F&A Rate Agreement Process Underway

Grants Accounting has engaged with Point Consulting Group to complete the university’s next F&A rate agreement with the U.S. Department of Health and Human Services (DHHS) Cost Allocation Services. The Facilities & Administrative (F&A) rate agreement, often referred to as Indirect Costs, is the process of recovering the portion of costs that support sponsored projects but are not directly charged to sponsored funds. The formulas in these negotiated F&A rate agreements are applied to all externally funded projects, including federal and non-federal sponsors, to calculate project-specific indirect costs. 

In the lead-up to the F&A negotiation, the university submits a proposal that calculates its total costs (direct and indirect) during a given year. This is considered the base year, and Ohio University’s base year for this next F&A rate proposal is FY2022. The costs are then compared to the total amount of all direct costs supported during the same year to arrive at proposed rates for Organized Research, Instruction and Other Sponsored Activity (Public Service) for the university. This proposal is reviewed by the federal government and negotiated down to a final rate for each. The final negotiated rates then apply to all new and supplemental grants and contracts at university, unless limited by statute, regulation, or other agency rule, going forward for the next three to five years, until the next F&A rate negotiation.

When working with non-federal sponsors, the university applies our federally-negotiated rates as these rates serve as a proxy for full-cost recovery. However, some non-federal sponsors have policies that do not allow the application of the negotiated F&A rates. In those cases, we know that the university’s mission may best be served by accepting a sponsored award with indirect cost recovery that is below the negotiated rate for the sponsored activity and there are processes in place to do that through the Office of Research and Sponsored Programs.

To see the current rate schedule please visit the ORSP website.

For questions related to the F&A Rate Agreement, please contact financecustomer@ohio.edu.