Facilities and Administrative Rate (F&A)

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:
    1. ONR Rate: Federal negotiated and approved rate
    2. 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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