What are F&A, or indirect, costs?
OMB Circular A-21 which lists the Cost Principles for Educational Institutions gives the following definition of F&A costs: Definition of Facilities and Administration. F&A costs are broad categories of costs. “Facilities” is defined as depreciation and use allowances, interest on debt associated with certain buildings, equipment and capital improvements, operation and maintenance expenses, and library expenses. “Administration” is defined as general administration and general expenses, departmental administration, sponsored projects administration, student administration and services, and all other types of expenditures not listed specifically under one of the subcategories of Facilities (including cross allocations from other pools). EIU’s federally negotiated F&A rate is 42.5% of salaries and wages only. If another rate is specified in a program announcement, that rate supersedes the federally negotiated rate. Rates for state agencies and private foundations are usually specified in
“F&A” stands for facilities and administration, and the term is used interchangeably with “indirect costs.” These terms are defined as “…those expenses which cannot be specifically identified as solely benefiting one particular project, but instead are incurred in support of common or joint expenses which are derived from the administration and maintenance of the sponsored activities.” In universities, F&A costs are incurred for general support and management of the mission-related research/teaching/service enterprise. They are sometimes referred to as “pooled costs” because they are accounted for and controlled centrally. Examples are library costs, utility costs, costs of operating and maintaining facilities, and the cost of the general administration of the institution.
