Update on FY27 Fringe Benefit Rates

Dear Colleagues,

I would like to provide an update regarding Drexel University’s FY27 fringe benefit rate proposal submitted to the U.S. Department of Health and Human Services (HHS) Cost Allocation Services division.

As communicated in the December 12, 2025, announcement regarding the FY27 proposed fringe benefit rates, the University submitted the proposal to HHS for review and anticipated that final approval could take several months.

At this time, the proposal remains under federal review and has not yet been assigned to a negotiator. HHS has indicated that staffing challenges may further delay completion of the review process beyond July 1, 2026.

In recent correspondence, HHS advised that institutions may continue using their currently approved provisional rates or may implement proposed rates pending completion of the federal review process.

Accordingly, Drexel is proposing to implement the FY27 fringe benefit rates proposed, effective July 1, 2026, while the federal review remains pending. As previously communicated, Coeus and Banner were updated to reflect these proposed rates.

Please note the following:

• The FY27 rates remain subject to final federal review and approval and may change as a result of the negotiation process.

• Any adjustments resulting from the federal review would be incorporated into the FY28 fringe benefit rate calculations and related carryforward methodology.

• Additional guidance will be communicated if material changes occur during the federal review process.

Thank you for your patience and cooperation. Please feel free to contact Research Accounting Services at ras@drexel.edu with any questions.

Thank you.