Facilities & Admin Cost Rates

Indirect/F&A Rate Change and Impact Notice


Effective July 1, 2013 the indirect rate for organized research on campus will increase to 49.5% for Projects that were awarded as of July 1, 2012 or later and is tiered to increase for the subsequent 3 fiscal years with each new increase taking effect July 1 of that particular Fiscal Year.  To see if the new negotiated rate agreement affects your grant/award, please visit the OGCS website for the full rate agreement along with the tiered rates over the next 3 fiscal years.  It can be found at http://nau.edu/research/grants-contracts/.

How does this impact your grant?

The indirect rate charged on expenditures on your grant will increase by .5% to a total of 49.5%.  For example for fiscal year 2013 if you spent $2,500 on supplies and or salaries,  then the PeopleSoft System would generate 49% of indirect cost to be charged to your grant, or $1,225 which equates to decreasing your available spending balance by $3,725.  Starting July 1, 2013 the overall cost for a $2,500 transaction will be $3,737.50.  Naturally the amount of indirect charged increases in proportion to the amount of the expenditure.

What should I be aware of before Fiscal Year 2013 ends?

Cost transfers, if you have cost transfers (IDTs or RETROS) for expenditures that occurred during fiscal year 2013, YOU WILL NEED TO GET THEM COMPLETED AND SUBMITTED NOW!   THIS WILL ENSURE THAT THE COSTS HIT THE 2013 FISCAL YEAR LEDGER and THE LOWER RATE IS USED TO CALCULATE THE INDIRECT CHARGE.    

What will happen if I do not process the cost transfer in time?

The PeopleSoft System will automatically charge the higher IDC rate.  PAASFC will be reviewing the IDTs and attempting to do manual adjustment to account for the appropriate IDC rate.  However we cannot ensure we will be able to identify all cost transfers for expenditures that incurred in fiscal year 2013 but have a posting date of fiscal year 2014. If the cost transfer does not incur in the fiscal year 2013 for expenditures that hit the FY13 ledger, it will have a negative impact on the spending authority for that project in FY14.

Cost Transfer Fundamentals

It is critical that all sponsored projects be reviewed on a regular basis (monthly) to ensure that expenditures are accurate and appropriate. Diligent review of financial reports and timely communication between principal investigators and departmental administrators should prevent the necessity for transfers. When errors are discovered, they must be corrected as quickly as possible and within NAU 60 day guidelines.

  • Cost transfers should be considered “the exception, rather than the rule,” and must be kept to a minimum and require substantial and reasonable justification.                       
  • All expenses that are transferred must meet the same federal tests for allowability they must be:
    • reasonable,
    • allocable, and
    • consistently treated as a direct cost.