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. The UI's current rates, as outlined in the tables below, are drawn from the UI's latest federally negotiated Rate Agreement, dated 03/20/13.
University of Iowa policy requires that applications for external funding request the maximum F&A cost-reimbursement rate allowed by a sponsor. Applications to federal agencies must follow the federally negotiated rates outlined below unless a particular sponsor or solicitation specifies some other rate. Applications to industry or other for-profit entities are also expected to abide by the federally negotiated rate, unless the sponsor or solicitation disallows it. Nonprofit organizations, such as foundations and societies, generally don't reimburse F&A costs at the federally negotiated rates. In these cases, the UI does not require an applicant to budget above the rate allowed by the sponsor, but will expect the applicant to "document" the sponsor's reduced F&A cost-reimbursement rate by providing a copy of the sponsor's cost-reimbursement policy at routing.
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 7/1/11 and beyond.
Federally Negotiated F&A Rates
Other Sponsored Activities
Off-Campus -- All Programs
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
A project, or part of a project, is considered to be performed off-campus if the activity is conducted in a facility that is not owned by the University of Iowa and the facility-related costs (rent, utilities & other maintenance) are charged directly to the project or if the project is conducted at a location or facility at no cost to the university. The classification of off-campus is for the purpose of applying the correct Facilities & Administrative cost (indirect cost) rate.
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.
- Projects conducted partially off-campus
For projects performed both on and off campus, the off-campus rate applies to those projects where more than 50% of the personnel effort takes place off campus and the off campus portion occurs for more than 90 consecutive days.
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 from state funds and federal “block” grants. The University will also accept an 8% rate if both of the following criteria apply:
1. Federal funds flowing through the State of Iowa in which program eligibility does not allow for UI to apply directly; and
2. Project is service-related (as a vendor providing a public service or training function, as compared to doing research).
When funding flows from the prime sponsor through the State of Iowa and eligibility guidelines allow UI to apply directly, the University’s rate applicable to the prime sponsor will apply.
- Corporate and Industry Sponsored Clinical Trials
Corporate and industry sponsored clinical trials are studies supported by a corporation and which involve evaluation of a technology or product. These studies include Phase I-IV human studies.
The University's F&A rate for all industry-sponsored clinical trials is 25% of total direct costs (TDC). If the industry sponsor insists on paying a lower F&A rate (for example, 20%), 25% will still be assessed on the funds. The investigator must decide whether the research can be performed for the amount that is available for direct costs.
- Federally Funded Clinical Trials
The University’s Federally Negotiated Sponsored Research rate of 51% 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.
- Training Grants
Some agencies fund Training Grants to support a specific type of training program. Training Grants generally allow an F&A cost-reimbursement rate of 8%. The UI accepts this 8% rate only for programs officially designated as "Training Grants" by the granting agency and formally capped by governmental or non-profit sponsor policy. The Training Grant rate would not normally apply to programs supported by for-profit sponsors.
- External Waivers
With the exception of for-profit sponsors, if a solicitation or agency’s written guidelines specify an F&A rate less than the rate currently approved by the University, the rate is accepted as a University of Iowa approved external waiver. If a not-for -profit sponsor does not have a written policy on F&A recovery the University will accept an F&A rate of 10%.
- Specific Project Purposes
Projects under a select list of specific "purposes" are usually exempt from F&A costs. Application budgets are generally not expected to include institutional F&A cost reimbursement if the request is solely for one of the following budget categories:
- Equipment; or
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:
- 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.