F&A costs are Institute expenses that cannot be specifically identified with a particular project or activity. Also known as “indirect costs” or “overhead,” these costs are for administration, buildings, utilities, and other expenses necessary for operations of the Institute.
- Sometimes called “indirect costs” or “overhead,” these are the costs of administration, buildings, utilities, and the many other expenses necessary for the research operation of the Institute.
- One example of an F&A cost is utilities because they benefit many activities in a building.
- Because individual F&A costs cannot be assigned to projects, the Institute calculates a rate to determine the fair share of F&A costs each project should be charged and negotiates this rate with the government. The rate is then applied to all sponsored research projects—including federal and non-federal sponsors.
F&A costs are applied on a modified total direct cost (MTDC) base. The non-F&A- bearing costs in the budget must be identified so that project F&A can be accurately calculated.
- The MTDC base excludes the following cost components:
- Capital expenditures
- Subaward expenditures in excess of $25,000
- MIT annually negotiates its F&A rate with the Office of Naval Research (ONR), its cognizant federal audit agency
- MIT does not waive or reduce the F&A costs of any sponsored research project. DLCs may choose to use their unrestricted funds for the difference between the federally negotiated rate and the rate allowed by the sponsor
- The sponsor approved F&A rate should be used for non-research-sponsored projects. If underrecovery is anticipated contact the OSP contract administrator
- See MIT's current F&A Rate Agreement with ONR