Why does the university charge for Facilities and Administration (“F&A”) (aka indirect costs or overhead) costs?
The university charges F&A on all projects sponsored through third parties such as pharmaceutical companies or through government grants. The F&A rates are based on formulas to recover the costs associated with the extramurally funded project that cannot readily be assigned to one particular project. UCLA is a non-profit state funded entity and cannot subsidize private industry sponsored research. Therefore the full cost of performing such research must be reimbursed, including direct and indirect (or overhead) costs.
