Similar to the overhead costs of a business, facilities and administrative (F&A) costs reflect actual expenses incurred in support of the UW's sponsored activities. F&A cost rates are based on the UW's actual operating costs. Using guidelines provided by the federal government, the UW captures and calculates F&A costs on a regular basis. These costs are allocated to different activities, such as research or teaching, proportionate to the benefit provided. Once all F&A costs are determined, the University determines the portion of costs that are related to sponsored activities. This information is then submitted to, and reviewed by, the Federal government, and F&A cost rates are negotiated approximately every 4-5 years.
The policies and regulations governing the establishment of F&A rates at the University of Washington are set forth in Uniform Guidance CFR 2, Part 200, Subpart E.
The University negotiates F&A rates with its cognizant agency, the Department of Health and Human Services (DHHS), Cost Allocation Services (CAS), San Francisco region.
Space Functional Use
Space data is one of the most important factors in determining the F&A rate. University facility costs are primarily allocated to University functions, such as instruction and research, according to how University space is utilized, or functionalized. It is therefore critical that every department accurately classify its space according to established functional use definitions. Click here for the FY 2013 space survey summary web page.
Operating expenses with similar characteristics or purposes are grouped into common cost categories or "pools." Each budget is classified as either direct costs or F&A costs. MAA uses these cost pools defined by Uniform Guidance CFR 2, Part 200, Subpart E to calculate F&A rates.
It is critical that academic units review cost pools assigned to their budgets and correct them as needed. A listing of all budgets and related cost pool assignments can be accessed using the University's Enterprise Data Warehouse reporting tools.
Allowable and Unallowable Costs
Specific costs are described in Uniform Guidance CFR 2, Part 200, Subpart E as allowable or unallowable. None of the "unallowables" or "non-reimbursable costs" may be allocated to research through F&A (indirect) cost pools or directly charged to sponsored programs. Uniform Guidance also specifies that for a cost to be allowable, it must be reasonable, allocable, and consistently treated, and it must conform to any limitations or exclusions specified in the sponsored agreement. Click here for a list of unallowable costs.
Departments should monitor whether any unallowable costs are incurred on their budgets. Departments should flag those transactions that meet the definition of an unallowable cost per Uniform Guidance CFR 2, Part 200, Subpart E.