What are Facilities & Administrative Recoveries?

F&A stands for Facilities and Administrative costs. It is the current federal government, Title 2 Code of Federal Regulations section 200 (2 CFR 200), terminology for what was formerly known as indirect costs and applies to grants and contracts. Many people also refer to this as overhead. 2 CFR 200 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.

For example, research is 22% of expenditures for compensation and 31% of supplies, utilities, and other services. Therefore HR, Payroll, Procurement, and Facilities Management staffing is scaled up to handle the extra workload caused by research.

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 the costs that have been incurred. At present the University collects over $65 Million in F&A cost recoveries from sponsors.

The Cost Analysis group in Financial Planning & Analysis 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.

Not all direct costs can be "burdened" (charged) with F&A. Some costs do not get included when calculating F&A. This includes capital equipment, rent, scholarships/fellowships, tuition remission, and participant support costs 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.

100% of the F&A earned by a school or unit is returned to that school or unit. The schools/units were allowed to create up to three F&A allocations, such as dean/department/debt service, for each of its orgs. The F&A allocation percentages remain in effect throughout the entire fiscal year. The percentages can be seen at Installments and Distributions.

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 project 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.

The distribution percentages are determined by the school/unit. These percentages are listed in the "F&A Allocation Percentages" link on the Financial Analysis web page at Installments and Distributions.

Cost Analysis installs the F&A on the F&A (FA) award of the department. The Award Manager for the F&A award can then fund projects with this money.

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 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.

Training and access for funding and budgeting is available through the Four Steps to Enterprise Applications Systems Access at: http://its.virginia.edu/integratedsystem/gettingstarted/4steps.html.

The following link shows the flow of revenue, including F&A, from receipt through expenditure, including managing accounts https://financialoperations.dev.uvaits.virginia.edu/processing/interactive-imagem.

There is an initial award installment at the beginning of the fiscal year, in mid-July. The installment amount is generally 80% of the prior year's distribution. For the school departments with $100,000 or more in the prior year, the installment amount is generally 70% of their prior year distribution. For school department distributions, if the department's F&A recovery from all grants totaled less than $100,000 in the prior fiscal year, no dollars are installed. For non-school department distributions, amounts under $19,000 are not installed.

Installments are adjusted periodically during the year, with a true-up in May. 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.

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 Planning & Analysis web site at Installments and Distributions. Depending on where it is you are trying to see your F&A you would use different reports.

If you have GL access in Oracle, you can see the F&A revenue in a Trial Balance or Detail Trial Balance report.
In UBI, you can view your F&A in the GL_Details – Current report and the GL_Cash_Balance_Summary report.

Also in UBI, you can see the F&A burdened in your school, department, or grant in the GA Module BBA report by selecting Expenditure Category "UVa, F&A Costs".

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.

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.

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.