Research and Sponsored Projects Manual (RSP)

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Effective: 1/6/1986

Revised:7/1/2012

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RSP 508–02: Facilities & Administrative Costs

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Purpose

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To require the use of the federally negotiated facilities & administrative rates on all sponsored projects

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Sources

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Office of Management and Budget (OMB) Circular A-21 Revised, Cost Principles for Educational Institutions
Cost Accounting Standards Board Disclosure Statement Form DS-2, revision #3, March 15, 2004
Office of Knowledge Enterprise Development (OKED)

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Policy

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ASU applies the fully burdened F&A rate on sponsored projects whenever ownership of intellectual property is granted to sponsors. All other sponsored projects must use the federally negotiated rates. These rates are charged throughout the sponsored project’s period of performance, however, competitive renewal applications must include the most recently negotiated rates.

F&A cost rate agreements are negotiated every four years with the U.S. Department of Health and Human Services, Division of Cost Allocations. In accordance with the university’s Facilities & Administrative rate agreement, indirect costs are calculated by applying the negotiated F&A cost rate to modified total direct costs (MTDC) expenditures on each project. In accordance with federal regulations, these cost rates are legally binding.

In some cases, sponsors limit the F&A charges that they will allow on grants and other assistance agreements.

Agency Limits

ASU will not endorse proposals to, nor accept awards from, these sponsors, unless the principal investigator (PI) provides evidence confirming that it is the policy of the funding agency to uniformly limit the F&A on all awards.

Exceptions to Full Recovery

In some cases, the OKED will waive the requirement if a compelling argument is made to justify the university’s investment in the project. Favorable consideration will be given to the following:

  1. projects that lead to funding from sponsors that do not restrict F&A charges
  2. projects that support research capacity growth in strategic areas

    or

  3. projects that promise greater quantifiable recognition for ASU.

Should principal investigators wish to request a waiver to this policy, they must submit a one-page, written justification with a budget to the associate vice president for research through their department chair and dean (or equivalent), in which they address items 1, 2, and 3 in the preceding paragraph and explain how accepting the award will support their research and teaching.

Note: Projects receiving a waiver of full F&A recovery are not eligible for Research Incentive Distribution (see RSP 106, “Allocation of Recognition, Research Incentive Distribution, and Investigator Incentive Awards”).

Federal Program Limitations

Federal programs with agency mandated F&A rate limitations (e.g., U.S. Department of Education, NIH Training Grants, NSF Research Experience for Undergraduates) will receive an automatic waiver.

Note: Projects that meet this criterion are eligible for Research Incentive Distribution (see RSP 106, “Allocation of Recognition, Research Incentive Distribution, and Investigator Incentive Awards”).

Arizona Board of Regents (ABOR) Program Limitations

Arizona Board of Regents grant-supported programs mandate F&A limitations (e.g., Learner Centered Education, Arizona Regents Reach Out) and will receive an automatic waiver.

Transfers

Award transfers from other institutions with lower F&A rates than ASU will retain the lower rate throughout their period of performance. If the transferred award is a federal/sub-federal grant that has a higher rate than ASU, ASU’s negotiated rate will be applied. Funds will be rebudgeted to the extent allowed by the sponsor.

For more information on how RSP policies are implemented during each phase of a project, see the ORSPA Web site.

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Cross-Reference

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For additional information, see RSP 106, “Allocation of Recognition, Research Incentive Distribution, and Investigator Incentive Awards.”

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