Finalized Fiscal Year 2024-2027 Facilities and Administrative (F&A) Rates for Sponsored Projects
We are pleased to announce that Drexel University has finalized its Facilities and Administrative (F&A) rate negotiation with the Department of Health and Human Services' Cost Allocation Services. The table below outlines the new rates. This information has also been posted on the Comptroller's Office website, along with the actual PDF of the rate agreement and the rate componentization. Please note that these rates are strictly applicable to awards made directly to Drexel University. Awards for the Academy of Natural Sciences are subject to their specific rate agreement. The Academy of Natural Sciences' rates for FY25 are being finalized and we will communicate their rates separately when finalized.
| Rate Type | 7/1/2023-6/30/2024 | 7/1/2023-6/30/2024 | 7/1/2024-06/30/2026 | 7/1/2024-06/30/2026 | 7/1/2026-6/30/2027 | 7/1/2026-6/30/2027 |
|---|---|---|---|---|---|---|
| On-Campus | Off-Campus | On-Campus | Off-Campus | On-Campus | Off-Campus | |
| Organized Research | 51.50% | 26.00% | 52.00% | 26.00% | 52.50% | 26.00% |
| Organized Research-Department of Defense Only | N/A | N/A | 54.00% | 28.00% | 54.50% | 28.00% |
| Instruction | 49.00% | 26.00% | 51.00% | 26.00% | 52.00% | 26.00% |
| Other Sponsored Research | 40.50% | 26.00% | 41.50% | 26.00% | 42.50% | 26.00% |
| Intergovernmental Personnel Act | N/A | 8.50% | N/A | 8.50% | N/A | 8.50% |
In order to ease your transition to the new F&A rates, the following frequently asked questions have been developed to guide you:
1. Why have the F&A rates changed?
The F&A rate is negotiated between Drexel University and the Department of Health and Human Services Cost Allocation Services. Drexel submitted its last proposal in December 2022 using its base year activities from fiscal year 2022 (July 1, 2021, to June 30, 2022). From this data, our rates for organized research, instruction, and other sponsored activities were derived. You can see the make-up of the rates by component part on our website. Our next F&A base year is FY2026, and the proposal is due to be submitted by December 31, 2026.
2. Why are the different on-campus rates changing over the life of the F&A rate agreement?
The Department of Health and Human Service Cost Allocation Services is Drexel's cognizant agency. It is their protocol to covert our provisional rates for the past fiscal year a final predetermined final rate. Our on-campus rates are being increased effective July 1, 2024, and then again on July 1, 2026. Obtaining an increase in our F&A rates over the life of the agreement is in the best financial interest of the University.
3. When should I start using the new rates in my proposals?
The new rates should be used immediately. Coeus has been updated to reflect the new rates according to the table above.
4. I am submitting a supplemental proposal for an existing award. What rate should I use to prepare the budget for this proposal?
Utilize the appropriate type of rate (i.e. organized research, instruction, other sponsored activities) for the proposal and the rate applicable to the time period of the proposal.
5. The research rate changes over the time period of my proposal. How should I incorporate it in my proposal?
The rates should be applied based on the effective dates of the rate in the agreement.
Example 1:
5-year Organized Research Proposal with Noncompeting Renewals
Start date of May 1, 2024
| Budget Period | F&A Rate Applicable |
|---|---|
| 5/1/2024-6/30/2024-Year 1 | 51.50% |
| 7/1/2024-4/30/2025-Year 1 | 52.00% |
| 5/1/2025-4/30/2026-Year 2 | 52.00% |
| 5/1/2026-6/30/2026-Year 3 | 52.00% |
| 7/1/2026-4/30/2027-Year 3 | 52.50% |
| 5/1/2027-4/30/2028-Year 4 | 52.50% |
| 5/1/2028-4/30/2029-Year 5 | 52.50% |
Example 2:
3-year Instructional Research Proposal with Noncompeting Renewals
Start date of January 1, 2024
| Budget Period | F&A Rate Applicable |
|---|---|
| 1/1/2024-6/30/2024-Year 1 | 49.00% |
| 7/1/2024-12/31/2024-Year 1 | 51.00% |
| 1/1/2025-12/31/2025-Year 2 | 51.00% |
| 1/1/2026-6/30/2026-Year 3 | 51.00% |
| 7/1/2026-12/31/2026-Yewar 3 | 52.00% |
6. What rate should I use for competing renewal application?
Competing renewal applications should use the appropriate F&A rate specified in the new rate agreement, regardless of the rate that was applied to the previous segment. You should determine when the new segment is expected to start and use the rate(s) that is(are) effective for the budgeted proposal period.
7. What happens if I am submitting a proposal that includes a budget year starting beyond 6/30/2027?
You should use the rates in place as of 6/30/2027. For example, a research project with a budget period that begins 7/1/2027, should use the 52.50% rate. This rate would be utilized for all periods after 7/1/2027, until a new F&A rate is negotiated.
8. My application was previously submitted at 51.5% F&A rate before the notification of the new rates. Is my award going to be impacted by the new increased rate of 52.00% effective 7/1/2024?
Based on the Uniform Guidance, awards that were made using the provisional rate of 51.50% during the period of 7/1/2023 to 6/30/2024, must be adjusted to the negotiated rates for the competitive segment that was awarded at the provisional rate. Thankfully, the final negotiated rate for the time period of 7/1/2023 to 6/30/2024, is the same 51.50 rate. Therefore, no rate adjustment for that time period is necessary. To break this down further:
- 1. Grants awarded before 7/1/2023, remain as awarded and will utilize the 51.50% for the remainder of the competitive segment.
- 2. Grants awarded while the provisional rate was in place (7/1/2023 to 6/30/2024) will be adjusted to negotiated rates. Therefore, an organized research award, will have a rate applied to it for the period of 7/1/2023-6/30/2024 of 51.50% and then beginning on 7/1/2024, the rate will be increased to 52.00%, and then will be adjusted again on 7/1/2026, to 52.50% and will remain at that rate until the end of the competitive segment.
- 3. Grants awarded after 7/1/2024, will be subject to the negotiated rates.
The following is excerpted from Uniform Guidance-Appendix III to Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs):
- C. DETERMINATION AND APPLICATION OF INDIRECT (F&A) COST RATE OR RATES
- 7. Fixed Rates for the Life of Sponsored Agreement
- a. Federal agencies must use the negotiated rates except as provided in paragraph (e) of §200.414 Indirect (F&A) costs, must paragraph (b)(1) for indirect (F&A) costs in effect at the time of the initial award throughout the life of the Federal award. Award levels for Federal awards may not be adjusted in future years as a result of changes in negotiated rates. “Negotiated rates” per the rate agreement include final, fixed, and predetermined rates and exclude provisional rates. “Life” for the purpose of this subsection means each competitive segment of a project. A competitive segment is a period of years approved by the Federal awarding agency at the time of the Federal award. If negotiated rate agreements do not extend through the life of the Federal award at the time of the initial award, then the negotiated rate for the last year of the Federal award must be extended through the end of the life of the Federal award.
- b. Except as provided in §200.414 Indirect (F&A) costs, when an educational institution does not have a negotiated rate with the Federal government at the time of an award (because the educational institution is a new recipient or the parties cannot reach agreement on a rate), the provisional rate used at the time of the award must be adjusted once a rate is negotiated and approved by the cognizant agency for indirect costs.
9. How will the F&A rate be applied to a grant that has already committed multiple periods of support?
Rates currently in effect on active awards that were awarded before July 1, 2023, will be continued until the end of the current competitive segment. A competitive segment is a period of years approved by the sponsor at the time of the award.
Example 1:
Project Period: 7/1/2021-6/30/2026
Competitive Segment: 7/1/2021-6/30/2026
Budget Period: 7/1/2024-6/30/2025
F&A predetermined rate in Notice of Award for competitive segment is 51.50%. Not this award was granted before the effective date of the new F&A rate agreement and was using a predetermined rate, thus it will use the rates in effect at that time until the end of the competitive segment.
| Budget Period | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| 7/1/2021-6/30/2022-Year 1 | 51.50% | ||||
| 7/1/2022-6/30/2023-Year 2 | 51.50% | ||||
| 7/1/2023-6/30/2024-Year 3 | 51.50% | ||||
| 7/1/2024-6/30/2025-Year 4 | 51.50% | ||||
| 7/1/2025-6/30/2026-Year 5 | 51.50% | ||||
Example 2:
Project Period: 7/1/2023-6/30/2028
Competitive Segment: 7/1/2023-6/30/2028
Budget Period: 7/1/2024-6/30/2025
This award was granted when Drexel was utilizing the provisional rate of 51.50%. The provisional rate was effective during 7/1/2023 through 6/30/2024, and is now referred to as the final predetermined rate for that time period. The period of 7/1/2024 through 6/30/2027, or years 2 through 4 of this competitive segment, are subject to the new predetermined rates for each respective time period in the competitive segment. Year 5 is subject to the provision rate effective 7/1/2027. Research Accounting Services will effective date every grant's F&A rate where the project start date is on or after July 1, 2024, to utilize the newly negotiated rates on the effective date. The rates will automatically update to the appropriate rate for that time period based on the effective date.
| Budget Period | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| 7/1/2023-6/30/2024-Year 1 | 51.50% | ||||
| 7/1/2024-6/30/2025-Year 2 | 52.00% | ||||
| 7/1/2025-6/30/2026-Year 3 | 52.00% | ||||
| 7/1/2026-6/30/2027-Year 4 | 52.50% | ||||
| 7/1/2027-6/30/2028-Year 5 | 52.50% |
Example 3:
Project Period: 11/1/2024-10/31/2030
Competitive Segment: 11/1/2024-10/31/2030
Budget Period: 11/1/2024-10/31/2025
Since this award was granted after the effective date of Drexel University's F&A agreement, it will utilize the tiered rates and corresponding effective dates to calculate the F&A.
| Budget Period | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| 11/1/2024-10/31/2025-Year 1 | 52.00% | ||||
| 11/1/2025-6/30/2026-Year 2 | 52.00% | ||||
| 7/1/2026-10/31/2027-Year 2 | 52.50% | ||||
| 11/1/2027-10/31/2028-Year 3 | 52.50% | ||||
| 11/1/2028-10/31/2029-Year 4 | 52.50% | ||||
| 11/1/2029-10/31/2023-Year 5 | 52.50% |
10. How will the F&A rate be applied to existing federal multiyear contracts?
Federal contracts will continue with the current rate until the end of the period of performance as specified in the agreement. Therefore, if the contract defines a specific F&A rate that is locked into the agreement, that will be the rate which is utilized.
11. How will the F&A rate be applied to existing non-federal grants?
The rate approved by the sponsor at the time of the award will continue for the remainder of the award period.
12. If the F&A rate changes on my award during its noncompeting segment, will the grant number or fund number change or stay the same?
The grant and fund number will not change as a result of the rate changing. Banner utilizes effective dating so when awards are set up it will be programed to automatically update the F&A rate to the rate in effect. Please note, that if two different rates apply for the same time period (i.e. an on-campus rate and an off-campus rate), then it would be necessary to established separate fund numbers for the on-campus portion and the off-campus portion, but those funds would be linked to the same grant.
13. What is the F&A rate applied to carryover funding?
Carryover is subject to the F&A rate in effect when costs are incurred.
If you have any question concerning the new facilities and administrative rates, please contact ras@drexel.edu.