Facilities and Administrative Rate Policy

Abstract:
UAB is committed to ensuring that all Extramurally Funded Projects for Research, Instruction, Other Sponsored Activity, or any Other Institutional Activity conducted by UAB are classified appropriately and seek reimbursement of F&A at the applicable federally negotiated rate or an approved institutionally established rate.

Review/Revised Date: 08/02/2019

Category: Research

Policy Owner: Vice President for Research

Policy Contact:

INTRODUCTION

Facilities & Administrative Costs (also known as Indirect Costs, “IDC”, “IER”, Overhead, or “F&A”) are real costs of university operations associated with undertaking extramurally funded projects that cannot be directly charged to a specific project. They include costs such as departmental accounting and clerical support, data storage, network and IT support, equipment depreciation, building and facilities operation and maintenance, library, and general and sponsored projects administration. F&A cost rates are established by negotiation between The University of Alabama at Birmingham (UAB) and the U. S. Department of Health and Human Services (DHHS) and cover a specified period.

SCOPE

This policy applies to all requests for extramurally funded projects by faculty, staff, and trainees of UAB, per the Definition of a Principal Investigator, seeking external support for research and other sponsored activities using UAB resources and is intended to comply with 2 CFR 200, more commonly known as Uniform Guidance.

DEFINITIONS

Extramurally Funded Project: Any transaction or funding arrangement (grant, contract, agreement, award letter, etc.) to provide a defined deliverable such as a specified project plan, set of activities, described service, or statement of work with a reciprocal transfer of something of value (e.g., a monetary payment, drug, device, etc.) between UAB and an external entity. All Extramurally Funded Projects must be evidenced in writing and signed by UAB and the external entity. The agreement must specify the objectives, nature, terms, conditions, restrictions, and budget. Within UAB, all Extramurally Funded Projects are awarded through and accepted by the Office of Sponsored Programs (OSP).

Facilities and Administrative Costs (F&A): Costs that are incurred for common or joint objectives, and therefore, cannot be uniquely associated and specifically allocated to a particular Extramurally Funded Project, instructional activity, or any other institutional activity, but which are nonetheless incurred by UAB due to the project.

Fixed Price Grants or Contracts: Grants and contracts pursuant to which revenue is calculated as a flat rate per unit (for example, per case, per test, per patient) instead of being based on the cost charged to the grant/contract account.

Instruction: Except research training (which is classified as Research), all teaching and training activities of UAB, whether offered for credits toward a degree or certificate or on a non-credit basis, and whether offered through regular academic departments or separate divisions, such as a summer school division or an extension division. Instruction also includes both departmentally funded or university funded research.

Organized Research (Research): 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.

Other Sponsored Activities: Programs and projects which involve the performance of work other than Instruction and Research. Examples of such programs are health services projects, community service programs, and travel grants.

Other Institutional Activities: All activities of an institution except for instruction, departmental research, organized research, and other sponsored activities. Examples of such expenses include Service Centers and Governmental Relations.

On-Campus: Fifty percent (50%) or more of the Extramurally Funded Project is performed in facilities owned by UAB, and/or rent is not directly allocated in the project budget.

Off-Campus: More than Fifty percent (50%) of the Extramurally Funded Project is performed in facilities not owned by UAB and rent is directly allocated in the project budget.

Principal Investigator (PI)/Project Director (PD): Individual responsible for the scientific conduct and reporting as well as all budgetary decisions of an Extramurally Funded Project. PI/PDs should ensure that there are sufficient resources, such as investigator time, equipment, and space, and adequately trained lab personnel to carry out the project safely. Typically, a PD is the named head of a training or service provider program and has the same role and responsibilities as the PI.

Sponsor: For purposes of this policy, the sponsor is defined as the entity providing the extramural funding.

POLICY STATEMENT

UAB is committed to ensuring that all Extramurally Funded Projects for Research, Instruction, Other Sponsored Activity, or any Other Institutional Activity conducted by UAB are classified appropriately and seek reimbursement of F&A at the applicable federally negotiated rate or an approved institutionally established rate.

1. Every application for an Extramurally Funded Project must be submitted to OSP and must include reimbursement of F&A at a rate equal to the current federally negotiated rate or at an approved institutionally established rate.

2. Federally Negotiated Rates:  To identify the current applicable federally negotiated rate, please check UAB’s current rate agreement.

    a.  Depending on where the majority of the work is performed, On-Campus or Off-Campus rates may apply.

    b. The federally negotiated rate in effect at the time of initial award will be applied throughout the “life of the project”, unless the federally negotiated rate decreases. "Life of the project" means each competitive segment of a project. A competitive segment is a period of time approved by the funding agency at the point of the award. With respect to Fixed Price Grants or Contracts, the F&A rate applied during the project is applied to all remaining funds when the project account is closed.

    c. Pursuant to a negotiated and approved Fixed Price Grant or Contract, F&A is calculated and applied against expenditures as they occur, as well as to any unspent funds remaining in the project accounts at the conclusion of the project. The current federally negotiated rate will apply unless the project qualifies for an Institutionally Established Rate (see below).

3. Institutionally Established Rates: UAB has approved the following as institutionally established rates:

    a. Non-Profit Organization Rate.  If the sponsor is a legally constituted federal, state, or local government entity or not-for-profit entity (such as a foundation, society or health agency) and has a published and uniformly applied policy regarding the payment of F&A costs, UAB will apply the maximum rate allowed by the sponsor's policy. To secure this rate, documentation evidencing the sponsor’s published policy must accompany the proposal.

    b. Clinical Trial Rate.  The UAB clinical trial rate applies to extramurally funded clinical trials. The UAB clinical trial rate is based on components of the F&A cost reimbursement rate that are most closely associated with clinical trial activities. The clinical trial F&A cost is recovered as monies are received and is not dependent on expenditures. In order for a proposed clinical trial to be eligible for this rate certain criteria must be met. These criteria can be found here. If a study is reclassified as a standard grant or contract because it did not meet the UAB criteria for clinical trials, the federally negotiated rate for Other Sponsored Activity will apply instead.

    c. Continuing Professional Education (CPE) Rate.  This rate is for Accredited CPE programs developed by UAB's Continuing Education (CE) departments. Recovery of program costs are primarily through participant registration fees. In some instances, the CE department may obtain financial support to cover or help defray costs. In order to further facilitate professional education, those activities meeting the criteria will be assessed the CPE rate.

     d. Fee for Service Rate.  This rate applies to activities/services conducted in UAB facilities by UAB personnel that provide a service to an external entity for which a contract (contract contains audit and/or “return of funds” clause) is required by the outside entity or a research related service activity (such as a core or center) in which no new scholarly knowledge, hypotheses, or understandings are generated.

4. Budgets Prepared for an Industry/For-Profit Sponsor.  Each budget presented to a for-profit (industry) sponsor must be a “total cost budget” which combines both direct and F&A costs. Budgets itemizing direct costs and F&A costs are not to be presented to the for profit sponsor. For projects funded by a for profit sponsor, an additional "internal" budget with itemized direct costs and F&A costs must also be submitted to the Office of Sponsored Programs. The F&A rate will be the applicable federally negotiated rate unless the Non-Profit Organization Rate or the Clinical Trial Rate applies.

5. Distribution of F&A Reimbursement Revenue. F&A reimbursement revenue is identified with the primary faculty appointment unit of the Principal Investigator/Project Director. Any exceptions to this distribution must be documented using the F&A Cost Revenue Redistribution Agreement form available from OSP.

NONCOMPLIANCE

Failure to comply will result in voluntary cost-sharing by the primary department with which an Extramurally Funded Project is officially affiliated. The approval of all reviewers of the Checklist submitted to OSP constitutes their responsibility to provide those funds should noncompliance occur.

INTRODUCTION

SCOPE

DEFINITIONS

POLICY STATEMENT

NONCOMPLIANCE

IMPLEMENTATION