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What is F & A?

Most institutions have a federally negotiated F & A (Facilities & Administration) rate that should be used on all proposals. IU's current F & A Cost Rates as well as the F & A Rate Agreement are available on the IU Rates page.

Because people are often curious, and more often confused, about these costs, this very brief explanation might help you better understand what they are and why they are important.

Facilities & Administration costs (formerly called "indirect costs" and commonly known as "overhead") are broad categories of costs. The following kinds of expenses are used to determine an institution's F & A rate.

Facilities

  • Depreciation and use allowances (buildings, capital improvements to land and buildings, and equipment)
  • Interest (interest on debt associated with certain buildings, equipment and capital improvements)
  • Operation and maintenance expenses (janitorial and utility services, repairs, furniture and equipment, grounds, maintenance and operation of buildings, security, disaster preparedness, environmental safety, hazardous waste disposal, insurance, planning and management, central receiving)

Administration

  • General expenses (such as those expenses incurred by administrative offices that serve the entire university system of which the institution is a part; central offices of the institution such as the President's or Chancellor's office, the offices for institution-wide financial management, business services, budget and planning, personnel management, and safety and risk management; the office of the General Counsel; and the operations of the central administrative management information systems)
  • Departmental administration expenses (these include administrative and supporting services that benefit common or joint departmental activities or objectives in academic deans' offices, academic departments and divisions, and organized research units. Organized research units include such units as institutes, study centers, and research centers.)
  • Sponsored projects administration (covers expenses incurred by a separate organization(s) established primarily to administer sponsored projects, including such functions as grant and contract administration, special security, purchasing, personnel, administration, and editing and publishing of research and other reports)
  • Library expenses (includes the cost of books and library materials purchased for the library, less any items of library income that qualify as applicable credits)
  • Student administration and services (such as administration of student affairs and services to students, including expenses of such activities as deans of students, admissions, registrar, counseling and placement services, student advisers, student health and infirmary services, catalogs, and commencements and convocations)
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