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F&A (Indirect) Cost Rates and FAQ’s


What are Sacramento State’s current F&A rates?
Effective through June 30, 2015.


On Campus: 38% MTDC (Modified Total Direct Costs)

Off Campus: 22% MTDC  (A project is considered off campus if the activity is conducted at locations other than in University or UEI-owned or operated facilities and indirect costs associated with physical plant and library are not considered applicable to the project.)

Modified Total Direct Costs (MTDC) consist of all salaries and wages, fringe benefits, materials, supplies, services, travel and subgrants and subcontracts up to the first $25,000 (regardless of the period covered by the subgrant or subcontract). Modified total direct costs excludes equipment, capital expenditures, charges for patient care, tuition remission, rental costs of off-site facilities, scholarships, and fellowships as well as the portion of each subgrant and subcontract in excess of $25,000.

What are indirect costs?
Why is F&A charged on grants and contracts?
F&A cost recovery recognizes that the work on the grant or contract is being conducted through the University - whether on or off campus - using University resources, such as facilities, utilities, libraries and administration. Using these resources is a real cost which, if not reimbursed, would adversely impact department budgets, student fees, and university resources. Sponsoring agencies recognize this fact and are willing to pay for indirect costs. Research Administration is responsible for including these indirect - but real - costs in proposed contract budgets so that all the costs associated with externally-funded projects may be reimbursed to Sacramento State.
Will adding F&A to my budget hurt the chances of my project being funded?
F&A costs are only one part of a proposal budget. By itself, the inclusion of F&A in a budget will not affect a proposal’s competitiveness. A well-planned budget includes F&A. As long as all direct-cost items are realistic, F&A is no hindrance. This is true for two reasons. First, other applicants will also be including F&A costs in their budgets. Second, funding agencies recognize that F&A is a necessary part of a budget and do not discriminate against institutions that include F&A. The substance of a proposal is far more important than F&A in determining whether a project is funded or not.

What do F&A costs include?
F&A costs include the following:
How is the F&A rate determined?
Who gets the recovered F&A costs?
Recovered F&A costs are used for many purposes throughout the University. Much of the recovered funds are returned to the college deans and principal investigators. Some uses of F&A include:
What are "forgone" or unrecovered F&A costs?
Why don’t some sponsors pay F&A costs?
How do Sacramento State’s F&A costs compare to other major universities’ rates?