Estimating Costs for Budget
F&A (Indirect Costs)
Indirect costs are also known as facilities and administrative (F&A) costs. These are costs to a project that are difficult to allocate on a project-by-project basis such as utilities, space, equipment and building depreciation, time of personnel in Financial Reporting, Housekeeping, Human Resources, Sponsored Programs, etc. The Commonwealth of Virginia requires 70% of those recoveries to be spent on research and the enhancement of research and the university receives a portion of those (see below for distribution).
State and University policy requires that sponsors bear the full costs of conducting a sponsored project. Full costs include all direct costs and recovery of F&A (indirect) costs at the full rate determined in accordance with the OMB Circular A-21 and negotiated with our cognizant federal audit agency. Radford University's negotiated F&A rate agreement is with the U.S. Department of Health and Human Services.
PI's are required to budget the full applicable F&A rate unless (1) the sponsoring agency has a published policy limiting or excluding payment of F&A costs, or (2) the inclusion of F&A would jeopardize the funding of the proposal, and a full or partial waiver of F&A costs has been approved by the Provost.
F&A is only charged to the grant as money is spent. Indirect costs are applied to modified total direct costs to simplify the calculation. Modified total direct costs are the total direct costs of the project minus tuition and capitalized equipment, plus the first $25,000 of each subaward or subcontract..
The current break down of how F&A costs are distributed at Radford University is as follows:30% - State of Virginia
- 30% - State of Virginia
- 30% - RU SPGM Seed Program
- 15% – SPGM Operations
- 10% - Principal Investigator Research Support Account
- 10% - PI’s Department Chair Research Support Account
- 5% - PI’s College Dean Research Support Account
Cost Sharing or Matching Funds
Sponsors may require cost sharing or matching funds as an indication of the University's commitment to a project. Any cost to a project that is not supported by a sponsor is cost sharing, whether included in the proposal budget or not. Cost Sharing is comprised of all contributions to a project by parties other than the sponsor, including contributions of the University, subcontractors, and donations.
The University will cost share only when required by the sponsoring agency. Cost sharing should not be volunteered on proposals, either in the text or the budget section. Sponsor guidelines address required cost sharing or specifically state when cost sharing or University contributions increase the proposal's funding probability.
All cost sharing, whether mandatory or voluntary, must be adequately documented and approved in University records.