Except where specifically identified in a program solicitation or other published sponsor guidelines, the applicable MSU federally negotiated Facilities and Administrative (F&A) rate should be used in computing F&A for a proposal. The F&A rate is applied using a Modified Total Direct Cost (MTDC) basis. MTDC basis means that equipment, graduate tuition & fees, participant support costs, capital expenditures, charges for patient care, space rental costs for off-site facilities, scholarships, and fellowships as well as the portion of each subaward and subcontract in excess of $25,000 shall be excluded from the total direct costs when determining the applicable basis amount.
F&A related to cost share: if the University offers to cost share a portion of the direct costs of a project, the F&A costs associated with those direct costs may also be used for cost sharing if not restricted by the RFA. Additionally, if the sponsor limits F&A costs, the difference between the full recovery of F&A cost and what is allowed by the sponsor may be shown as a University cost-sharing contribution if not restricted by the RFA (see 2 CFR §200.306(7)(c)).
Federally Negotiated Rates
The Facilities and Administrative (F&A) rates for the period beginning July 1, 2019 and ending June 30, 2023 have been negotiated with the Department of Health & Human Services (DHHS), under an agreement dated May 28, 2019. This is displayed in the table below.
|RATE APPLIES TO:
|7/1/19 - 6/30/23
|Other Sponsored Activities (MTDC)
The current rate agreement will continue to be used until a new rate agreement is established. For additional information on how the rates are calculated and applied, as well as historical rate information, please go to the F&A General Information and Historical Rates page.
Federal Cognizant Agency
When completing agency forms you may be asked for our Federal Cognizant Agency information. Agency Name: DHHS; POC Name: Matthew Dito; Phone Number: 214-767-3261.
Per the Federal Uniform Guidance requirements stated in §2 CFR 200.414(c)(1) and (c)(3):
“(c)(1) - The negotiated rates must be accepted by all Federal awarding agencies. A Federal awarding agency may use a rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification as described in paragraph (c)(3) of this section.”
“(c)(3) - The Federal awarding agency must implement, and make publicly available, the policies, procedures and general decision making criteria that their programs will follow to seek and justify deviations from negotiated rates."
Other Recognized Rates
F&A is typically an allowable cost to net against program income. Sponsor guidelines should be consulted to ensure this is proper treatment.
Some programs cap the F&A costs at 30% of Total Federal Funds Awarded (TFFA). See the USDA Sponsor Information link for more information on the specialized rate, as well as instructions on how to calculate TFFA.
State of Michigan
The vast majority of state agencies allow F&A at 20% total direct costs (TDC). However, when federal grant funds are being passed through the State of Michigan we can receive our full F&A rate. Please read your solicitation carefully.
Foundations and Non-profits
Many foundations and non-profits will not pay F&A costs, or they will only pay a reduced rate. Generally, MSU will accept the foundation or nonprofit rate provided the Office of Sponsored Programs is given a copy of their F&A policy, a link to their website stating their policy, or a letter/email from a senior official at the foundation/non-profit informing MSU of their policy. If the documentation is a letter/email from a senior official, it must clearly state the foundation/non-profit's policy and that it applies to all grant recipients. If the foundation/non-profit pays less than MSU’s full rate, then the rate charged will be based on total direct costs (TDC).
For-profit sponsors are expected to pay full F&A rates when funding specific research projects or other scholarly activity. Unlike foundations/non-profits, MSU will not accept a letter or other documentation from for-profit sponsors stating their policy is to pay a lower F&A rate than MSU’s federal negotiated rate. Instead, the PI must request a formal waiver to accept a lower F&A rate. If a waiver is approved, the rate charged will be applied to total direct costs (TDC).
Clinical Research and Clinical Trial Projects
Rates are dependent on who created/initiated the protocol and whether the funding source is federal or non-federal. Below is a table that details the rates:
|Sponsor initiated protocol
|MSU Investigator initiated protocol
When a for-profit company initiates and funds a clinical research/clinical trial project, the indirect cost rate is 26% TDC. Funding from a for-profit company to support a project that is initiated by MSU researchers does not fall within this exception and is subject to MSU’s full indirect cost rate unless a formal waiver is granted to accept a lower F&A rate.
To determine whether the on or off campus rate applies, review the budget categories to identify where the expenses will occur. The following budget categories are excluded from this analysis: equipment, space rent, subcontracts, and F&A. If the majority of the expenditures are incurred and/or used off-campus, then the off-campus rate applies to the full project.
There are some University locations that cause confusion in knowing whether to consider them on- or off-campus. The following locations should be considered off-campus when making your determination of using the on/off-campus rate:
- MSU Kellogg Center
- Henry Center
- MSU Extension facilities that are NOT owned by the University (please contact the MSU Extension Research Dean if a determination of ownership is needed)
- MSU AgBioResearch Field stations not located on the main East Lansing campus
- Community Music School in Detroit (East Lansing location is considered on-campus)
- CHM Traverse City
Indirect Cost Waiver/Reduction Protocol
Please allow a minimum of one week to process the request. Complex requests will require additional turn-around time, so plan accordingly.
Please initiate your F&A waiver or reduction request with your departmental chairperson. If the chairperson approves, he/she forwards the request to the college research associate dean. If the research associate dean approves, he/she forwards the request to the Office of Research and Innovation for consideration. It is critical to obtain both the department and college approvals because they both have a financial stake in accepting the waiver. The Office of Research and Innovation will review their recommendations and make a final decision. OR&I will notify the college and department of the final decision via email.
Request must include these items:
- Copy or URL for the Request For Proposal if appropriate. Please highlight the reference to IDC allowance.
- Proposal Development Number
- Budget for the full project period.
- Project abstract or brief description.
- Rationale for waiver.
- Proposal submission deadline.
- If the deadline does not allow for one week processing time at the central administrative level (OR&I), provide a brief statement as to why this request needs to be addressed as a RUSH.
The request and all necessary documentation must be emailed to email@example.com . Hardcopy requests/documentation will not be accepted.
The total direct costs that are multiplied by the F&A rate to determine the F&A costs.
Modified Total Direct Costs (MTDC)
MTDC means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs for off-site facilities, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. This definition was taken directly from the Uniform Guidance, Section 200.68.
For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s), the off-campus rate will apply. Grants or contracts will not be subject to more than one F&A cost rate. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project.
Total Direct Costs (TDC)
Total of the direct costs of the project budget.