Written by Justo Torres.
Facilities and Administrative (F&A) costs, also known as indirect costs, refer to expenses that support research, projects or general operations but cannot be directly attributed to a specific project or activity. These costs are critical for organizations, particularly universities and research institutions, as they provide essential infrastructure and administrative support necessary for the functioning of projects.
Examples
F&A costs include a variety of expenses, such as building maintenance, utilities (e.g., electricity and water), office supplies and administrative salaries. They also cover costs for accounting, human resources, legal services and IT support. These expenses are incurred regardless of the specific project being undertaken, yet they are necessary for the overall success and sustainability of an organization.
In research settings, F&A costs are typically allocated as a percentage of direct costs, which are expenses that can be directly attributed to a project, such as salaries for research staff or the purchase of materials. Funding agencies, like government bodies, recognize these indirect costs and allow for their reimbursement through grants or contracts.
The rate at which F&A costs are calculated varies depending on the organization and the specific funding source. Institutions negotiate these rates with federal or private funding agencies to ensure proper reimbursement for the use of shared resources. These costs enable institutions to continue supporting research activities without sacrificing the quality of services and facilities essential for their success.
Want to Learn More?
Check out the Indirect Costs guidance by Research Administration and Compliance. You can also review the Cost of Federal Research Infographic by the Council on Governmental Relations.