Facility & Administrative Costs (F&A Costs)

The Code of Federal Regulations (CFR) defines indirect costs as “those costs incurred for a common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted.” LSU New Orleans and other institutions of higher education use the term "Facility & Administrative costs" (F&A costs) to refer to indirect costs, also sometimes known as overhead.

F&A costs are to be applied to all grants, contracts, and other agreements with federal, state, and private entities.

Periodically, LSU New Orleans negotiates its Federal F&A Rate Agreement through the U.S. Department of Health & Human Services. The current agreement is effective from July 1, 2021 through June 30, 2026. The rates shall be enforced until amended by further negotiation. The approved rates are:

Proposed Rates vs. Effective Rates

According to 2 CFR Appendix-III-to-Part-200 C.7.a., "agencies must use the negotiated rates in effect at the time of the initial award throughout the life of the award." This means that LSU New Orleans must use the F&A rate effective at the time of the award start date, regardless of the rate included at the time of the proposal.

If the rate effective at the award start date differs from the rate included when the work was proposed, direct costs must be reduced to accommodate the increased indirect costs.

Sponsor Rate Adjustments

If a sponsor requires an adjustment to LSU New Orleans's negotiated F&A rate, attach documentation to your Proposal Routing Form. Sponsor-dictated rates which are less than LSU New Orleans's federally-negotiated rate must be submitted for approval by the Vice President for Research & Economic Development and must have sufficient written documentation from the sponsor to support the request for an exception to the negotiated rate.

Return of Recovered F&A

The Office of Research has a policy to return a portion of recovered F&A costs to support colleges, departments, centers/institutes, and principal investigators as well as library and IT services. See IMD 85.002 for more information.

For more information about how LSU New Orleans uses F&A costs, visit the Office of Research FAQ page.