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Application of Facilities & Administrative Cost Rates

Background

The Facilities & Administrative (F&A) Rates (also called indirect cost rate or overhead) are established based on federal regulations.  The application of F&A rates allows New York University (NYU) to recover certain costs such as facilities, utilities and administrative costs that support sponsored programs, but are not easily identified with a specific project.

NYU Approach

All proposals must include NYU’s F&A rate, unless a reduced rate is granted by the Provost or a designee in accordance with NYU’s policy.  See Facilities and Administrative Cost Waivers.

Facilities & Administrative Cost Rates

The F&A rates in effect at the time of the initial award remain in effect throughout the life of the agreement.

Modified Total Direct Costs (MTDC) is the base to which F&A (indirect cost) rates are applied. The Negotiated Rate Agreement defines this base as follows:

  • Modified Total Direct Costs consist of all salaries and wages, fringe benefits, materials and supplies, services, travel, subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract)
  • Modified total direct costs shall exclude equipment, capital expenditures, charges for patient care, participant support costs, student tuition remission, rental costs of off-site facilities, scholarships and fellowships as well as the portion of each subgrant and subcontract in excess of $25,000

The off-campus F&A rate is applicable for projects that are conducted off-site (in a facility not owned or operated by NYU) for a consecutive period of 3 months or longer.

F&A Cost Proposal Process

F&A rates are based on actual F&A and direct costs from a prior year (the base year). There are different rates for Organized Research (OR), Instruction, Other Sponsored Activities (OSA) and off-campus.

Basics of F&A

F&A (indirect) Costs are those that are incurred for common or joint activities of the University and therefore cannot be identified readily and specifically with a particular sponsored project, instructional activity or any other University activity. A more detailed explanation of F&A costs are provided in the Costing Policy.

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