Fiscal Operations Manual
Section 500: Financial Accounting and Analysis
Effective: 01/01/2003
Revised: 03/14/2016

 

WARNING:  THESE ARE NOT CURRENT POLICIES!!

Please see current Fiscal Policy Manual for current policies

 

The Facilities and Administrative rate (commonly referred to as indirect cost rate or F&A Rate) is based on the latest update of OMB (Office of Management and Budget) Uniform Guidance. The F&A Cost Proposal is prepared by Financial Accounting & Analysis (FA&A) within Business Affairs. Negotiations are completed by the VP for Finance and Administration with staff from the US Department of Health and Human Services (DHHS), Cost Allocation Services (CAS). DHHS-CAS is OSU's cognizant agency responsible for negotiating and approving rates for OSU on behalf of all Federal agencies. Negotiated rates are usually established for a 4 year period.

The Modified Total Direct Cost (MTDC) method of calculating the Facilities and Administrative rate is the method required for use by OSU. The process is as follows:

  • Establish the total costs incurred for the institution for the base period.
  • Establish F&A cost pools consisting of expenditures (exclusive of capital items and other costs specifically identified as unallowable).
    • General administrative and general expenses (exclusive of costs of student administration and services, student activities, student aid, and scholarships).
    • Operation and maintenance of university-owned facilities and depreciation after appropriate adjustment for costs applicable to other institutional activities.
    • Library
    • Departmental administration expenses.
    • Sponsored project administration.
    • Building depreciation
    • Equipment depreciation
    • Interest on bonds
    • Student Services Administration
  • Establish a MTDC distribution base: (1) that consists of all the institution's instruction, research, other sponsored activities, and other instructional activities.
  • Calculate the rate by dividing the MTDC base: (1) into each of the F&A cost pools (2) and adding the results together.
  • Establish the F&A cost rate, determined by dividing the amount in the F&A cost pool by the amount of the modified total direct cost base. This rate is then audited by DHHS and further refined (negotiated) as final.

The current F & A Rate Agreement can be found at the website for the Office of Sponsored Research and Award Administration (OSRAA) or under Business Affairs, Financial Accounting & Analysis.

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