Northwestern University F&A Rate Agreement

Northwestern University F&A Rate Agreement: Understanding the Basics

Northwestern University, like many other research institutions, receives funding from various sources, including federal grants, private organizations, and industry partners. To ensure that the university can uphold its commitment to excellence in research and scholarship, it has established a Facilities and Administrative (F&A) rate agreement that allows it to recover indirect costs associated with sponsored projects.

What is an F&A rate agreement?

An F&A rate agreement is a contract between an institution and a funding agency that sets the percentage of indirect costs that can be recovered from sponsored projects. Indirect costs are those expenses that cannot be directly attributed to a specific sponsored project, such as facility use, utilities, and administrative support.

The F&A rate agreement provides a uniform, transparent, and auditable method to calculate indirect costs. It ensures that the indirect costs of a project are spread equitably across all sponsored projects, rather than being borne entirely by a single project.

How does Northwestern University`s F&A rate agreement work?

Northwestern University`s F&A rate agreement is negotiated with the Department of Health and Human Services (DHHS), which includes the National Institutes of Health (NIH), the largest source of federal funding for research. The current F&A rate is 55 percent of modified total direct costs (MTDC).

MTDC includes all direct costs of a project, such as salaries and benefits, supplies, and travel, but excludes certain expenses, such as equipment, capital expenditures, and subcontractor costs over $25,000. The F&A rate is applied to the MTDC to calculate the indirect costs that can be recovered.

Why is the F&A rate important?

The F&A rate is critical to the sustainability of research institutions like Northwestern University. It helps to ensure that the university can recover the indirect costs of sponsored projects and continue to provide the necessary infrastructure, administrative support, and other essential resources to conduct world-class research.

Without the F&A rate, the indirect costs of a project would have to be paid out of the direct costs, reducing the project`s funding and potentially limiting its scope or impact. This would also create an inequitable burden on certain projects and discourage collaboration and innovation.

In conclusion, Northwestern University`s F&A rate agreement is an essential component of its research enterprise, providing a fair and transparent method for recovering indirect costs associated with sponsored projects. By understanding the basics of the F&A rate, researchers can ensure that their projects are well-supported, and the university can continue to advance knowledge and discovery in various fields.

Shopping Cart