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F&A Costs: FAQ

F&A Costs: FAQ

Definition and Use | Rate Table | Rate Agreement | FAQ

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1. How do I determine which rate to use for my project?
2. Does UIC have a "training rate"?
3. What is the graduate student tuition remission rate and how is it calculated?
4. If someone working on the grant is employed full-time but is devoting less than 50% effort to a project, can I use the part-time fringe rate?
5. I'm applying for a non-competing continuation. Do I keep the rates from the original award or change them to reflect the current rates?
6. I am applying for a renewal. Do I keep the rates from the original award or change them to reflect the current rates?
7. I am applying for a supplement. Which F&A rate do I use?
8. My sponsor limits their F&A rate. Do I need a waiver?
9. I once applied to an agency and they only paid 8% for indirect costs. I applied for another grant with them and assumed that they still only paid 8%, but I was wrong. They pay different rates for different programs and I didn't ask for the right amount of funds. What do I do?
10. I'm new at UIC and need to transfer a federal grant from another institution. What F&A rate do I use for the transfer year? What about subsequent years?
11. My sponsor requires cost sharing. If they don't pay our usual F&A rate, can I -consider the difference in the F&A as a portion of cost sharing?
12. Every NIH grant I apply for asks if we have an agreement with DHHS. Does UIC have a DHHS agreement?
13. How do you calculate F&A when subcontracts are included in the project? Do the other institutions charge indirect costs as well as UIC?
14. What does Modified Total Direct Cost (MTDC) and the term "base" amount mean?
15. How do you calculate a budget using Total Direct Costs (TDC)?
16. What F&A rate do I use for a clinical trial?

1. How do I determine which rate to use for my project?
It depends on the type of activity defined in the scope of work: organized research, instruction or other sponsored activities. Use the rate tables for guidance.

2. Does UIC have a "training rate"?
No. Generally, use the negotiated rate for instruction for training activities or the rate dictated by the funding agency in their guidelines.

3. What is the graduate student tuition remission rate and how is it calculated?
The graduate student tuition remission rate is 42% and is calculated by applying the rate to the salary and wages of the graduate student (excluding fringe benefits). The tuition amount is shown in the budget as a direct cost in most cases under "other expenses". Tuition is excluded from the total direct costs prior to applying the F&A rate.

For further guidance see http://tigger.uic.edu/depts/ovcr/research/proposals/policies/policies-ga.pdf

4. If someone working on the grant is employed full-time, but is devoting less than 50% effort to a project, should I use the part-time fringe rate?
Effort on a project is different from an individual's appointment. If an individual has a full time appointment the full fringe rate applies regardless of their effort on any given project.

5. I'm applying for a non-competing continuation. Do I keep the rates from the original award or change them to reflect the current rates?
Once a grant has been awarded, the F&A rate remains the same for the competitive life of the grant. However, the fringe benefit rate changes according to the institution's published rates.

6. I am applying for a renewal. Do I use the original F&A (indirect costs) rate and fringe benefits or the current rates?
The budget should reflect the current F&A and fringe benefit rates published at the time of the application.

7. I am applying for a supplement. What F&A rate (indirect costs) do I use when calculating the budget?
In most cases you would use the same rate as the parent grant unless otherwise stipulated by the funding agency. If the rate used is different from the parent rate, then the supplement must be set up in a separate account.

8. My sponsor limits their F&A rate. Do I need a waiver?
If the funding agency has a written policy limiting their F&A rate this will be accepted and will not require a waiver. The only exception would be in the case of a for-profit agency who indicates a limit on F&A. For profit agencies are required to pay the full, negotiated rate specific to the activity, i.e., research, clinical trial, testing, etc. Budgets reflecting less than the full F&A rate are calculated using total direct costs (TDC).

9. I once applied to an agency and they only paid 8% for indirect costs. I applied for another grant with them and assumed that they still only paid 8%, but I was wrong. They pay different rates for different programs and I didn't ask for the right amount of funds. What do I do?
Once you have submitted a budget to or have been awarded by a funding agency, it is not likely that there is room for negotiations to increase the F&A. When in doubt as to what rate to use, call ORS for guidance.

10. I'm new at UIC and need to transfer a federal grant from another institution. What F&A rate do I use for the transfer year? What about subsequent years?
Normally, the agency will accept for the first year the current F&A rate of the institution from which you are transferring. The budget for subsequent years should use UIC's negotiated rate.

11. My sponsor requires cost sharing. If they don't pay our usual F&A rate, can I consider the difference in the F&A as a portion of cost sharing?
Yes.

12. Every NIH grant I apply for asks if we have an agreement with DHHS. Does UIC have a DHHS agreement?
No. UIC's cognizant agency is the Office of Naval Research (ONR), therefore, our F&A agreement is with ONR.

13. How do you calculate F&A when subcontracts are included in the project? Do the other institutions charge indirect costs as well as UIC?
In calculating the budget that contains a subcontract or multiple subcontracts, UIC applies F&A costs to only the first $25,000 of the total costs of each separate subcontract. The other institutions develop their individual budgets to include direct costs plus their own negotiated F&A rate. The total cost of each subcontract is included in UIC's direct costs. See a sample budget.

14. What does Modified Total Direct Cost (MTDC) and the term "base" amount mean?
Modified Total Direct Costs consists of salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract). The base amount is the amount remaining from the total direct costs after applying the following exclusions: equipment (defined as having a useful life of over one year, and an acquisition cost of $500 or more per unit), capital expenditures, charges for patient care and tuition remission, rental costs, scholarships and fellowships, as well as the portion of each subgrant and subcontract in excess of $25,000. See a sample budget

15. How do you calculate a budget using Total Direct Costs (TDC)?
When calculating a budget using the TDC method there are no exclusions since we are not receiving our full rate. See a sample budget

16. What F&A rate do I use for a clinical trial?
On for-profit clinical trials, budgets are calculated using our most currently negotiated research rate, using a total direct cost (TDC) calculation. See a sample budget or the rate table.

On federally funded clinical trials, budgets are calculated using our most currently negotiated research rate, using a Modified Total Direct Cost (MTDC) calculation. See a sample budget or the rate table.