Facilities and Administrative Rate

Facilities and Administrative Rate

Facilities and Administrative (F&A), also known as indirect or overhead, costs of the University are those expenses incurred for the common objectives of the University and are not easily identifiable with a particular project or activity. The Federal Government recognizes the importance of such infrastructure support and reimburses these costs through an accounting mechanism which applies the F&A rate to the direct costs of each project, so that each project pays its fair share of these support costs. For FY 2007, the total F&A recovery was more than $125 million

There are two broad categories for these expenses, as implied by its name: Facilities expenses and Administrative expenses. Each of these categories is broken down further into different cost pools, which are allocated to the main functions of the University by different allocation statistics.

The rates are determined by dividing the total allowable facility and administrative expenses of the University for each function, the numerator, by the modified total direct cost (MTDC) base, the denominator, for that function in the base year. The rate determined by the expenses allocated to the research function is used to recover the F&A costs that support research from the Federal Government. Yale University uses the Comprehensive Rate Information System (CRIS) software, purchased and supported by MAXIMUS to calculate these rates.

Yale negotiates one set of research rates for the University. There is an on-campus rate, an off-campus rate, a Connecticut Mental Health Center (CMHC) rate, and a rate for the Veterans Administration Hospital. The rate applied to a research project is determined by the location where the research is performed.  See 2/27/08 Rate Agreement included as Appendix C.

The F&A Rate Proposal is due on December 31st, following the base year, but it is a generally accepted practice by most Universities to request an extension to March 31st, because December 31st only allows a short timeframe to prepare the proposal once the fiscal year is closed (usually mid to late September). Contact Pauline Fagan at Pauline.Fagan@yale.edu, or call 785-4954

Definitions

Base Year

The base year is the fiscal year whose expenses will be used in the calculation of the F&A rate.

Cost Pools

There are nine F&A costs pools which must be allocated to the 4 functions of the University: (1) Building Depreciation, (2) Equipment Depreciation, (3) Building Interest and (4) Operations and Maintenance, which are Facilities cost pools and are allocated on square footage; (5) General Administration, (6) Departmental Administration and (7) Sponsored Projects Administration, which are all administrative pools and are allocated on MTDC; (8) Student Services Administration, which is part of the administrative pool, but is allocated based on Research Assistant FTE’s and (9) Library, which is allocated based on FTE’s and the breakdown of professional salaries by function, and is part of the Facilities rate.

The Administrative cost pools are capped at a total rate of 26%. The Facilities cost pools are not capped.

MTDC

The Modified Total Direct Cost (MTDC) base is the total expenses to which the Facilities & Administration (F&A) rate is applied to determine the amount of overhead charged to each sponsored award. In the aggregate the MTDC base is the denominator used in calculating the F&A rates submitted to the Division of Cost Allocation (DCA) of the Department of Health and Human Services (DHHS) for negotiation.

Space Survey Function

The Space Function Survey is the mechanism used to classify the square footage in the space management systems into the university functions and cost pools using the space function codes. There are two space management systems at the University, the Space Inventory System (SIS - used by the Yale School of Medicine (YSM)) and the Facility Administrative Management Information System (FAMIS – used by Central Campus). The Space Function Survey should be coordinated with the manager of the Central space information system, the manager of the Medical School space information system, the Shared Science Service Branch and YSM Financial Operations.

University Functions

The federal government defines four main University functions: Instruction (which includes departmentally funded research); Organized Research, Other Sponsored Activities and Other Institutional Activities.