Federally negotiated F & A costs are charged against modified total direct costs (MTDC). Modified total direct costs exclude equipment, capital expenditures, charges for patient care and tuition remission, rental costs, scholarships and fellowships, as well as the portion of each subgrant/subcontract in excess of $25,000. It is UNL’s practice to exclude the total amount of any subgrant/subcontract to its sister institutions, UNK, UNO & UNMC.At UNL, equipment is defined as an item having an acquisition cost of $5,000 or more and a useful life of more than one year. Please note that on projects whose budgets include F & A rates other than our federally negotiated rates, F & A is generally charged against total (all) direct costs.
You should be aware of the effect of rebudgeting on the F & A costs charged to a project. F & A costs are based on actual award expenditures, which may differ from expenditures originally budgeted in the proposal.
In the example shown below, equipment expenditures (non-F & A bearing) were $5,000 more than the budgeted amount, while other direct expenditures were $3,390 less than budgeted, resulting in a $1,610 reduction in F & A costs.
Expenditure |
Budgeted |
Expenditures |
Salaries and Benefits |
25,000 |
21,610 |
Operating Expenses |
5,000 |
5,000 |
Equipment* |
12,000 |
17,000 |
Total Direct Costs (TDC) |
42,000 |
43,610 |
Total MTDC |
30,000 |
26,610 |
F & A (47.5% of MTDC) |
14,250 |
12,640 |
|
|
|
Total (TDC + F & A) |
56,250 |
56,250 |
*excluded from TDC in calculating MTDC
If you budget for a non-F & A bearing expense but then spend more in an F & A bearing account category, you must reduce the amount you can spend on total direct costs for the correct F & A to post. In the next example, equipment expenditures were $7,000 under the budgeted amount, while other direct charges were $4,746 more than the budgeted amount. The result is a $2,254 increase in F & A costs.
Expenditure |
Budgeted |
Expenditures |
Salaries and Benefits |
25,000 |
29,746 |
Operating Expenses |
5,000 |
5,000 |
Equipment* |
12,000 |
5,000 |
Total Direct Costs (TDC) |
42,000 |
39,746 |
Total MTDC |
30,000 |
34,746 |
F & A (47.5% of MTDC) |
14,250 |
16,504 |
|
|
|
Total (TDC + F & A) |
56,250 |
56,250 |
*excluded from TDC in calculating MTDC