NYU F&A Rate Agreement: Understanding Indirect Cost Rates for Sponsored Projects

One of the most important aspects of managing sponsored projects at NYU is understanding the indirect cost rates associated with grant funding. These rates, also known as Facilities & Administrative (F&A) or overhead rates, are essential to ensuring that sponsored projects are budgeted correctly and that indirect costs are appropriately recovered.

What is an F&A Rate?

Simply put, the F&A rate is a percentage of the total direct costs of a sponsored project that is added on top of the direct costs to cover the indirect costs of conducting the research. These indirect costs include administrative expenses, such as accounting and payroll, as well as facilities costs, such as rent and maintenance.

Why is the F&A Rate Important?

The F&A rate is important because it helps ensure that all of the costs associated with a sponsored project are adequately covered. Without this added funding, NYU would have to cover indirect costs out of pocket, which would put a strain on the university’s resources and potentially limit the number of projects that could be undertaken.

Additionally, the F&A rate helps ensure that all sponsored projects are treated fairly and equitably. By using a standardized rate for all sponsored projects, NYU can ensure that each project has a fair and equitable allocation of resources.

What is NYU’s F&A Rate Agreement?

NYU’s F&A rate agreement outlines the standard F&A rates that are applied to sponsored projects based on the type of funding and the location where the research is conducted. The agreement also outlines the process for negotiating alternative rates for projects that do not fit within the standard rate structure.

The current F&A rate agreement for NYU was negotiated with the US Department of Health and Human Services (HHS) in 2019 and covers all sponsored projects at the university.

What are NYU’s F&A Rates?

The standard F&A rates for sponsored projects at NYU are based on the type of funding and the location where the research is conducted.

For projects conducted on the NYU Washington Square campus, the F&A rate is:

– 60% of modified total direct costs (MTDC) for research grants and cooperative agreements

– 35% of MTDC for all other sponsored agreements, including contracts, gifts, and donations

For projects conducted at other NYU locations, such as the NYU Abu Dhabi or NYU Shanghai campuses, the F&A rate is:

– 40% of MTDC for research grants and cooperative agreements

– 35% of MTDC for all other sponsored agreements, including contracts, gifts, and donations

It’s important to note that these rates are subject to change based on negotiations with funding agencies and any updates to the F&A rate agreement.

How to Include F&A Costs in Your Proposal Budget

When preparing a proposal budget for a sponsored project, it’s important to include F&A costs in your budget. These costs should be included as a separate line item in your budget and should be calculated based on the F&A rate for your specific project.

To calculate the F&A costs for your project, simply multiply the total direct costs by the F&A rate for your project. For example, if your total direct costs are $100,000 and your F&A rate is 60%, your F&A costs would be $60,000, for a total project budget of $160,000.

In conclusion, understanding the F&A rate agreement is an essential part of managing sponsored projects at NYU. By ensuring that all indirect costs are adequately covered, NYU can continue to conduct groundbreaking research and make a positive impact on the world.