St. Cloud State University Policies & Procedures

Application and Calculation

F&A cost is calculated and included within a proposal budget prior to submission to an external funding agency. 

Federal Funds. Proposals to and awards from federal agencies must include F&A costs at the rate set forth in the University’s agreement negotiated with the U.S. Department of Health and Human Services, except as provided otherwise by federal regulations, on-campus rate 37% and off-campus rate 20% effective 07/01/2022 – 06/30/2026 and provisional 07/01/2026.

F&A costs on federal flow-through* funds must be included at the appropriate federal rate, except as provided otherwise by federal regulations.

*Federal flow-through funds are awards to SCSU from State of Minnesota agencies, city and county government entities, and other non-federal agencies (including other institutions of higher education) that are funded by federal agencies.

Federal Funds F&A Calculation

Step 1: Total Direct Cost  –  Exclusions*  =  Modified Total Direct Cost

Step 2: Modified Total Direct Cost  x  37%  =  F&A Cost

Step 3: Total Direct Cost  +  F&A Cost  =  Total Project Costs

* Exclusions include equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000.

Non-federal Funds. 

Proposals to and awards from non-federal entities must include 12% F&A costs.

Non-federal Funds F&A Calculation

Step 1: Total Direct Cost  x  12%  =  F&A Cost

Step 2: Total Direct Cost  +  F&A Cost  =  Total Project Costs

Exceptions to Using the defined F&A Rates

Funding Agency Limits F&A Rate

Some external funding entities limit the F&A rate that SCSU can charge to sponsored projects. The limited F&A rate must be published in the funding entity’s written guidelines and be applicable to all proposals submitted for that particular program or that agency (not solely to SCSU’s proposal.).

Examples of “published” materials containing the language include:

• Request for proposal
• Request for application
• Broad funding agency announcement
• Other published guidelines
• Website
• Confirmed in writing by the funding agency, however, a rate reduction requested by a program officer or agency staff person does not constitute as an entity’s published F&A rate 

Process to request an F&A reduction:

1. PI(s) must attached a copy of the published materials to the associated Proposal Approval Form that will be routed to the Office of Research and Sponsored Programs prior to submission.
2. If such documentation cannot be provided, SCSU’s full applicable F&A rate will apply.

Requesting an F&A Cost Variation

If the above exception does not apply, but the PI believes there is justification for a rate reduction, the PI can submit the Request for Variation of F&A Cost Rate form and route with the associated Proposal Approval Form (see Supporting URLs). SCSU reserves the right to decline any proposal that does not include F&A costs.

F&A rate reduction requests will be considered on a case-by-case basis. 

• The F&A rate for agreements that are renewed or continued by amendment are not subject to this policy.
• The F&A rates for projects that are renewed or continued with a new agreement are subject to this policy.  

Process to request an F&A reduction:

1. The PI(s) should consult with RSP staff to verify that the proposed project is not subject to any of the above exceptions for a rate reduction.
2. The PI(s) should complete the Request for Variation of F&A Cost Rate form and route with the associated Proposal Approval Form at least 2 weeks prior to proposal submission.
3. The Associate Provost for Research will approve or deny the reduction request and notify the PI(s) and RSP staff.
4. If the rate reduction is approved, the PI should proceed with budget development using the approved F&A rate, and continue through the standard RSP budget review and approval process for all submissions

Unacceptable Reasons for F&A Reductions

• Requests made solely because an award does not provide adequate direct costs for completion of the full scope of the project;
• The PI(s) overlooked or did not know that F&A was needed or that prior approval was required, or
• Reduction based on precedent.

Redistribution of F&A Recovery

In addition to assisting with University overhead, distributed F&A recovery is meant to support continued and new scholarly activity, research portfolios, and foster new grants and contracts for the University.

Recovered funds will be distributed in the fiscal year subsequent to the fiscal year collected as follows:

• 50% to the University’s General Fund
• 25% to Research and Sponsored Programs
• 10% to College/School
• 10% to Principal Investigator
• 5% to Unit

*For purposes of this policy, Unit is defined as a University recognized department or program.

SCSU reserves the right at its own discretion and at any time to modify the redistribution of F&A recovery as deemed necessary for university purposes.

Funds redistributed are meant to support continued and new scholarly activity, research portfolios, and foster new grants and contracts for the University.

Examples of expected uses for F&A Recovery:

• Purchase of research supplies.
• Purchase or repair of research equipment and computers.
• Research related travel for faculty or student researchers to professional meetings or to funding agencies.
• Support for undergraduate or graduate research assistants or staff engaged in research activities.
• Support for activities related to obtaining additional funding such as cost share or grant preparation activities.
• Membership in Research Societies, the purchase of research-related publications (books, subscriptions to research journals) and publication costs. 

F&A Recovery cannot be used for:

• Travel unrelated to research.
• Teaching supplies or equipment unless it is part of a research project.
• Salaries and fringes for the Principal Investigator(s).
• Entertainment including celebrations/parties.

Other notes

• If there is a disagreement over whether a specific expense can be paid using the F&A Recovery, the Associate Provost for Research has authority to make the final decision regarding approval of the expenditure.
• When a faculty member who has an F&A recovery fund leaves the university, funds will not be redistributed.
• Items purchased with F&A Recovery are property of the University.

Indirect costs, overhead, return on indirect