Indirect Cost Rates

Facilities & Administrative (F&A) Costs

What are F&A Costs?

Facilities and Administrative (F&A) costs are those costs associated with the conduct of sponsored projects that are incurred for common or joint objectives and therefore are not readily identifiable with a specific project. 

These costs are legitimate costs incurred by the University in support of the performance of sponsored projects. Costs include items such as building maintenance, utilities/electricity, office supplies, telephone charges, etc.

F&A rates are the mechanism used to reimburse the University for these infrastructure costs associated with sponsored projects. F&A rates are assessed as a percentage of the direct costs of the sponsored projects. These are actual costs to the University and support sponsored projects being performed by the University. 

The appropriate F&A rate must be incorporated into all sponsored project budgets. F&A costs are also sometimes referred to as indirect cost (IDC) or overhead costs. 

To learn more about what a Facilities & Administrative Rate is, how the rate is generated, the distribution process, and how to use F&A funds, view the DRI Research BREAKS Session below, presented by Vice President Pam Padilla and Associate Vice President Aaron Roberts.

What if the sponsor has a limitation on Indirect Costs (IDC)?

The University of North Texas will honor a sponsor’s published or statutory limitations on recovery of indirect costs. The published guidance regarding the limitation should be included in the GRAMS funding proposal as documentation for the rate being used.

Do I use the On-Campus or Off-Campus rate?

If a majority of project activities occur at UNT facilities, then the on-campus rate is applied. If a majority of project activities occur at non-UNT facilities (including projects for which lease payments are direct charged to the project), then the off-campus rate is applied. Conferences, short-term collaboration travel, or working remotely (i.e.: from a home office) are not sufficient reasons to use the off-campus rate. When a UNT employee has an approved alternative work schedule to work remotely, their home office or remote-work location becomes an extension of the University campus and is considered to be a UNT facility.

When determining off-campus activities, work performed by subawards/vendors/consultants should not be taken into account. Only UNT’s activities should be reviewed when determining on-campus or off-campus.

How are F&A Costs applied to Project Expenses?

UNT’s federally negotiated F&A rates are charged against Modified Total Direct Costs (MTDC). Modified total direct costs exclude equipment, capital expenditures, charges for patient care, tuition remission, rental costs, scholarships and fellowships, as well as the portion of each subaward in excess of $25,000. Equipment is defined as an item having an acquisition cost of $5,000 or more and a useful life of more than one year.

How are indirect costs distributed? 

Since colleges and departments/units incur costs in supporting sponsored research, a portion of the indirect costs are distributed back to the associated units in order to support their continued involvement in sponsored activities. The distribution of the funds within each college will be based on the College’s determined distribution. Current Standard Distributions can be found in the PI Handbook. In the case of proposal/awards with more than one PI/Co-PI, the indirect cost distribution will be based on the PI/Co-PI Allocation of Credit listed in the electronic Funding Proposal.

What are UNT’s current F&A Rates?

Current University of North Texas F&A Rate Agreement
Policy on Recovery and Distribution of F&A: UNT Policy 13.003
The federal negotiated rate agreement identifies four categories of sponsored projects: Instruction, Organized Research, Other Sponsored Activities, and Off-Campus.

Organized Research Rate: 48.50%

Organized Research means all research and development activities of an institution that are separately budgeted and accounted for, including research training activities. It includes:

  1. Sponsored research means all research and development activities that are sponsored by Federal and non-Federal agencies and organizations. This term includes activities involving the training of individuals in research techniques (commonly called research training) where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.
  2. University research means all research and development activities that are separately budgeted and accounted for by the institution under an internal application of institutional funds.  University research, for purposes of this guidance, shall be combined with sponsored research under the function of organized research.

Instruction Rate: 48.00%

Instruction means the teaching and training activities of an institution (other than research training) whether they are offered for credits toward a degree or certificate or on a non-credit basis, and whether they are offered through regular academic departments or separate divisions, such as a summer school division or an extension division. 

  1. Sponsored instruction and training mean specific instructional or training activity established by grant, contract, or cooperative agreement. For purposes of the cost principles, this activity may be considered a major function even though an institution's accounting treatment may include it in the instruction function.
  2. Departmental research means research, development and scholarly activities that are not organized research and, consequently, are not separately budgeted and accounted for. Departmental research, for purposes of this document, is not considered as a major function, but as a part of the instruction function of the institution.

Other Sponsored Activities Rate (including Public Service): 31.50%

Other sponsored activities mean programs and projects financed by Federal and non-Federal agencies and organizations which involve the performance of work other than instruction and organized research.

(1) Examples of such programs and projects are health service projects and community service programs, as well as symposia and conferences that do not meet the definition of Instruction.

Off-Campus Rate: 26.00%

Off-Campus means a majority (>50%) of the sponsored project activities are conducted on premises, buildings, or property that is not owned by UNT, and the facility-related costs (rent, utilities, & other maintenance) are either directly charged to the project or occur without a cost to the university.

When determining off-campus activities, work performed by subawards/vendors/consultants should not be taken into account. Only UNT’s activities should be reviewed when determining on-campus or off-campus.