Northern Arizona University F&A Rate Agreement: What You Need to Know
Northern Arizona University (NAU) recently signed a new Facilities and Administration (F&A) rate agreement with the federal government. This agreement sets the overhead rate for NAU`s research activities and determines the amount of indirect costs that the university can recover from federally funded research projects. As a researcher or grant writer, it`s important to understand the significance of this agreement and how it may impact your work at NAU.
What is an F&A Rate Agreement?
An F&A rate agreement is a contract between a university and the federal government that establishes the percentage of indirect costs that the university may charge to federally funded research projects. These indirect costs, also known as overhead or facilities and administrative costs, include expenses such as rent, utilities, equipment, and administrative salaries that are necessary to support research activities but are not directly attributable to a specific project. The F&A rate is calculated by dividing the total amount of indirect costs by the total amount of direct costs, which are the specific expenses incurred for a particular project.
Why is the F&A Rate Agreement Important?
The F&A rate agreement is important because it allows universities to recover some of the indirect costs associated with conducting research. Without this agreement, universities would have to cover these costs from their own budgets, which would limit their ability to conduct research and attract grant funding. The F&A rate also ensures that the federal government is not overpaying for research projects by including only the direct costs that are necessary to complete the project.
What is NAU`s New F&A Rate Agreement?
NAU`s new F&A rate agreement, which was negotiated with the federal government`s Department of Health and Human Services, sets the rate at 46% for on-campus research and 26% for off-campus research. This represents an increase from the previous rate of 42.5% for on-campus research and 26% for off-campus research. The higher rate for on-campus research reflects the increased costs associated with operating and maintaining research facilities and equipment. The new agreement is effective from July 1, 2021, to June 30, 2023.
How Does the F&A Rate Agreement Impact Researchers?
The F&A rate agreement affects researchers in several ways. First, it determines the amount of indirect costs that can be charged to grant-funded research projects. The higher the F&A rate, the more indirect costs can be recovered, which can result in more funds available for research. Second, the F&A rate may impact the competitiveness of grant proposals. If a university`s F&A rate is higher than its competitors, it may make it more difficult to secure grant funding. Finally, the F&A rate may also impact the amount of funding available for direct research expenses. If a higher percentage of the grant budget is allocated to indirect costs, there may be less money available for direct research expenses such as supplies, equipment, and personnel.
In conclusion, NAU`s new F&A rate agreement is an important development for researchers at the university. Understanding the impact of the F&A rate on grant funding and research budgets is critical for successfully conducting research at NAU. As always, researchers should consult with their department and sponsored projects office for guidance on grant proposals and budget development. With this knowledge, researchers can navigate the F&A rate agreement and maximize their funding opportunities for successful research.