The University of Iowa's F&A cost-reimbursement rates -- the rates for reimbursing institutional overhead and other expenses associated with sponsored projects -- are determined through extensive calculation and formal negotiation with the federal government.

F&A Rate Decision Tool - Click for a tool to determine the appropriate F&A rate to apply to agreements

University of Iowa policy requires that applications for external funding request the maximum F&A cost-reimbursement rate possible:

  • Applications to Federal Agencies -- Must follow the federally negotiated rates outlined below unless the particular federal sponsor or solicitation specifies some other rate, in which case the applicant must request the maximum F&A reimbursement allowed by the particular sponsor/solicitation.
     
  • Applications to Industry and other For-Profit Entities -- Are also expected to abide by the federally negotiated rates outlined below, regardless of sponsor policy/solicitation guidelines. F&A cost waivers cannot generally be granted in relation to for-profit organizations, as such waivers mean the sponsor would not be reimbursing the University for the full cost of the project. A waiver in relation to a for-profit, then, would constitute a gift of public funds for private benefit, which is contrary to the UI mission and operations.
     
  • Nonprofit Organizations, such as Foundations and Societies -- Nonprofits generally don't reimburse F&A costs at the federally negotiated rates. In these cases, the UI adheres to the particular sponsor's policy, expecting the applicant to budget F&A at the maximum rate allowed by the sponsor and to provide documentation of the sponsor's published policy at routing. In cases where a nonprofit sponsor has no formal published policy on F&A cost reimbursement, the University will accept a rate of 15% of the Total Direct Costs (TDC).

To determine the F&A cost reimbursement, applicants must apply the allowable F&A cost-reimbursement rate to the budget "base." Please refer to the sponsor guidelines to determine the maximum F&A cost reimbursement rate and the base to which it applies. If unsure of the correct rate/calculation, please check with the UI Division of Sponsored Programs contact who works with the funding agency to which you are applying, or call the UI DSP office at 319-335-2123.

Federally Negotiated F&A Cost-Reimbursement Rates

Categories of Sponsored Projects
The Federally Negotiated Rate Agreement identifies four categories of projects: Organized Research, Instruction, Other Sponsored Activities, and Off-Campus.  Use the following F&A Rates for the appropriate category (see below for additional information) for budget start dates of 7/1/19 and beyond.  

Organized Research includes all externally funded research activities, both basic and applied, and all development activities. This also includes activities related to the training of individuals in research techniques (commonly called research training) where such activities utilize the same facilities as other research and development activities.

Instruction includes all teaching and training activities, except for research training, whether they are offered for credit toward a degree or certificate, on a non-credit basis, or through regular academic departments or by separate divisions, such as summer session.  Some examples of Instruction include:

  • Any project for which the purpose is to instruct any student at any location; recipients of this instruction may be UI students or staff, teachers or students in elementary or secondary schools, or the general public
  • Curriculum development projects at any level, including projects which involve evaluation of curriculum or teaching methods; such evaluation may be considered "research" only when the preponderance of activity is data collection, evaluation and reporting
  • Projects which involve UI students in community service activities for which they are receiving academic credit
  • Activities funded by awards to departments or schools for the support of students
  • General support for the writing of textbooks or reference books, video or software to be used as instructional materials.

Other Sponsored Activities include externally funded projects which involve the performance of work or activities that are not considered Organized Research or Instruction.  Some examples of Other Sponsored Activities include:

  • Support for conferences or seminars
  • Support for student participation in community service projects which do not result in academic credit
  • Support for projects pertaining to library collections, acquisitions, bibliographies or cataloging
  • Programs to enhance institutional resources
  • Demonstration projects,  (project to determine whether a specified change in policy or procedure results in increased efficiency, reduction in cost, improved delivery of services, etc.)
  • Health Service Projects that support the public
  • Community Service Programs
  • Consulting agreements
  • Fee-for-service agreements (unit provides a routine service as part of its normal business operations)

Definition of Off-Campus

The off-campus rate will apply for all activities:  a) Performed in facilities not owned by the institution and where these facility costs are not included in the F&A pools; or b) Where rent is directly allocated/charged to the project(s).  Grants or contracts will not be subject to more than one F&A cost rate.  If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project.

The on- or off-campus determination shall be based on the UI portion of project costs and not include costs of a collaborating entity (subrecipients). "Project" refers to the grant or contract award to the University of Iowa, not including collaborating entities.

Exceptions to Federally Negotiated F&A Cost-Reimbursement Rates
There are other common types of sponsored projects that result in F&A rates that are lower than the federally negotiated rates.  The following are UI accepted reductions in the rates.  For those not on this list, an F&A Rate Reduction form (link) must be completed.

  • State of Iowa Agreements
    An 8% F&A rate is applied to State of Iowa Agreements funded solely from State of Iowa funds (i.e., there is no other funding source paying the State of Iowa for the project or program).  

    When funding flows from the prime sponsor through the State of Iowa, the University’s F&A rate applicable to that prime sponsor will apply. An example of this would be when NIH funding is issued to the State of Iowa, and the State of Iowa then issues an agreement for funding to the University of Iowa using those federal funds.
  • Corporate (industry/for profit entity) Funded Clinical Trials (CFCTs)

    CFCTs evaluate an FDA-regulated drug, device or biological product AND are either

    • Clinical investigations as defined by the FDA in 21 CFR 50.3(c);
    • Clinical investigations as defined by the FDA in 21 CFR 312.3(b);
    • Phase 1, 2, and 3 IND clinical investigations as defined by the FDA in 21 CFR 312.21;
    • Phase 4 postmarketing studies as defined by the FDA in 21 CFR 312.85;
    • Investigations as defined by the FDA in 21 CFR 812.3(h) regarding IDE studies; or
    • Postmarket surveillance as defined by the FDA in 21 CFR 822.3(i) related to medical devices. 

      The University's F&A rate for all CFCTs is 30% of total direct costs (TDC). See University Policy Manual II-27.7(d)(1). If the corporate funder insists on paying a lower F&A rate (for example, 20%), 30% will still be applied and the investigator must decide whether the research can be performed for the amount that is available for direct costs.

      Non-interventional studies, including observational, registry and retrospective chart reviews, are not considered CFCTs for purposes of the University’s F&A cost rate, unless they satisfy any bulleted item above.
       
  • Federally Funded Clinical Trials
    The University’s Federally Negotiated Sponsored Research rate of 55.5% MTDC (Modified Total Direct Cost) applies to all federally funded clinical trials, whether the funds are awarded directly from the sponsor or flow through an intermediary sponsor.

Bases for Calculating Facilities & Administrative Costs
Once the F&A rate is determined, it is applied against the “base.”  Similar to the rate, the base may vary according to the type of project or sponsor.  The common bases are as follows:

  • Modified Total Direct Costs (MTDC)
    The F&A rate is applied to all direct costs minus the following:
  • Equipment
  • Capital expenditures
  • Patient care costs
  • Subcontracts over $25,000
  • Student tuition remission
  • Rental costs of off-site facilities
  • Scholarships and fellowships
     
  • Total Direct Costs (TDC)
    The F&A rate is applied to all of the direct costs.
     
  • Total Direct Costs Minus Exclusions
    The F&A rate is applied to all direct costs minus specific exclusions identified by the sponsor.  For example, some sponsors may specifically only allow F&A to be applied against salaries and wages.

Additional Information on F&A Costs