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UC DAVIS: Office of Research and Office of Administration October 10, 2008 Deans, Directors, Department Chairs and Administrative Officers Subject: New Facilities and Administrative (F&A) Cost Rate Agreement UC Davis recently completed negotiations with the U.S. Department of Health and Human Services (DHHS), Division of Cost Allocation, regarding a new F&A rate agreement. As you may know, the F&A rate is the mechanism the campus uses to recover its indirect costs of conducting research, instruction, or other a ctivities that are sponsored by federal agencies. The new rate agreement is effective August 29, 2008 and covers the period July 1, 2008 through June 30, 2013. Please refer to http://accounting.ucdavis.edu/EX/UCD_F&A_Rate.pdf for details of the new UC Davis F&A rate agreement. Based on our calculated rate, UC Davis was able to justify an F&A rate of approximately 61% using rules established in OMB Circular A-21. However, our new rate agreement calls for our on-campus organized research rate to stay at its current level of 52.0 percent through fiscal year 2008-09, then increase gradually over several years to 54.0 percent by fiscal year 2012-13, an increase of 2 percent points over five years. Under the rules established in OMB Circular A-21, federal agencies should fund F&A recovery at levels consistent with our new rate agreement beginning August 29, 2008. Further, in order to be consistent with federal regulations, the University will apply the new organized research rate to awards made since July 1, 2008. This may result in some rebudgeting on continuing grants for award years 2009-10, 2010-11, 2011-12, and 2012-13. Awards made before June 30, 2008 will continue at 52.0% for the remaining competitive life of the award. Please refer to http://accounting.ucdavis.edu/EX/fandaexamples.cfm for some examples of changes that PIs should expect in common situations for sponsored projects covered by on-campus organized research rates. If PIs and departmental administrators have questions about what the rate change means for specific grants, they should contact Ahmad Hakim-Elahi in the Office of Research at ahakimelahi@ucdavis.edu or Kathy Hass in Extramural Funds Accounting at kxhass@ucdavis.edu . In addition to the new rates for organized research, instruction and other sponsored activity, the core grant rate for research at the California National Primate Research Center (CNPRC) has changed from 21.5% to 21.0%, the non-core federal grant rate has increased to 53.3%, and a new rate for non-federal grant activity at CNPRC has been established at 71%. Please note that awards covered by the CNPRC are not subject to the fixed rate concept under OMB Circular A-21. The Primate Center is primarily federally funded and involved in a very long-term agreement with the Federal Government. Stan Nosek Barry Klein Vice Chancellor-Administration Vice Chancellor-Research 08-062
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