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Financial Analysis

F&A - Frequently Asked Questions


What is F&A?

F&A stands for Facilities and Administrative costs. It is the current federal government, OMB Circular A-21, terminology for what was formerly known as indirect costs and applies to grants and contracts. Many people also refer to this as overhead. A-21 defines F&A as "costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity."

While some people view F&A as a "tax," F&A costs are REAL costs incurred by the University to support the missions of the University, including the research mission.

The "facilities" components include the costs of utilities, depreciation on buildings, depreciation on capital equipment, maintenance and repair, and libraries. The "administrative" components include costs related to HR, Payroll, Procurement, OSP, ITC, Finance, the President’s office, the Vice Presidents’ offices, the Deans’ offices, plus other administrative offices.

The University is allowed to charge F&A to the sponsors of grants and contracts, using the F&A rate, in order to try to recover for the costs that have been incurred. At present the University collects over $65 Million in F&A cost recoveries from sponsors.


How is the F&A rate that is charged to grants and contracts calculated?

The Cost Analysis group in Financial Administration submits F&A rate calculations to the federal Department of Health and Human Services (DHHS). The University and DHHS negotiate F&A rates to be used over a period of years based on these calculations.

The negotiated F&A rates are to be used on most federal and industry grants and contracts. Other sponsors, including the State and private foundations, tend to limit, by their own policy, the F&A rate they are willing to pay. Federal training and fellowship grants, clinical trials and drug studies also limit the F&A rate.

An F&A rate is expressed as a percentage. This percentage is multiplied by the appropriate costs on the grant or contract to determine the amount of F&A to be charged. The F&A is billed to the sponsor along with the other costs.

For example, if the salaries and fringe benefits on a grant are $90,000 and other direct costs are $10,000 and the F&A rate for this grant is 50%, then the charges to the grant will be salaries and fringe benefits $90,000; other direct costs $10,000; F&A ($100,000 x 50%)=$50,000; for a total of $150,000.


Why don’t I get the right amount when I multiply the F&A rate times the total direct costs?

Not all direct costs can be "burdened" with F&A. Some costs do not get included when calculating F&A. This includes capital equipment, rent, scholarships/fellowships, and tuition remission on federal grants and contracts. Private industry, federal research training or foundation grants and contracts may have different rules concerning the costs that can be burdened.


What does the University do with the F&A recovered from sponsors?

The academic Vice Presidents determine how F&A recoveries will be distributed within the University. The distribution formula is reviewed periodically by the VP’s. All the F&A recovered from grants is divided up between various organizations within the University. These organizations include the libraries, the Vice President for Research, ITC, VP/CFO, the schools, the state, and others. A percentage also goes into a reserve for capital projects related to research. The distribution percentages are published on the Financial Analysis web page at

For departments that have grants some schools choose to have a portion of the school’s share of F&A distributed to the departments. This amount is expressed as a percentage of the total F&A recoveries generated by the department’s grants. The departmental share is calculated by multiplying the departmental percentage by the total F&A of all projects with that department’s carrying out org code. Thus your project must be set up with your org code if you want to receive the department’s share of F&A.

For example, if the department that performed the $150,000 grant in the example above is allocated 17.9% of F&A by their dean, then that department would get $50,000 x 17.9% = $8,950.


How much F&A does my department get?

The distribution percentages are determined by the University vice presidents.  These percentages are listed in the "F&A Allocation Percentages" link on the Financial Analysis web page at


How does my department get the F&A?

The F&A is installed on the F&A (FA) award of the department. The Award Manager for the F&A award can then fund projects with this money. The following is a link to the procedure for funding a project.

After a project is funded, either the Award Manager or the Project Manager then needs to do an Award Budget for each project that was funded. The budgets must then be submitted, baselined and summarized. You can fund projects other than the F&A revenue project with F&A funds, subject to the usual project funding rules. The following is a link to the procedure for creating budgets.

The following is a link to the procedure for increasing funding and budgets combined into one procedure.

The F&A is distributed to the GL revenue projects that are associated with the F&A awards through mass allocation journal entries performed during month-end closing each month. The F&A is installed on FA awards so that it can be used in the Grants Accounting Module.


When do I get my F&A?

There is an initial award installment at the beginning of the fiscal year, in mid-July. The installment amount is generally 85% of the prior year’s distribution. For the school departments, the installment amount is generally 70% of their prior year distribution. For non-school department distributions, amounts under $19,000 are not installed. For school department distributions, if the department’s F&A recovery from all grants totaled less than $90,000 in the prior fiscal year, no dollars are installed.

Installments are adjusted at the beginning of May to reflect the actual distribution amounts through April. A final settlement process is performed after June 30. The final adjustments are made to the award installment in July of the following fiscal year.


How can I see my F&A?

Someone in your department must take certain actions in the Integrated System in order for you to see your F&A. The FA award manager can see the F&A installment on the Award Management screen. If your project has been funded and a budget has been submitted, baselined and summarized, then you can see the F&A in the budget of the project. The Award Manager and sometimes the Project Manager must perform these tasks for you to see your F&A on your project.

The easiest way to see your F&A is on the reports published monthly on the Financial Analysis web site at If you have GL access you can see the F&A revenue in a Trial Balance, Detail Trial Balance, or Cash Balance report. Various Discoverer reports can also be used to see your F&A. Depending on where it is you are trying to see your F&A you would use different reports.


What is the industry incentive adjustment?

This policy was adopted by the academic VP’s several years ago. For any industry grant or contract that started after July 1, 1995 departments received an extra 5% of the F&A beyond the published percentage. This adjustment was discontinued on June 30, 2006


What is incremental F&A?

For FY04 the academic Vice Presidents of the University decided to change the distribution of F&A recoveries, in light of new F&A rates negotiated in April 2003. At that time, the University’s on-Grounds Organized Research rate increased from 48% to 52%. Per VP and Provost Gene Block’s letter of June 3, 2003 "the incremental recovery resulting from the difference between the 48% and the 52% (or 23.6% and 26% off-Grounds) on new awards as they are signed will be distributed to a central pool managed by the VP for Research".

In FY06 new expenditure types were created to account for the incremental F&A. The new expenditure types are "F&A Costs Greater Than 48%" and "F&A Costs Greater Than 23.6%." The burdening process of the Integrated System calculates the correct amount of F&A to charge to grants and to credit as revenue. In FY06 it distinguished between incremental F&A and non-incremental F&A. The incremental F&A amount was subtracted from each carrying out org’s F&A recovery total so that the non-incremental amount was used in calculating F&A distributions.

In FY07 this practice was discontinued. The new expenditure types are no longer used. The distribution percentages published on the Financial Analysis web page are the percents used to calculate F&A.


What do the F&A reports on the Financial Analysis web page mean?

The Installment and Distribution report shows the year-to-date recoveries, departmental distribution, and dean’s distribution for each carrying out org by month. These reports use the subtotal functionality of Excel. You will see numbers in little blocks on the upper left corner of the spreadsheet.

The numbers indicate the subtotal level that is being displayed. You can display more detail by selecting a higher number or less detail by selecting a lower number. Thus if you were interested in school totals you would select level 2. However, if you wanted to know the total for an individual org you would select 4. The last tab on the spreadsheet, "Install," shows the current installment for each FA award.

The F&A Distribution by Project reports show the F&A recoveries, departmental distribution and dean’s distribution for each project that has F&A expenses for the current fiscal year. There is a new report each month. Year-to-date as well as current month data is shown in different tabs on the spreadsheet. This report uses the AutoFilter functionality of Excel. You will see a triangle in the cell of each column heading.

By clicking on the triangle in the box on one of the column headings you can choose to see only those rows of data that you want. The other rows of data remain in hidden rows so that you may choose a different selection after seeing the current selection. Be careful using the Sum function in Excel if you’ve hidden some rows, you want to be sure you are summing the rows that you intend to sum.


How do I get rid of those annoying subtotals on the reports?

The Installment and Distribution reports use the subtotal functionality of Excel. If you don’t want to use it then first select all data, click on the Data menu, Select Subtotal, Click on the Remove All button. If you get an error box that says that Excel cannot determine which rows are required, just click OK.

You might want to try using the subtotals. You will see numbers in little blocks on the upper left corner of the spreadsheet. The numbers indicate the subtotal level that is being displayed. You can display more detail by selecting a higher number or less detail by selecting a lower number. Thus if you were interested in school totals you would select level 2. However, if you wanted to know the total for an individual org you would select 4.


How do I get rid of the little drop-down boxes on the reports?

The F&A Distribution by Project reports use AutoFilter. You can turn this off by clicking on the Data menu, then selecting Filter, then clicking to uncheck the AutoFilter box.


What if my F&A installment isn’t as much as I should have?

If you have concerns about your F&A installment, please contact please contact ph: 4-8928 or ph:2-2373. As the year progresses and you feel that your installment needs to be adjusted, contact we can appropriately adjust your installment amount.