Charging of Facilities and Administrative Costs to Sponsored Projects


To establish the campus standards for the charging of Facilities and Administrative Costs to Sponsored Projects, consistent with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, and the process for requesting an exception to the standards.


This policy applies to all Sponsored Projects.


Vice Chancellor for Research.


The campus collects the applicable institutional negotiated rate for Facilities and Administrative (F&A) Costs on all externally-funded Sponsored Projects based on the classification of the project as Organized Research, Sponsored Instruction, or Other Sponsored Activities. The Principal Investigator must include the applicable institutional negotiated rate for F&A Costs in the Sponsored Project budget, unless the Principal Investigator has received an exception in advance of the proposal submission. Exceptions to this policy are granted only under very limited circumstances after review by the Sponsored Programs Administration (SPA) and with the approval of the Vice Chancellor for Research.


Facilities and Administrative (F&A) Costs
Expenses incurred for common or joint objectives in which the benefit is not readily assignable to a particular Sponsored Project and permitted to be included in the negotiated rate. F&A Costs are often referred to as “overhead” or “indirect costs.” The administrative component includes but is not limited to expenses such as payroll, accounting, human resources, and all other types of expenditures not specifically categorized as facilities costs. The facilities component includes but is not limited to depreciation on buildings and equipment, interest on debt associated with certain buildings, capital improvements, operations and maintenance expenses, and library expenses.
Organized Research
All research and development activities including research sponsored by federal and non-federal agencies or other entities. For this purpose, research is defined as the discovery and interpretation of facts, revision of accepted theories, or the application of such new or revised theories, which also require separate accounting and reporting. This includes basic, applied and developmental research.
Sponsored Instruction
All teaching and training activities (except for research training) sponsored by federal and non-federal agencies or other entities, whether such activities are offered for credit toward a degree or certificate or on a non-credit basis, and whether they are offered through regular academic departments or separate divisions, such as a summer school division or an extension division.
Other Sponsored Activities
Any program or project financed by federal or non-federal agencies or other entities that involves the performance of work other than Sponsored Instruction and Organized Research. Examples include health service projects, community service programs, facility use, and technical testing.
Principal Investigator (PI)
An individual vested by the university with the primary responsibility to independently design, conduct, and supervise Sponsored Projects awarded to the university.
Sponsored Project
Activities supported by entities outside the university that are consistent with and enhance the teaching, research, and public service missions of the university and that include a defined scope or objective and reporting and compliance requirements. Sponsored Projects include grants, contracts, cooperative agreements, and other types of agreements.


The Principal Investigator should coordinate with the Sponsored Programs Administration (SPA) in determining the applicable F&A Cost rate. SPA maintains the institutional knowledge of standard exceptions and practices in the treatment of F&A Costs for Sponsored Projects. The campus makes exceptions to collecting the institutional negotiated F&A Cost rate only under very limited circumstances.

If the Principal Investigator desires to use a rate less than the applicable institutional negotiated F&A Cost rate, the Principal Investigator should seek approval of his/her unit executive officer to submit an exception request to the applicable academic dean, institute director, or campus administrative officer. An exception request should include, for example, the following information:

  • Name of Principal Investigator, sponsor, and project title.
  • A brief description of the proposed activity, period of performance, and budget.
  • The compelling reason for the request and the reduced F&A Cost rate sought.
  • Evidence or citation of sponsor policy or practice that supports the request.

If the academic dean, institute director, or campus administrative officer approves the exception request, the request and documented approval should be submitted electronically to the SPA at least seven (7) business days in advance of the proposal deadline. SPA will review the request, in consultation with the Office of the Vice Chancellor for Research, and inform the Principal Investigator of the final determination of the applicable F&A rate electronically.

For Frequently Asked Questions related to this policy, see


The Vice Chancellor for Research may approve exceptions to this policy.

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