should be
negotiated in the spring or early summer
of 2010
Thanks for Your Efforts—It Can’t
Be Done Without You!
Questions? Contact – Karen Steele 72294 or Charlotte Rooks 75422