Indirect Costs /

Facilities and Administrative (F&A) Costs

F&A costs, formerly known as indirect costs and overhead, are costs which are necessary to support research and other sponsored projects, but which cannot be readily assigned to individual projects.

F&A costs include support costs related to facilities operations (utilities, maintenance, security, etc.), university and department libraries, departmental administration, and general administration. The University recovers F&A costs by applying a percentage rate to the monthly direct cost expenditures charged to sponsored project accounts. As discussed below, most direct costs are subject to the application of this rate, but there are some that are exempt. Sometimes, due to sponsor requirements, the F&A rate is applied to all direct costs without exception. Also, some federal sponsors place a cap on the rate that may be charged either to all of its awards or certain types.

The University's F&A rate is calculated in accordance with federal cost principles and is negotiated periodically by the University of Wisconsin System and the Federal government for Federal programs. 

The University has negotiated distinct rates for projects that are conducted on-campus and off-campus.

• Negotiated cost rates are as follows:

  • On-campus rate: 40.5% of all salaries, wages, and fringe benefits
    
  • Off-campus rate: 18% of all salaries, wages, and fringe benefits
    
    

• Negotiated cost rates for proposals submitted with start dates PRIOR TO July 1, 2003 are:

  • On-campus rate: 41.5% of all salaries, wages, and fringe benefits
    
  • Off-campus rate: 17% of all salaries, wages, and fringe benefits

• The off-campus rate applies if more that 50% of the project is performed off-campus in facilities not owned by the university.
• Inasmuch as F & A cost funds are intended to reimburse the University for these expenses, the specific project has no claim on them. However, as an incentive, it is University policy to assign 50% of the F & A costs from a grant to the College or Support Division from which the grant proposal originated.