How should I proceed if an agency does not allow F&A costs charged in a proposal budget?
Seton Hall University has a federally negotiated F&A cost agreement with the U.S. Department of Health and Human Services. Therefore, Federal agencies honor our F&A cost rate charges on grants and proposals. This is a common practice for most universities that receive Federal grant funding. Most New Jersey agencies do not pay F&A costs. You should check with the agency to confirm its F&A policy. Often, certain private foundations or companies will not allow F&A costs on a proposal or award. In this case, the Principal Investigator will need to obtain either a copy of the guidelines noting the exclusion of F&A costs or a statement from the funding agency. When a sponsor will only allow a reduced F&A costs rate (e.g. 8%), that rate should be charged against the TDC or Total Direct Costs. The TDC will include all costs in the budget, with no exclusions. For example, if the direct costs are $100,000 and the sponsor allows 8% of F&A costs rate, the F&A costs are $8,000 ($100,000 x 8%), and
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