Guidance on Facilities & Administrative (F&A) rates and requests for reductions to applicable F&A rates

It is the goal of Duke University to recover full costs of each sponsored project where permitted by the sponsor's policies.

Full costs are those that are generally treated as direct (costs that can be readily and specifically identified with a particular sponsored project relatively easily with a high degree of accuracy) and facilities and administrative costs (sometimes called F&A, indirect, or IDC), which are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project).

The Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, 2 CFR Part 200 (otherwise referred to as the Uniform Guidance), includes principles for determining costs applicable to grants, contracts, and other agreements between the Federal government and Duke University and also defines criteria for determining both direct and F&A costs.

Duke’s General Accounting Procedure (GAP) 200.330, Facilities and Administrative Costs on Sponsored Projects provides a consistent method for evaluating, applying, and calculating the F&A charges associated with a sponsored project.

Calculating F&A Costs

When calculating F&A costs in a budget, it is important to consider both the F&A rate as well as the F&A base.

The Modified Total Direct Cost (MTDC) base is used for Federal sponsors when the University's federally-negotiated F&A rate is applied. The F&A rate is applied to a modified amount of the total direct costs of the project budget, which excludes:

Equipment costs of $5,000 or greater
Capital expenditures
Rental costs of off-site facilities
Patient Care Costs
Tuition Remission
Scholarships and fellowships
The portion of each subaward / subcontract in excess of $25,000 for the performance period of the project

The Total Direct Cost (TDC) base is used for most non-Federal sponsors. The F&A rate is applied to the total direct costs of the project budget, without exclusions.

See Duke University's current Rate Agreement for approved F&A rates.

Federal Sponsors and F&A Costs

For sponsored projects supported by the federal government, the Uniform Guidance §§ 200.413 and 200.414 prescribe the allowability of certain costs and the assignment of those allowable costs as direct or "indirect." With certain limitations, 2 CFR §200.413 is intended to enable Duke University to recover full costs on projects sponsored by federal agencies. (For F&A costs, the Uniform Guidance uses the term "Facilities and Administrative" or "F&A" costs.)

Duke University negotiates its F&A rate with the Department of Health and Human Services (acting on behalf of the federal government) which results in an F&A Rate Agreement. The agreement specifies the rates at which the University can recover its F&A costs associated with projects sponsored by all agencies of the Federal government, and sets forth F&A rates for three types of sponsored activities:

Organized Research

Organized Research applies to research and development activities that are separately budgeted and accounted for and have definite objectives; includes sponsored and internal research. Federally-funded clinical trials are considered organized research.

F&A Rate	Base	Applicable to	Description
61% On Campus	MTDC	Organized Research	These projects are in the restricted xx3xxxx WBSE series
28.5% Off Campus1	MTDC	Organized Research	These projects are in the restricted xx3xxxx WBSE series
26% Off Campus	MTDC	Organized Research	These projects are in the restricted xx3xxxx WBSE series
65.5% On Campus	MTDC	DOD Contracts for Organized Research	These projects are in the restricted xx3xxxx WBSE series
33% Off Campus2	MTDC	DOD Contracts for Organized Research	These projects are in the restricted xx3xxxx WBSE series
30.5% Off Campus	MTDC	DOD Contracts for Organized Research	These projects are in the restricted xx3xxxx WBSE series

Grants or contracts will not be subject to more than one F&A cost rate. If more than 50% of a project is performed off-campus (in space not owned, funded or leased by Duke University), the off-campus rate will apply to the entire project.

Instruction

Instruction applies to those activities offered through regular academic departments or other units, such as summer school, whether they are offered for credit towards a degree or on a non-credit basis. This also includes instruction, course and curriculum development, academic advising, and scholarly activities such as preparing papers, delivering papers, attending seminars and professional society meetings.

F&A Rate	Base	Applicable to	Description
61% On Campus	MTDC	Instruction	These projects are in the restricted xx1xxxx and xx2xxxx WBSE series

F&A Rate

Base

Applicable to

Description

61%

On Campus

MTDC

Instruction

These projects are in the restricted xx1xxxx and xx2xxxx WBSE series

Other Sponsored Activities

Other Sponsored Activities applies to those activities not considered Organized Research or Instruction. Some examples include:

Awards supporting travel, conferences, symposia, workshops, and seminars that do not otherwise meet the criteria for organized research or instruction;
Public Service, inclusive of health service, legal clinics, sustainability, and curriculum development;
Public events – sponsorship of museums, arts, dance, film, and music programs;
Duke University Press publications.

F&A Rate	Base	Applicable to	Description
33% On Campus	MTDC	Other Sponsored Activities	These projects are in the restricted xx9xxxx WBSE series

F&A Rate

Base

Applicable to

Description

33%

On Campus

MTDC

Other Sponsored Activities

These projects are in the restricted xx9xxxx WBSE series

Non-Federal Sponsors and F&A Costs

Non-federal sponsors (i.e., industry/commercial, foundation/nonprofit sponsors) are not bound by the terms of the Uniform Guidance and F&A costs are recovered in a different way. Many non-federal sponsors do not reimburse Duke for its facilities and administrative costs based on a negotiated rate agreement, instead they prescribe F&A cost rates lower than those set forth in the rate agreement with the Federal government.

In some instances, these lower F&A cost rates are linked to a sponsor’s operating philosophy of partnering with the University in developing new knowledge. However, often it is simply an administrative decision on the part of the sponsor not to honor the University's established F&A rate agreement.

F&A Rates and Descriptions

For sponsored projects that 1) are funded by a non-Federal sponsor (with non-federal funds) and 2) does not include F&A cost recovery at the prevailing Federal or industry rates, it is permissible to recover F&A costs by direct charging costs attributable to that project that are normally treated as F&A costs. Examples include clerical and administrative salaries; space/facilities; routine postage; cell phone; memberships; subscriptions; and local area network expenses.

In all cases, the services or items being charged:

Must be allowable per institutional policy to the project;
Must have a demonstrated benefit to that specific project
Must be allocated proportionate to the level of their use on that project.

F&A Rate	Base	Applicable to	Description
33%	TDC	Industry sponsored – CLINICAL TRIALS	Definition of clinical trial for F&A determination purpose: The controlled, clinical testing in human subjects (including prospective data collection) of a drug, device, treatment, diagnostic, intervention, or preventive measure to assess its safety, efficacy, benefits, costs, adverse reactions, and/or outcomes
Applicable Federal F&A rate (see Federal Sponsors and F&A Costs)	MTDC	Industry sponsored - EDUCATION	Definition of education for F&A determination purpose: Conferences, fellowships, training directed to Duke faculty, staff, and trainees; and training provided to non‐Duke trainees
Applicable Federal F&A rate (see Federal Sponsors and F&A Costs)	MTDC	Industry sponsored - RESEARCH	All sponsored activity (other than clinical trials and education) funded by an Industry source
Applicable Foundation / Non-Profit F&A rate	TDC	All projects sponsored by Foundation / Non-Profit sources
40%	MTDC	All projects sponsored by Patient-Centered Outcome Research Institute (PCORI)

F&A Waiver Requests

For Campus Schools or Provost Area (PAMC): PI should reach out to their Department Chair for approval, then the request is sent via email.
For School of Medicine
For School of Nursing: contact David Bowersox