Policy Statement:

Facility and Administrative (F&A) costs are real expenses of the university, related to research and other activities. Sponsored projects need to pay their share of these costs. It is the university’s policy that the appropriate F&A rate shall be applied to each funded project. In rare instances, the principal investigator may feel there are extenuating circumstances that warrant an exception to the recovery of full F&A costs in accordance with RO Policy 24-004.

F&A Category 1- Negotiated F&A RatesF&A rates listed in the F&A rate memo will be used for all sponsored projects unless an F&A Exception or F&A Wavier is approved.

F&A Category 2- F&A Exceptions- F&A Exceptions will be accepted for all sponsored programs that meet the following requirements. Explanation is required in the Cayuse proposal, but no additional forms are required.

  1. Sponsor F&A Limitation: There are certain programs where a non-profit, federal, or state sponsor either prohibits or restricts F&A costs to less than OSU’s negotiated rates. Federal F&A limitations must be either a statutory restriction (e.g., USDA Farm Bill) or included in the RFP as a limitation. Non-Profit limited rates must be a published policy applicable to the entire organization or program. State government limited rates must be included in the RFP. These do not require a F&A waiver request unless the sponsor is from a for-profit company. A copy of the sponsor’s published indirect rate policy should be attached to the proposal when routed for OSU approvals.

  2. PI Transfer: If a new faculty member is transferring awards from their previous institution into OSU, a reduced F&A rate will be honored to the extent needed to make the Direct Costs available to the PI at their previous institution remain available to them after they come to OSU.

Category 3: F&A Waivers: In limited circumstances it is appropriate for the university to grant either a reduction in the amount of the F&A charged to a grant, or to alter the distribution of a portion of the indirect costs in order pursue an opportunity.

When a principal investigator wishes to request a waiver or reduction of these costs, there are two options to request OSU acceptance of a reduced F&A rate. Both options require a completed form to accompany the Cayuse proposal and, additional time should be provided for the review and approval.

  1. Department/College Subsidy: If a unit/department/college subsidizes the difference between the amount of F&A allowed and the amount of F&A collected, then a Department F&A Subsidy Form is required. The amount of returned overhead to the unit will be reduced by the amount of the subsidy. Please complete the Department F&A Subsidy Form and include it with your proposal submitted to OSRAA.

  1. VPR Wavier: If the unit is unable to subsidize the waived F&A, a F&A Waiver Form is required prior to the submission of a proposal to a potential sponsor. The Vice President for Finance and Administration (VPFA) and the Vice President for Research (VPR), along with the concurrence from the PI and College/Unit leader, have the authority to grant a reduction in the amount of F&A costs. Similarly, the VPFA, VPR, or their designees have the authority to designate alternative allocations or a special distribution of the Returned F&A.

Unfunded Partnership Agreements including a reduced F&A rate: Sponsors may approach OSU to agree to a reduced F&A rate for certain programmatic activity. A non-exhaustive list of these unfunded partnership agreements are faculty joint appointment funding, graduate student sponsorship programs, consortium agreements, etc.  These may be called a Master Agreement, Memorandum of Understanding, Membership Agreements, etc. VPR must approve all agreements on F&A reductions. Even if VPR approval has been received for the partnership agreement, each funded project under that partnership agreement must complete the VPR F&A Waiver Form in order to track the F&A waiver impact.