F&A Rate Description

For the current rate agreement dated May 9, 2016.
 
Component*
Organized Research
(FY2017)
Instruction
(FY2017)
Other Sponsored Activity
(FY2017)
1.
Building Depreciation
9.1
7.7
1.7
2.
Equipment Depreciation
2.8
2.8
1.2
3.
Interest
3.8
2.6
1.0
4.
Operations and Maintenance
11.9
10.5
4.7
5.
Library
1.6
1.4
1.4
6.
Utility Cost Allowance
1.3
0.0
0.0
7.
Administration
26.0
26.0
26.0
 
Total
55.5
51.0
36.0

*The F&A rate is negotiated as a single, total rate and not by component. The breakdown reflected here is determined by the University's cognizant agency, Department of Health and Human Services (DHHS), and should be considered approximate.

Description of Components

  1. Building Depreciation: The depreciation expense associated with University-owned buildings, excluding the expense associated with federal contributions to those buildings and the expense associated with any capitalized building cost pledged toward a cost sharing commitment. This component also includes the recurring lease costs for leased space, except when such costs are charged directly to sponsored projects. The proportion of total building depreciation/lease costs attributable to sponsored research activities is determined based on the functional classification of space by building.

  2. Equipment Depreciation: The depreciation expense associated with University-owned capital equipment, defined as items costing $5,000 or more and with a useful life of more than one year, excluding the expense associated with federal contributions to that equipment and the expense associated with any cost pledged toward a cost sharing commitment. The proportion of total equipment depreciation costs attributable to sponsored research activities is determined based on the functional classification of space by room.

  3. Interest: Interest cost associated with external debt financing of building acquisition, construction or renovation, less any interest income earned on debt proceeds, identified by building. The proportion of total interest costs attributable to sponsored research activities is determined based on the functional classification of space by building.

  4. Operations and Maintenance: The cost of utilities, janitorial services, ongoing repair and maintenance of University owned buildings and leased space (when not provided by the lessor), and other regular Facilities Management services provided for the upkeep of the University's physical properties (when not considered capital projects). Also includes the Facilities Management services provided to individual departments; the operations of the University Police, Risk Management (Safety Division), Research Safety and Hazardous Waste Disposal; and University network services. The proportion of total operations and maintenance costs attributable to sponsored research activities is predominantly determined based on the functional classification of space by building.

  5. Library: The operations costs of the University's main library, excluding rare books, as well as the Galter Health Sciences Library, the Pritzker Legal Research Center, and the Engineering and Science Library. The proportion of total library costs attributable to sponsored research activities is determined based on an estimate of weighted full-time equivalent library users and the functional classifications of their salaries and wages.

  6. Utility Cost Allowance: An automatic percentage-point allowance granted to institutions that formerly conducted special utility cost studies (which are no longer permitted).

  7. Administration: This component represents three (3) categories of administration, described below, and is capped by OMB Circular A-21 at 26%.

    1. General Administration (GA): The costs associated with the University's general executive and administrative offices including the President, the Provost, General Counsel, Vice President for Business and Finance (including the Budget, Controller, Auditing, and Human Resource offices), Administration and Planning, and a majority of the Information Technology operations. The proportion of total GA attributable to sponsored research activities is determined based on the modified total cost of all activities (primarily Instruction, Sponsored Research, Other Sponsored Activities, and Other Institutional Activities).

    2. Sponsored Project Administration (SPA): The costs of the offices responsible for administering sponsored project activity, including the Office of Research, the Office for Sponsored Research, and Accounting Services for Research and Sponsored Programs. The proportion of total SPA attributable to sponsored research activities is determined based on the proportion of those activities to modified total sponsored project activities (which includes sponsored research, sponsored training, and other sponsored activities).

    3. Department Administration (DA): The administrative costs of the Deans' Offices and the administrative activities of each of the departments within the schools. The proportion of total DA attributable to sponsored research activities is determined based on the proportion of modified total cost of all activities for each department.

**Special note regarding Department Administration: This component includes the salaries, fringe and other related costs associated with the activities of the chairpersons, assistant chairpersons, center/institute directors, and their administrative staffs. It also includes the non-labor costs associated with department administrative operations that benefit multiple department activities (teaching, research, service, etc.) and/or cannot be directly charged to federally sponsored projects. Such costs include (but are not limited to) office supplies, most department copying, books, recurring basic telephone expense, postage, general purpose equipment, and membership dues. It is important that costs of this nature are properly treated as indirect costs (charged to non sponsored accounts), unless an exceptional circumstance can be demonstrated that justifies and is approved by the sponsor for direct charging to a sponsored account.