Facilities & Administrative (F&A) Rates
Facilities and Administrative (F&A), also known as indirect or overhead, costs of the University of Illinois System are those expenses incurred for the common objectives of the system and are not easily identifiable with a particular project or activity.
F&A Costs provide each university with a significant source of institutional funding. The F&A rate is the mechanism used to reimburse the university for the administrative and infrastructure support costs associated with sponsored research and other sponsored projects. It is essentially an overhead rate.
There are two broad categories for these expenses, as implied by its name:
Facilities Expenses
Facilities expenses include various facility costs such as building and equipment depreciation, interest, operations and maintenance including utilities, library, etc.
Administrative Expenses
Administrative expenses include costs related to various university operations such as general university administration, sponsored projects administration, department administration, and student services administration.
Our sponsors recognize the importance of such infrastructure support and reimburse these costs through an accounting mechanism which applies a F&A rate to the modified total direct costs of each project, so that each project (federal and non-federal) pays its fair share of these support costs.
F&A Proposal Process
Proposals are performed based on a specified fiscal year of actual historical expenditures, space, fixed asset depreciation, and more.
The process to calculate, audit, negotiate, and obtain approval for F&A rate proposals is a time intensive process that involves numerous projects and takes approximately two years to complete. Currently, F&A rate proposals are prepared for each of the universities once every four years.
To learn more about F&A Rates, refer to Overview of Facilities and Administrative Costs and Rates at University of Illinois.
Once F&A rate proposals are compiled:
- They must to be submitted to Office of Naval Research (ONR).
- ONR then contracts with the Defense Contract Audit Agency (DCAA) to perform an audit of the F&A rate proposal submission(s).
- ONR then reviews the DCAA audit report and uses it as a negotiation tool to negotiate final F&A rates.
- Once final negotiated rates and rate periods are determined, ONR issues a formal pre-determined F&A rate negotiation agreement between ONR and the Universities which outlines the maximum rates the universities are permitted to charge sponsored projects during the fiscal years specified.
Distribution of F&A Recoveries
System Government Costing’s responsibilities do not include distribution of F&A recoveries. For information related to the distribution of F&A recoveries, contact the following offices:
UIUC Office of the Provost
UIC Office of Budget & Financial Analysis
UIS Vice Chancellor for Academic Affairs and Provost