Facilities and Administration (F & A) Rates
To access the most current F & A rate information, please visit the Controller's web site at http://controller.tennessee.edu/grants.
* For the Knoxville campus, the School of Genome Sciences will use the off-campus rate.
** Rates are predetermined for 7/1/04 - 6/30/08 (After the latter date, researchers should contact OR to determine the current rate.)
*** Campuses other than Knoxville also apply their rates to Modified Total Direct Costs (MTDC), although different costs are included in each campus' MTDC. Contact the campus research administration office for further information on calculating F & A costs for non-UT sites.
F & A Costs
Facilities and Administrative (F & A) costs, formerly called indirect costs, are general University expenses associated with Sponsored Research, Instruction, and Other Sponsored Activities which cannot be easily associated with a particular project. The on-campus F & A costs for research include building use and depreciation, equipment use and depreciation, operation and maintenance, library, and administration. The on-campus instruction and other sponsored activities rates include all of the above, plus student services. The off-campus research, instruction, and other sponsored activities rates include only administration costs. The rates are proposed to and negotiated with the US Department of Health and Human Services (DHHS) Division of Cost Allocation and Liaison by the UT Executive Director for Budget and Finance.
For the Knoxville campus, F & A costs are applied to a base figure called Modified Total Direct Costs (MTDC). This base consists of salaries and wages, fringe benefits, materials and supplies, services, travel, and sub-awards up to $25,000 each. F&A costs should not be applied to equipment having a unit cost of $5,000 or greater, that portion of any single subcontract which exceeds $25,000, capital expenditures, rental costs of off-site facilities, scholarships and fellowships, patient care, or tuition remission. In some cases, the agency or other funding entity may specify, that some basis other than MTDC must be used as an F&A cost base.
The use of the on- or off-campus rate for F&A costs is determined as follows.
- If 50% of proposed salaries for UT personnel represents compensation for on-campus effort -- and if 50% represents off-campus effort -- the on-campus F&A cost rate will apply.
- If 51% or more of proposed salaries for UT personnel represents compensation for on-campus effort, the on-campus rate will apply.
- If 51% or more of proposed salaries for UT personnel represents compensation for off-campus effort, the off-campus rate will apply.
* Please note that the inclusion of a subcontract in a budget has no bearing on the applicable rate -- the applicable on- or off-campus rate is related solely to the compensation to be paid to University employees.
For all activities performed in facilities not owned by the University AND to which rent is directly allocated to the project(s), the off-campus rate will apply.
A rate of 28% should be used for estimating the cost of fringe benefits on proposal budgets. Actual charges made to an awarded grant or contract may vary from this rate, according to the actual rate earned for the staff on that grant or contract. Actual fringe benefit rates for senior faculty may reach as high as 35%. If you feel that 28% is too low for your particular proposal, you may use a higher percentage, but be prepared to document your request for a higher fringe benefit rate. Actual costs should be used in preparing proposals for personal service contracts (including career awards). Contact OR Grant and Contract Services staff to find out actual fringe benefits for specific individuals. Fringe benefits include the University's share of retirement contribution, FICA, workers' compensation, unemployment insurance, and health insurance.
Accounting Procedures for the New Equipment Capitalization Threshold
Effective July 1, 2000, the State of Tennessee increased the equipment capitalization threshold to $5,000. However, UT is required to maintain property records on “sensitive equipment,” which includes select items costing $1,000 - $4,999. This category includes computers, printers, audiovisual equipment, etc. To view these changes, click here.