If you are affiliated with UC Berkeley, you may have heard the term “F&A rate agreement” thrown around in discussions about grant funding and budgeting. But what does it actually mean, and why is it important?
F&A stands for “facilities and administrative” costs, which are indirect expenses that support research activities but do not directly relate to a specific project or funding source. These costs include things like building maintenance, utilities, security, and accounting services.
In order to receive federal or other external funding for research, UC Berkeley must negotiate an F&A rate agreement with the sponsoring agency. This agreement sets a predetermined percentage of indirect costs that can be charged to the grant or contract.
As of July 1, 2021, UC Berkeley`s F&A rate agreement for federal grants and contracts is 58%. This means that for every $100 of direct costs (such as salaries, equipment, and materials) charged to a grant, an additional $58 can be charged for indirect costs.
It`s important to note that F&A rates vary depending on the sponsor and the type of research being conducted. For example, UC Berkeley`s F&A rate for industry-sponsored research is 26%.
So why is this important for researchers and departments at UC Berkeley? In short, understanding and properly accounting for indirect costs is crucial for maintaining responsible and sustainable research funding. Failure to include F&A charges in a grant proposal or budget can result in insufficient funding and financial strain on the department or researcher.
Additionally, understanding the F&A rate agreement can help researchers and departments make informed decisions about grant proposals and funding sources. For example, a grant with a lower F&A rate may be more attractive at first glance, but may ultimately result in less funding overall if indirect costs are not properly accounted for.
In summary, UC Berkeley`s F&A rate agreement is an important aspect of research funding that should not be overlooked. By understanding and properly accounting for indirect costs, researchers and departments can ensure sustainable and responsible use of grant funding.