Facilities & Administrative Rate Submission

The University periodically renegotiates the Facilities and Administrative (F&A) rate with the federal government, through the Department of Health and Human Services (DHHS). This rate is applied to federal grants to offset the ‘overhead’ costs associated with research. Our rate is currently 58%. The rate calculation submitted June 30, 2015 demonstrates that our costs associated with research grants are 67.34%.

Creating the rate proposal requires effort across many parts of the University, coordinated by the Cost Analysis unit in the Comptroller’s Office. Detailed information must be gathered on buildings, personnel, utilities, equipment inventory, and other costs. Dozens of people are either directly or indirectly involved in the data collection before Cost Analysis uses the proprietary software CRIS to calculate the rate and create the hundreds of pages of unique reports required for the submission.

Although it is unlikely we will receive 67%, for every percentage point of change it will be worth approximately $1 million to the University in the first year of implementation (most likely fiscal year 2016). Under UFM, those funds will go directly to the schools doing the associated research. A negotiated rate is agreed to for a term of three to four years when implemented, so that new rate will most likely be in place until 2019.

The Cost Analysis team is Sara Tarkington, Yvonne Metheny, and John Wallace-Smith. For more information on F&A check out their FAQ page: http://www.virginia.edu/finance/finanalysis/FA_FAQ.html.