NMSU’s Facilities and Administrative Rate (F&A) is negotiated with our cognizant agency, the Office of Naval Research (ONR).If NMSU accepts a project that does not pay the negotiated F&A rate, a source other than the agency will pay the difference between the negotiated rate and the rate the agency pays. This is referred to as waived F&A and can occur due to agency limitations (mandatory F&A cap) or proposed (voluntary waiver) by the PI.
VPR approval is required when voluntarily negotiating a discounted or waived F&A rate as it costs the Institution. The Request for Waiver of F&A or Voluntary Cost Share form is required to request this approval.
- F&A rate is applied to charges based on budget approved by the awarding agency
- Most common basis used to apply the rate – Modified Total Direct Cost (MTDC)
- MTDC = Total Cost – Financial Aid – Subcontract > $25,000 – Equipment – F&A
- Two F&A rates are calculated and recorded:
- ONR Rate: Federal negotiated and approved rate
- Agency Cap Rate: Maximum rate the agency will allow
- Approved F&A is recorded in account code 798100
- Waived F&A is recorded as Mandatory or Voluntary cost share using designated account codes 7982XX
- Account codes are determined and assigned at the time of award set-up
An example for typical costs expensed on an award with an agency capped rate of 20%:
| Direct Costs: | ||
| Salaries and Fringe | $ 500 | |
| Supplies | 200 | |
| Travel | 300 | |
| Subtotal MTDC | $ 1,000 | |
| ONR rate of 46% | $ 460 | (Debit to 798100-IDC General) |
| Waived IDC 26% | – 260 | (Credit to 7982XX-C/S IDC) |
| Total Billed to Agency | $ 1,200 | |
Direct Costs- Costs specifically identified to the objective with relative ease and a high degree of accuracy.
Indirect Costs- Costs incurred for common or joint objectives and therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.
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