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Guidelines on the Use of Facilities and Administrative (Indirect) Cost Recovery Reimbursement

 

Facility & Administration (F&A) costs are indirect costs which are necessary to support research and other sponsored projects, but which cannot be readily assigned to individual projects.Examples include depreciation of research equipment and buildings, laboratory utilities (light, heat/cooling, power), hazardous chemical and biological agent management, libraries, internet, data transmission & storage, radiation safety, insurance, administrative services, and compliance with federal, state, and local regulations, e.g., Institutional Review Boards (RBs) for human subject or animal research.  

The terms “Facilities & Administrative Costs," "F&A costs" "indirect costs," “IDCs” and "overhead" are often used interchangeably. Drexel has federally negotiated F&A rate agreement set by the U.S. Department of Health and Human Services. 

F&A cost recovery is a reimbursement of expenditures to cover some portion of the indirect (F&A) costs incurred as a function of completing a research award. In contrast to tuition, F&A cost recovery is not revenue but a repayment of costs already sustained. 

F&A costs recovery occurs on a daily basis back to the dean's office on the unrestricted fund of the college or school assigned to the grant. Each college/school distributes the F&A cost recovery differently. For investigators who receive a portion of the recovered F&A, they are returned to funds that are categorized as “PI Overhead Share Funds” in the general ledger (i.e. Banner). 

Utilization of F&A cost recovery is restricted to uses that enhance the university’s academic and research efforts. More specifically, their use is limited to “scholarly development of faculty/staff/ students, support of campus infrastructure, or expansion of research.” F&A cost recovery may not be used for PI compensation. 

The following are examples of acceptable uses of F&A recovery funds (PI Overhead Share Funds):

  • Start-up for new faculty
  • Conducting early pre-grant (pilot) feasibility studies
  • Preparing competitive proposals for sponsored programs
  • Providing carryover funding for research teams to provide continuity between externally funded projects
  • Supporting new researchers pending external funding
  • Engaging in research programs of critical interest to the general welfare of the citizens of this state
  • Purchasing capital equipment (including computers) directly related to expanding the research capability of the institution
  • Purchasing research supplies
  • Research-related travel
  • Matching funds commitments for grants and sponsored projects
  • Laboratory renovations (e.g., modifications needed for new instruments)
  • Support for common or shared administrative structures in the units
  • Support of broad-use core facilities
  • Research administration staff support
  • Graduate student recruitment efforts
  • Graduate student stipend support
  • Support supplements to cover tuition and benefits for graduate students on external fellowships

As with any guidance, our University policies and applicable laws and sponsor regulations should also be followed when utilizing these resources.

For questions concerning these guidelines, please contact Research Accounting Services at ras@drexel.edu.