Facilities and Administrative Costs (F&A Costs)
Facilities and administrative costs (also referred to as indirect or overhead costs) represent the inherent costs of infrastructure and support that are not provided at the unit level. F&A costs also refer to costs which cannot be easily attributed to a single project. Examples of these kinds of costs include routine miscellaneous photocopying and postage, UNC General Administration accounting and IT support, and physical plant or facilities services. Because sponsored activities benefit from these resources, their associated costs must be reflected in sponsored programs budgets. Budgets that include the full allowable F&A represent the true cost of projects at UNC, and when budget neglect to include F&A, these inherent costs are absorbed by UNC as a whole.
To determine appropriate F&A costs for inclusion in a particular budget, the negotiated F&A rate is applied to a base project cost. This base cost is referred to as the “Modified Total Direct Costs” (MTFC). The MTFC consists of all direct costs for a project, excluding capital expenditures. In this case, capital expenditures refers to equipment costing more than $5,000 per item, repairs and renovations and construction, and that portion of each subcontract in excess of the first $25,000.