Sponsored projects include grants, contracts, and cooperative agreements accepted by Oklahoma State University to conduct research, instruction, and other projects. The cost of every sponsored project is composed of Direct Costs and Indirect Costs. Indirect Costs are also known as Facilities and Administration (F&A) Costs.
- Direct Costs are the costs that can be assigned to a sponsored project relatively easily and with a high degree of accuracy. These costs usually include salaries, wages, benefits, equipment, supplies, and travel associated with the sponsored work.
- In contrast, F&A Costs represent the university's costs for providing shared services, facilities, administrative support, and other general infrastructure needed to support all projects. Thus, these costs cannot easily be attributed to a specific sponsored project, program, or grant.
Facts about F&A
- Oklahoma State University does not set its own F&A rates. Rather, OSU’s F&A rates are negotiated and approved by the Office of Naval Research (ONR). Visit this site for current rates.
- F&A income is a reimbursement for expenses already incurred by Oklahoma State University in support of sponsored projects. Oklahoma State University DOES NOT get a check for F&A costs when the project is funded. In fact, we do not receive this funding until after the direct costs are expended.
- It is policy (OSU Policies 1-0112, 1-0113, 4-0105) that all grants, contracts, and
other sponsored agreements accepted by Oklahoma State University be charged the maximum
allowable federally negotiated F&A rate.
- However, not all federally funded projects can be charged the fully negotiated F&A rate. For example, training grants from the National Institutes of Health (NIH) are limited to 8% F&A. The Department of Agriculture has statutory authority from Congress to limit F&A rates to 10-30%, depending upon the program.
- When a sponsor of a grant or contract does not pay the federally negotiated F&A rate, the unrecovered F&A costs (i.e., difference between negotiated and effective F&A) do not go away. Oklahoma State University has no choice but to absorb the difference, resulting in diversion of university funds that could be used to support other missions (i.e., research infrastructure, research start-up, instruction).