Facilities and administrative (F&A) costs are defined as those costs that are incurred for common or joint objectives of the University, and therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. These costs are comprised of a number of components. Facilities includes depreciation and use allowances, interest on debt association with certain buildings, equipment and capital improvements, operation and maintenance expenses, and library expenses. Administration includes general administration and general expenses, departmental administration, and sponsored projects administration.
The F&A cost rates are negotiated with the University's cognizant federal agency, and they form the basis of the University's request for reimbursement of F&A costs on federally sponsored projects.
State legislation requires that all F&A cost recoveries generated from federally funded non-research activities be remitted to the State's General Fund. Since the University is not allowed to retain these funds, they are not considered for Incentive Fund calculation purposes.
For all other F&A cost recoveries, however, the University has established the following distributions for Non-PSA and PSA budget centers.
The amount of incentive funds to be awarded to budget centers is based on F&A cost recoveries generated during the prior twelve-month period of July 1st through June 30th.
When the negotiated rate (full on-campus rate) is used on a sponsored program, the budget center will be entitled to Incentive Funds in the amount of the departmental administration component of the negotiated rate. For most departments, this component represents 40% of the currently negotiated rate. Currently, though, the National Brick Research Center receives 100% of the rate, and CETL receives 80%.
The Budget Office receives quarterly "FACADM" spreadsheets from Accounting Services, which detail the F&A costs for that period. These spreadsheets are used to determine each budget center's incentive allocation annually. Once determined, the allocations are made to the budget centers' holding accounts; the budget centers are responsible for distributing the recoveries to the individual departments.
The F&A cost recoveries that are not returned to the academic budget centers as incentive funds are shared between central campus and the Chief Research Officer.
All F&A cost recoveries generated from sponsored activities performed by PSA budget centers and retained by the University will be returned to PSA.
The PSAG budget center receives the quarterly "FACADM" spreadsheets from Accounting Services as well to determine their incentive fund allocations. These allocations are made twice a year.