Facilities & Administration Costs
On February 7th, the National Institutes of Health issued a notice adjusting the Facilities and Administration (F&A) rate for all ongoing and new NIH research awards to 15 percent, effective on February 10th. This new rate is significantly lower than the rates previously agreed upon by the NIH and UIC. The NIH notice has been challenged by multiple lawsuits and is currently subject to a temporary restraining order as litigation proceeds.
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How is the F&A rate determined?
F&A reimbursement for grants and contracts is governed by a highly regulated process that is audited by the federal government. A formalized process developed by the federal government is used to determine each university’s F&A rates for a negotiated multi-year period, based on a selected year of financial expenditures. UIC’s rates are negotiated with and approved by the Office of Naval Research. For more information, see the University of Illinois System page on Facilities & Administrative (F&A) Rates.
F&A funds, sometimes called indirect costs or overhead, are essential for UIC research.
These reimbursements cover critical infrastructure and personnel that ensure that our research is safe, secure and effective at fulfilling our mission of improving the world and saving lives.
F&A funds may pay for parts of the administrative infrastructure to support clinical trials, some educational and training costs to train the next generation of researchers and clinicians, facility maintenance, scientific instrumentation purchase and depreciation, processes of applying for and administering grants and many other crucial research functions. A reduction in the F&A rate will lead to reduced educational capacity, delayed facility improvements, inability to upgrade instruments, increased administrative burden on researchers and many other consequences.
What are F&A costs?
Facilities and Administration (F&A) costs are those incurred for common objectives of the university, as opposed to direct costs identified with specific projects or activities. F&A reimbursements from sponsors are distributed to university offices, departments and research compliance functions.
F&A costs include administrative functions, such as accounting, payroll, human resources, grant management, compliance, patient safety, cybersecurity and information technology systems. Facility costs include operations and maintenance for research spaces, animal care facilities, shared equipment and library services.
These resources are used mutually by UIC researchers, making it difficult to determine precisely which users should pay what share. Without financial support for these essential functions, research would become unaffordable.
Further Reading
For more information, see the following resources:
- The University of Illinois System’s “Overview of Facilities and Administrative Costs and Rates at UI”.
- The Association of American Universities’ “Frequently Asked Questions about Facilities and Administrative (F&A) Costs of Federally Sponsored University Research” and video explainer on F&A costs.
- The Association of American Medical Colleges’ “Facilities & Administrative Costs” page.
- The Association of Public & Land-Grant Universities’ “Research Facilities & Administrative Costs” page.
- The Council on Government Relations’ “F&A Cost Reimbursement Materials” page.
Infographic
An infographic on the costs of federally supported research created by the Association of American Medical Colleges, the Association of American Universities, the Association of Independent Research Institutes, the Association of Public & Land Grant Universities and the Council on Government Relations.