Facilities and Administration (F&A) Costs (Commonly called Indirect Costs)

No. 4-26    Rev.       Date 11-08-05       



I. PURPOSE

To establish authority to collect Facilities and Administration (F&A) Costs (commonly called Indirect Costs).

II. REFERENCES

  • OMB Circular A-21
  • Board of Regents Regulation 532-5  

III.  DEFINITIONS

Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities with relative ease and a high degree of accuracy.  Examples of direct costs could include salaries, fringe benefits, equipment, supplies, travel, and other expenses.

F&A (indirect) costs are costs incurred for common or joint objectives that cannot be identified readily and specifically with a particular sponsored project or institutional activity.  For example, F&A costs may include, but are not limited to: building and equipment use, operations, maintenance and utilities, general departmental and sponsored projects administration, library, and capital improvements.

The on-campus rate recovers all F&A costs incurred by the University as a result of carrying out externally funded sponsored project work on the campus.  These costs generally fall in the following categories:

    1. Maintenance and operation of facilities
    2. Departmental administration
    3. General administration
    4. Sponsored Projects administration
    5. Library expense
    6. Depreciation of buildings and equipment
    7. Certain student usage costs
    8. Campus Computing Network Access

The off-campus F&A cost rate recovers only those expenses which fall into the following categories:

  1. Departmental administration
  2. General administration
  3. Research administration  

IV.  POLICY

A.  Because each sponsored project adds to infrastructure costs not borne by tuition or other general income sources, the costs must be reimbursed through payments for F&A expenses.  F&A rates are applicable to all externally-sponsored projects (grants, contracts, cooperative agreements, subgrants and subcontracts, etc.) funded by federal, state or private sponsors.

B.  WSU expects external sponsors to pay the actual costs of conducting the sponsored project.  These costs include both the direct and the F&A cost obligations incurred by WSU in the conduct of a project.

C.  The State Board of Regents requires recovery of full indirect costs (F&A) whenever and wherever possible.  If full F&A costs cannot be recovered because the sponsoring agency is mandated by law or written regulations, applicable to all potential funding applicants, to fund less, the maximum available F&A costs must be assessed.

D.  Deviation from the full applicable F&A rate must be approved in advance and in writing by the Academic Associate Provost or Provost, and be filed in the OSP Contract File.

E.  WSU's federal F&A cost rates for sponsored projects are established in accordance with the federal government's Office of Management and Budget (OMB) Circular A-21, Cost Principles for Higher Education.  The rates are based on F&A cost rates negotiated between WSU and the federal government.  Sine F&A cost rates are based on the level of existing facility and administrative expenses, payments received for F&A costs constitute reimbursements for actual costs incurred.

F.  Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or F&A costs.  Where WSU treats a particular type of cost as a direct cost of sponsored agreements, all costs incurred for the same purpose in like circumstances shall be treated as direct costs of all activities of the institution.

G.  WSU may establish alternative equivalent F&A cost rates.  IN all cases these rates will be the equivalent of the University's federally negotiated F&A cost rates.  WSU will be consistent in its application of F&A.


Weber State UniversityOgden, Utah 84408

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