F&A Rate FAQs - Drexel
Facilities and Administrative Rate FAQs
Example 1:
5-year Organized Research Proposal with noncompeting renewals
Start date of May 1, 2020
Budget Period | F&A Rate Applicable |
5/1/2020-6/30/2020 (Year 1) | 56.50% |
7/1/2020-4/30/2021 (Year 1) | 51.00% |
5/1/2021-6/30/2021 (Year 2) | 51.00% |
7/1/2021-4/30/2022 (Year 2) | 51.50% |
5/1/2022-4/30/2023 (Year 3) | 51.50% |
5/1/2023-4/30/2024 (Year 4) | 51.50% |
5/1/2024-4/30/2025 (Year 5) | 51.50% |
Example 2:
3-year Instructional Research Proposal with noncompeting renewals
Start Date January 1, 2020
Budget Period | F&A Rate Applicable |
1/1/2020-6/30/2020 (Year 1) | 43.00% |
7/1/2020-12/31/2020 (Year 1) | 49.00% |
1/1/2021-12/31/2021 (Year 2) | 49.00% |
1/1/2022-12/31/2022 (Year 3) | 49.00% |
Based on the Uniform Guidance, awards that were made using the provisional rate of 56.5% during the period of 7/1/2018 to the date of the agreement must be adjusted to the negotiated rates for the competitive segment that was awarded at the provisional rate.
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Grants awarded before 7/1/2018, remain as awarded and will utilize the 56.5% for the remainder of the competitive segment.
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Grants awarded while the provisional rate was in place (7/1/2018 to 10/28/2019) will be adjusted to the negotiated rates. Therefore, an organized research award, will have a rate applied to it for the period of 7/1/2020-6/30/2021 of 51.0% and then beginning on 7/1/2021 the rate will be increased to 51.5% until the end of the competitive segment.
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Grants awarded after 10/28/2019 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 the Sponsored Agreement
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.
Rates currently in effect on active awards that were awarded before July 1, 2018, 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: 7/1/2017 – 6/30/2022
Competitive Segment: 7/1/2017 – 6/30/2022
Budget Period: 7/1/2019 – 6/30/2020
F&A predetermined rate in Notice of Award for competitive segment: 56.50%. Note: 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 |
7/1/2017-6/30/2018 (Year 1) | 56.50% | ||||
7/1/2018-6/30/2019 (Year 2) | 56.50% | ||||
7/1/2019-6/30/2020 (Year 3) | 56.50% | ||||
7/1/2020-6/30/2021 (Year 4) | 56.50% | ||||
7/1/2021-6/30/2022 (Year 5) | 56.50% |
Example 2:
Project Period: 7/1/2018 – 6/30/2023
Competitive Segment: 7/1/2018 – 6/30/2023
Budget Period: 7/1/2020 – 6/30/2021
This award was granted when Drexel was utilizing a provisional rate of 56.5%. The provisional rate was effective during 7/1/2018 through to 6/30/2020 and is now referred to as a final rate for that time period. The period of 7/1/2020 through to 6/30/2023, or the last three years of this competitive segment, are subject to the new predetermined rates for each respective time period in the competitive segment. Research Accounting Services will effectively date every grant’s F&A rates where the project start date is on or after July 1, 2018, 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 |
7/1/2018-6/30/2019 (Year 1) | 56.50% | ||||
7/1/2019-6/30/2020 (Year 2) | 56.50% | ||||
7/1/2020-6/30/2021 (Year 3) | 51.00% | ||||
7/1/2021-6/30/2022 (Year 4) | 51.50% | ||||
7/1/2022-6/30/2023 (Year 5) | 51.50% |
Example 3:
Project Period: 11/1/2019 – 10/31/2024
Competitive Segment: 11/1/2019 – 10/31/2024
Budget Period: 11/1/2019 – 10/31/2020
Since this award was granted after the effective date of Drexel University’s 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 |
11/1/2019-6/30/2020 (Year 1) | 56.50% | ||||
7/1/2020-10/31/2020 (Year 1) | 51.00% | ||||
11/1/2020-6/30/2021 (Year 2) | 51.00% | ||||
7/1/2021-10/31/2021 (Year 2) | 51.50% | ||||
11/1/2021-10/31/2022 (Year 3) | 51.50% | ||||
11/1/2022-10/31/2023 (Year 4) | 51.50% | ||||
11/1/2023-10/31/2024 (Year 5 | 51.50% |
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.
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.