Facilities and
Administration Costs UPPS
No. 03.04.05
(F&A or Indirect) Issue
No. 5
Effective
Date: 04/10/2013
Review:
September 1 E3Y
01. POLICY
STATEMENTS
01.01 The
purpose of this UPPS is to establish guidelines covering the allocation, management,
budgeting, expenditures and related restrictions associated with facilities and
administration (F&A) costs from sponsored programs. The Office of
Management and Budget (OMB) is responsible for establishing policies for
F&A costs under federal grants and contracts. Please refer to OMB Circular A-21.
Generally, the university follows the OMB
guidelines for all sponsored projects, regardless of the funding source.
01.02 Facilities
and administrative rates are established by the university’s cognizant
agency, the Department of Health and Human Services. The university posted a listing
of the most recent rates.
02. BACKGROUND
02.01 Most
funding sources allow Texas State University to charge to sponsored
programs its federally approved facilities and administration rate. Many of the allowed F&A
expenses are paid directly from the university’s educational and general
(E&G) funds; thus, it is appropriate for the funding source to reimburse
Texas State for the portion of those costs associated with sponsored programs.
The principal investigator
(PI), the department chair or school director, the dean, and the associate vice
president for Research and Federal Relations (AVPR) must make every effort to
recover as much of the F&A costs as possible for each sponsored program.
03. DEFINITIONS
03.01 Facilities and Administration Costs
– The term “facilities and administration” refers to those costs that the
university cannot charge to a grant or contract as a direct cost. These are the “overhead” or “indirect” costs for
operating the university that include, but are not limited to:
a. Electricity,
water, natural gas, and other utilities;
b. Payroll
processing, accounts payable, human resources and other support services;
c. Depreciation and
use allowances;
d. General
administration and general expenses;
e. Sponsored projects
administration expenses;
f. Operation and
maintenance expenses;
g. Library expenses,
departmental administration expenses and student administration expenses; and
h. Use of office
space, research labs, and other rooms.
03.02 Recovered F&A
Costs – F&A costs that have been collected by the university from funding
sources, excluding amounts billed, but uncollected.
03.03 F&A Revenues
– For purposes of this policy, F&A revenues are local university revenues
equal to the total F&A costs billed during a fiscal year including amounts
uncollected.
03.04 Institutes and Centers – The university may
establish institutes or centers at the department or school, college, or
university level in accordance with Academic Affairs PPS 1.14, Establishment and Review of
Centers, Institutes, and Academies. For
purposes of this UPPS, only those institutes or centers that are formally
established and approved by current Texas State policy as “university-level”
are qualified to directly receive F&A revenue. The current list of
university-level centers and institutes are listed on the Research homepage.
03.05 Commercialization
– The act of taking discoveries made during the conduct of sponsored programs
to a successful commercial venture.
04. PROCEDURES FOR DISTRIBUTION OF F&A
REVENUE
04.01 Each year, as part of the budget
development process, assistant vice president for Budgeting, Financial Planning
& Analysis with the assistance of the AVPR and the director of Sponsored
Programs, will estimate F&A costs recoverable in the coming fiscal year.
The estimate will take into account F&A revenue in the current fiscal year
as well as trends in grants and contracts activity. The annual operating budget
will include this estimate as revenue.
04.02 The Designated Fund group in the
annual operating budget will include F&A revenue expenditures in a total
amount equal to the estimate of F&A revenue included in the annual
operating budget.
04.03 The college, department or school,
and principal investigators will receive 25% of total F&A revenue as
follows:
a. When a single
investigator, department or school, and college are involved:
1) 30% to the college
(7.5% of total revenue)
2) 30% to the
department or school (7.5% of total revenue)
3) 40% to the PI (10% of total revenue)
b. When multiple
investigators, departments or schools, and colleges are involved:
1) 30% to the
colleges on a pro rata basis determined at time of proposal submittal (7.5% of
total revenue)
2) 30% to the
departments or schools on a pro rata basis determined at time of proposal submittal
(7.5% of total revenue)
3) 40% to the
principal investigators on a pro rata basis determined at time of proposal
submittal (10% of total revenue)
c. When a
university-level center or institute is the generating unit:
1) 25% to the center or
institute (6.25% of total revenue)
2) 25% to the PI
(6.25% of total revenue)
3) 25% to the college (6.25% of total revenue),
if applicable; if not, distributed equally to PI and center or institute; the
PI must indicate to Office of Sponsored Programs (OSP) that the appropriate
dean was included in the F&A revenues decision-making process.
4) 25% to the department or school (6.25% of
total revenue), if applicable; if not, distributed equally to PI and center or
institute; the PI must indicate to OSP that the appropriate chair or director
was included in the F&A revenues decision-making process.
NOTE: Distribution of 25% of the F&A revenue for non-academic grants is handled on a
case-by-case basis.
d. When a university chair is the single
investigator, or when multiple investigators including a university chair,
departments or schools, and colleges are involved:
1) 10% to the college (2.5% of total revenue)
2) 10% to the department or school (2.5% of
total revenue)
3) 80% to the PI (20% of total revenue)
NOTE: Those receiving returned F&A revenue should use
a portion of the funds for clerical support.
04.04 The provost and
vice president for Academic Affairs will receive 75% of total F&A revenue to
facilitate the growth and development of Texas State’s research enterprise.
Examples of how the provost might use such funds include: start-up funds,
proposal development, cost sharing, faculty incentive grants, etc.
04.05 Indirect Cost Recoveries from Sponsors of Commercial Activities –
Each fall, OSP will provide a report of all private, non-foundation sponsors to
the AVPR. The AVPR shall edit the report to include only those projects that
fund commercialization activities. OSP
will then distribute from university F&A funds, 75% of the total recovered
indirect costs from those sponsors to an account approved by the AVPR, who will
limit their use to the support of university commercialization and related
research activities.
05. ACCEPTABLE USE OF DISTRIBUTED F&A
REVENUE
05.01 It is Texas State’s intent to
expend 100% of F&A revenue funds to further the university’s research and
sponsored program efforts, which may include the following valid business
purposes:
a. Conducting
pre-grant feasibility studies;
b. Preparing
competitive proposals for sponsored programs;
c. Providing
carry-over funding for research efforts to provide continuity between
externally-funded projects;
d. Supporting new
researchers pending external funding;
e. Purchasing capital
equipment directly related to expanding the research capability of the
institution;
f. Research
administrative costs;
g. Commercialization
activities; and
h. Proposal support.
05.02 A sponsored program account may not accept expenditures
previously made under Section 05.01 d. above. Contact the Office of
Sponsored Programs (grants@txstate.edu)
for establishment of a “provisional” account for unusual situations that
require expenditures prior to formal approval of an award.
06. RESPONSIBILITIES
06.01 Responsibilities
associated with F&A revenue and F&A costs are as follows:
a. Principal
investigators:
1) Developing proposals which include budgets for
the recovery of F&A costs at the rate approved by the university’s cognizant federal agency.
2) Obtaining prior written approval from the
associate vice president for Research and Federal Relations for F&A rates
that are lower than the federally-approved rate. Refer to UPPS No. 02.02.01, Section 03.05 d. 1), Applying for Sponsored Programs.
3) Assuring
that F&A revenue allocated to them under this policy are expended in
accordance with state, The Texas State University System (TSUS), and university
requirements.
b. Deans,
department chairs or school directors, and other administrators:
1) Assuring that F&A revenue allocated to them
under this policy are expended in accordance with state, TSUS, and university
requirements.
2) Providing oversight to ensure that all sponsored
projects include the maximum allowable amount of F&A costs.
c. Office
of Sponsored Programs (OSP):
1) Assuring that F&A revenue is maximized.
Interest earnings will accrue to the university for cash
balances of sponsored programs that do not earn the full federal F&A
costs.
2) Approving F&A rates that differ from the
federally-approved rates.
3) Distributing F&A revenue in accordance with
this policy.
4) Reviewing reports (per Section 06.) to assure
F&A revenue is expended in accordance with applicable policies and
regulations and determining appropriate actions if reports are not provided.
5) Assuring that sponsored program expenditures are
recorded correctly, so as to achieve full and accurate recovery of F&A
costs. This includes some primary review of expenditures, as well as
coordinating with other departments or schools to assure proper coding.
6) Assuring that F&A costs are billed accurately
to the funding source and are collected, deposited, and recorded on a timely
basis.
7) Working to distribute F&A revenue.
8) Coordinating with the Office of Budgeting,
Financial Planning & Analysis to prepare budgeted F&A cost revenues for
the annual university budget.
9) Preparing (with input from appropriate offices)
the F&A rate proposal for submission to cognizant
agency.
d. Office
of Budgeting, Financial Planning & Analysis:
1) Budgeting
F&A revenue and associated expenditures in the annual university budget.
08. REVIEWERS
OF THIS UPPS
08.01 Reviewers of
this UPPS include the following:
Position Date
Associate Vice President for Research September 1 E3Y
and Federal Relations
Associate Vice President for Financial September 1 E3Y
Services
Assistant Vice President for Budgeting, September 1 E3Y
Financial Planning & Analysis
Director, Office of Sponsored September 1 E3Y
Programs
09. CERTIFICATION
STATEMENT
This UPPS has been approved by the following individuals in their
official capacities and represents Texas State policy and procedure from the
date of this document until superseded.
Associate Vice President for Research & Federal
Relations; senior reviewer of this UPPS
Provost and Vice President for Academic Affairs
President