University Direct Cost Recovery on Sponsored Project Activities [Research, Scholarly and Creative Activities, and Discovery Including Fee for Service] as Affecting the Collection of Facilities and Administrative Costs
- Kansas State University will pursue full costs of sponsored project activities funded by extramural sponsors. The full costs include:
- All direct costs required to complete the sponsored activity.
- The Facilities and Administrative [F&A] costs borne by the University but which are not included in the direct costs. The F&A cost is a federally negotiated rate.
- Limited exceptions exist, described below, as defined by government statutes or policy.
- For-profit organizations will be expected to provide full costs of sponsored projects. Additional fees may be required for their exclusive limited licensing of intellectual properties resulting from University Research, Scholarly and Creative Activities, and Discovery (RSCAD) activities.
- The Office of PreAward Services may not approve proposals, awards, or contracts which do not adhere to these policies.
- The Vice President for Finance will not approve Fee-for-Service schedules of charges which do not adhere to these policies.
Costs on sponsored projects are divided into two major categories: (1) direct costs and (2) facilities and administrative (F&A) costs [indirect costs or overhead].
- Direct costs are those attributed to the scope of work of a particular project. Examples include project-specific salaries and fringe benefits for personnel, materials and supplies, travel, equipment, tuition, laboratory fees, shipping, and long distance telephone charges.
- F&A costs [indirect costs or overhead] are pooled project support costs that cannot be credited on a project-specific basis, but support the facilities and administration required for RSCAD activities supported by extramural sponsors. By including these costs, each sponsored activity contributes to these pooled costs. By not including these costs, the University and the taxpayers of Kansas support a large percentage of the work.
- Government regulations require that the approved F&A cost rate be applied consistently to ensure that the government is provided the most favorable costs with respect to other sponsors. There is intense scrutiny to insure that the F&A rate is applied to all sponsored projects.
- The Kansas Board of Regents’ policy requires that sponsored projects be funded on a full cost basis unless such recovery is restricted by law or other public policy.
- Some government sponsors limit the payment of F&A costs by statute and/or policy. This situation is encountered with state agencies and some federal agencies such as the U.S. Department of Agriculture (USDA) and the U.S. Department of Education. If so, the differential between the sponsors’ mandated rate and the federally negotiated rate will be a university cost share. When funding flows from a federal sponsor through an intermediary sponsor [federal flow-through funds], the F&A cost rate policy of the federal sponsor will always apply.
- Deviations from the approved F&A cost rate may be considered for organizations with published policies, consistently applied and applicable to all applicants, that reduce full cost recovery.
- For projects requiring an exception, requests must use the Kansas State University Cost Sharing Form with substantiating documentation attached. This form is routed through the authorizing authority for each requesting department(s), college(s) or administrative office(s) to the Vice President for Research for final review and approval.
All budgets on sponsored projects must be reviewed and approved by PreAward Services prior to being provided to a sponsor. Requests for waivers of F&A or other forms of cost sharing without PreAward Services prior review and the Office of the Vice President for Research approval will not be considered.
Submission of a budget to external sponsors without the required prior review and approval through PreAward Services is a violation of University policy.