How is the F&A rate that is charged to grants and contracts calculated?
The Cost Analysis group in Financial Administration submits F&A rate calculations to the federal Department of Health and Human Services (DHHS). The University and DHHS negotiate F&A rates to be used over a period of years based on these calculations. The negotiated F&A rates are to be used on most federal and industry grants and contracts. Other sponsors, including the State and private foundations, tend to limit, by their own policy, the F&A rate they are willing to pay. Federal training and fellowship grants, clinical trials and drug studies also limit the F&A rate. An F&A rate is expressed as a percentage. This percentage is multiplied by the appropriate costs on the grant or contract to determine the amount of F&A to be charged. The F&A is billed to the sponsor along with the other costs. For example, if the salaries and fringe benefits on a grant are $90,000 and other direct costs are $10,000 and the F&A rate for this grant is 50%, then the charges to the grant will be salaries a
