Facilities and Administrative Costs (Indirect Costs)

NOTE: as of March 1, 2015, UMW now has a federally-negotiated rate for Facilities and Administrative (F&A) costs — sometimes referred to as “indirect costs.”

Facilities and Administrative costs are those indirect costs associated with the performance of a sponsored activity (such as a grant or a contract or other similar agreement with an external funding source). They are shared expenses related to the use of university facilities and administrative support. Facilities costs include but are not limited to the costs and depreciation for use of buildings and equipment; interest on the debt associated with buildings and equipment; and expenses for operations and maintenance expenses. Administrative costs include the proportion of all costs related to the personnel and supplies provided by the various administrative offices that support any aspect of the management of an external grant or contract.

UMW’s federally approved rate is 36% of modified direct costs. Modified direct costs consists of all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel and up to the first $25,000 of each sub-award (regardless of the period of performance of the sub-awards under the award). Modified total direct costs excludes the following (the budget items are not to be considered when calculating the amount of eligible indirect costs):

• equipment
• capital expenditure
• charges for patient care
• rental costs
• tuition remission
• scholarships and fellowships
• participant support costs
• the portion of each sub-award in excess of $25,000.

Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs. The cognizant federal agency is the Department of Health and Human Services.

In some cases, the sponsoring entity may have a cap on the amount that may be claimed as indirect costs. In those instances, use whatever percentage the sponsoring agency will allow. If desired, given the overall budget and limitations on grant funding available under the program being applied for, you may prior UMW approval (by the Provost and/or Vice President for Administration and Finance) request claim a lower indirect cost rate in the interest of making the project proposal as effective and attractive as possible.

If an external funding proposal will use UMW facilities or space and no overhead amount is included as part of the project budget, the proposal must include an amount for rental of UMW space and facilities (unless the Provost and the Vice President for Administration and Finance has agreed to reduce or waive those fees).

If you need a copy of UMW’s rate agreement to be submitted along with your proposal, contact John Morello at: jmorello@umw.edu


As a part of the internal reviewing process, UMW officials will approve the indirect costs proposed as a part of the budget. In accordance with Commonwealth of Virginia policy, 33% of any facilities and administration costs recovered on an externally-funded grant or contract will be transferred to the institution’s E & G revenues. The remainder will be retained by UMW to support the extension and enhancement of research activities at the university.