Cost Accounting Rates

1. What is the Rate and how is it used?
The Facilities and Administrative Rate is a rate used by institutions that receive federal grant and contract funding. The rate allows the awardee institution to recover general institutional costs that are incurred for common or joint objectives that cannot be readily and specifically identified to a particular sponsored project, instructional activity or any other institutional activity. These costs include the following:

  • Operation and maintenance of buildings and grounds
  • Depreciation of buildings and equipment
  • General and departmental administrative expenses
  • Sponsored project administrative expenses
  • Student administration and services expense (for instruction and branches only)
  • Library costs

The rate is applied to each grant or contract by multiplying the applicable F&A rate by the modified total direct costs charged to that grant or contract. The F&A expense is then billed to the awarding agency along with the direct costs, in accordance with OMB Circular A-21. NMSU then treats the income recognized from the F&A rate as unrestricted income and distributes it to various NMSU units, based on internally negotiated agreements.

2. When is the Rate Calculated and How is it Approved?
NMSU’s Facilities and Administrative Rate (F&A Rate) is calculated and proposed annually to our Federal Cognizant Agency, the Office of Naval Research (ONR). ONR will then schedule an audit to be performed by the Federal Cognizant Audit Agency which is the Defense Contract Audit Agency (DCAA). Once the audit is performed, a report is filed by DCAA to ONR. The negotiation of the rate between NMSU and ONR will then begin and will be based on our proposal and the audit performed by DCAA. The ideal process normally occurs in the following time line:

 

Time Period Information Processed
July-December Incurred Cost Report for Previous Fiscal Year is completed and submitted.
January Proposal for next year is completed and submitted.
February-March Audit by DCAA occurs.
April-May Negotiations between ONR and NMSU begin and agreement on final rates to become effective July 1 is reached.

Note that any changes to accounting procedures, either mandated by the state and/or federal government or voluntarily entered into by NMSU, will delay the time line listed above, depending on when the change takes effect and how soon cost impact information can be gathered.

3. How does the Rate Calculation Process Work?
The rate calculation is based on actual cost from the most recent fiscal year end and adjusted based on known changes that will occur two years later. For example, the current rate calculation process is taking place as follows:

 

  • Rate is calculated on FY2013
  • Adjustments are made for anticipated changes that will occur in FY2015
  • Rate, when approved, will be applied July 1, 2014 – June 30, 2015

Current F & A Rates

Negotiated

Rates effective from 7/1/16 to 6/30/18

Sponsored Instruction (inc. Ag instruction)

48.00%

Organized Research (On Campus)

48.00%

Organized Research (Off Campus)

26.00%

Agricultural Research (AES Only) (On-Campus)

42.90%

Agricultural Research (AES Only) (Off-Campus)

26.00%

Other Sponsored Activities (Public Service) (inc. AES PS) (On-Campus)

33.20%

Other Sponsored Activities (Public Service) (inc. AES PS) (Off-Campus)

26.00%

Branch Colleges

48.00%

 

Current Fringe Rates

Negotiated

Rates effective from 7/1/16 to 6/30/17

Regular Employees

36.50%

Non-Regular Employees

21.10%

Student Employees

1.10%

Graduate Assistant

1.30%

 

Prior Year F & A Rates

Negotiated

Rates effective from 7/1/14 to 6/30/16

Sponsored Instruction (inc. Ag instruction)

46.00%

Organized Research (On Campus)

46.00%

Organized Research (Off Campus)

25.00%

Agricultural Research (AES Only) (On-Campus)

41.00%

Agricultural Research (AES Only) (Off-Campus)

26.00%

Other Sponsored Activities (Public Service) (inc. AES PS) (On-Campus)

32.20%

Other Sponsored Activities (Public Service) (inc. AES PS) (Off-Campus)

26.00%

Branch Colleges

46.00%

 

Prior FY Fringe Rates 

Negotiated

Rates effective from 7/1/15 to 6/30/16

Regular Employees

35.00%

Non-Regular Employees

20.20%

Student Employees

0.40%

Graduate Assistant

0.80%