Extension of Federal Indirect Cost Rates - PROVISIONAL RATES - Effective July 1, 2023

In a September 2022 Business Matters article, we shared with you that the process for submitting the next F&A rate proposal to the U.S. Department of Health and Human Services (DHHS) Cost Allocation Services had begun. That proposal was submitted to DHHS in December 2022. While DHHS has acknowledged receipt of the University’s proposal, we do not yet have a date when negotiations will begin.

As you recall, Ohio University completes an Indirect Cost (IDC) Proposal, resulting in a Facilities and Administrative (F&A) Rate Agreement, about every four years with the Federal government, to determine the Indirect Cost (IDC) rates. The IDC rates represent the expenses of doing business that are not readily identifiable with a specific grant, contract, project, or organizational activity, but are necessary for the general operations of the university. The current IDC rate agreement expired on June 30, 2023.

As a result, effective July 1, 2023, the University F&A rates are considered provisional rates and will continue to be the same rates as negotiated in the previous F&A Rate Agreement (dated January 2019) until the next negotiation is complete. Provisional rates are not negotiated rates and are used for interim budgeting and billing purposes to allow adequate time for F&A rate negotiations. The provisional rate is used in proposals and sponsor billings until such time as rates (fixed or predetermined) are negotiated. Once rates are negotiated individual awards are adjusted to reflect the negotiated rate. We will notify you when the rate negotiations are complete, and we have a new agreement in place.

Effective provisional rates beginning July 1, 2023 are as follows:

51% Organized Research

49% Instruction

39% Other Sponsored Activities

26% Off Campus

To see all the rates and rate components please visit: https://www.ohio.edu/research/orsp/proposals-submissions/institutional-…

Questions? Contact financecustomercare@ohio.edu