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F&A Rate Application Examples

• Selecting the Correct F&A Rate
• Calculating F&A Costs for a Budget
• Rebudgeting with F&A Costs

The following examples illustrate how to calculate F&A (indirect) costs for a budget, using the correct F&A base.

Example 1 F&A RATE/BASE: 48.5% OF MODIFIED TOTAL DIRECT COST TOTAL AMOUNT AWARDED: $100,000 DIRECT COSTS EXEMPT FROM INDIRECTS: $10,000   DIRECT COSTS F&A   DIRECT + F&A COSTS SALARIES 40,000 19,400   SUPPLIES 8,406 4,077   TRAVEL 3,000 1,455   BENEFITS 9,200 4,462   EQUIPMENT 10,000 0   TOTAL 70,606 29,394 (A) 100,000 Calculation of F&A Recovery: To determine the modified total direct costs subject to indirects, divide the total amount of the award less the amount not subject to indirects (equipment) by 1.485: ($100,000 - $10,000)/1.485 = $60,606 (which is funding amount available for direct costs) Total direct costs subject to assessment = $60,606   Multiply by F&A rate x .485   Total F&A costs $29,394 (A)

Example 2 F&A RATE/BASE: 10% OF TOTAL DIRECT COST TOTAL AMOUNT AWARDED: $100,000   DIRECT COSTS F&A   DIRECT + F&A COSTS SALARIES 50,000 5,000   SUPPLIES 10,000 1,000   TRAVEL 2,000 200   BENEFITS 11,500 1,150   EQUIPMENT 17,409 1,741   TOTAL 90,909 9,091 (B) 100,000 Calculation of F&A Recovery: To determine the total direct costs for this award divide the total amount of the award by 1.10%: $100,000/1.10 = $90,909 When calculating F&A based on TOTAL DIRECT COSTS, the F&A will be applied to ALL direct costs. Total direct costs subject to assessment = $90,909   Multiply by F&A rate x .10   Total F&A costs $9,091 (B)

Example 3 F&A RATE/BASE: 20% OF TOTAL COST TOTAL AMOUNT AWARDED: $100,000   DIRECT COSTS F&A   DIRECT + F&A COSTS SALARIES 50,000 12,500   SUPPLIES 10,000 2,500   TRAVEL 1,000 250   BENEFITS 11,500 2,875   EQUIPMENT 7,500 1,875   TOTAL 80,000 20,000 (C) 100,000 Calculation of F&A Recovery: When calculating F&A based on TOTAL COSTS, the F&A rate applied to the direct costs must be converted to a rate which will produce the correct recovery. In example 3 above, the F&A rate of 20% is applied to the TOTAL COST of the project. ALL costs are included in the calculation (including F&A). Following is the calculation to determine the actual rate to be used for assessing the indirects and determining the amount to be budgeted for both direct and indirect costs: Total costs of $100,000 x 20% = $20,000 Total costs of $100,000 - $20,000 = $80,000 (direct costs that can be assessed) $20,000/$80,000 = 25% (the F&A rate that will be used in calculating the F&A recovery) Total direct costs subject to assessment = $80,000   Multiply by F&A rate x .25   Total F&A costs $20,000 (C)