Return of Recovered F&A Costs

Rates specifically relate to RIT Central Administration Services and General Institutional costs such as heat, light, and power, support services, etc. Various sources of revenue, whether from recovery of F&A Costs on sponsored projects, tuition, gifts from donors, as well as other sources, are essential to maintain the fiscal viability of the University.

The following facilities and administrative cost rates have been approved by the US Department of Health and Human Services (DHHS), RIT’s cognizant federal agency, to be in effect from 7/1/20-6/30/24.

*Other Sponsored Activity refers to programs and projects financed by Federal and non-Federal agencies and organizations which involve the performance of work other than instruction and organized research. Examples of such programs and projects are health service projects, and community service programs.

The new rates will be in effect for awards that begin on or after the date approved by DHHS. If the proposal was submitted with a previous F&A rate, when possible, SRS will attempt to renegotiate the award amount to reflect the new rate. If the sponsor is unable to adjust the F&A rate, the new rate will be assessed to the project.

For existing awards, the rate in effect at the time of the initial award will be charged to the grant/contract for the life of the award (Note: for this purpose, “Life” means each competitive segment of a project). Rates for existing awards will change to the rate in effect at the beginning of the next competitive period.

In order for RIT to maximize its success with its research goals, F&A monies must be used in direct support of the RIT research enterprise. Common uses of these monies include, but are not limited to, the following:

• Funding for teaching course offloads to perform research;
• Funding for graduate student stipends, tuition waivers, travel, and other expenses incurred by graduate students while performing research;
• Funding for post-doctoral researchers;
• Salary enhancements when compliant with RIT, state and federal policies;
• Travel to meet with program directors, present papers, give invited talks, etc.;
• Research supply/equipment purchases;
• Books, journals, papers and other similar expenses related to scholarship and research;
• Faculty start-up packages for research programs;
• Laboratory enhancements for research purposes; and
• Technology and Administrative staff to support research activities.

Units that receive funding from F&A distributions may be asked to provide documentation and reports indicating how these monies are used.

For F&A costs earned after July 1, 2011, the Institute's procedure for distribution of recovered F&A costs is as follows:

1. General Institute

55% of recovered F&A costs will remain with the General Institute to support the operating budget. This amount is intended to cover a portion of the costs associated with several offices directly involved in the pre and post award administration of sponsored projects including the Office of the Vice President for Research (OVPR), Sponsored Research Services, Sponsored Programs Accounting and the Intellectual Property Management Office, as well as other costs associated with human resource administration, accounting, payroll processing, compliance, database administration, etc. Annually, during the budget process, the Finance & Administration Division will establish a budget for recovery of F&A costs.

2. Office of VP of Research (OVPR)*

23% of F&A costs recovered will be returned to the OVPR who will use some of the funds to support projects funded under the Accelerating Research Funding Program. The awards will be made to support ongoing proposal writing, soft money gaps, lab support, lab equipment, and other research support activities. Programs and PIs may request funds from this pool annually. Funds will be allocated by OVPR based upon established need, priority of the request, and availability of funds (see section -"Process to Request Returned F&A Funds from OVPR" below).

3. Deans

8 % of F&A costs recovered on a faculty or staff members' (e.g. the PI) sponsored projects will be returned to the Dean. For projects involving PIs and co-PIs from multiple units, a split of the F&A can be agreed upon and indicated onthe PRF. The College portion of the F&A return will be distributed across participating units following a distribution agreed upon at the time the proposal was approved as indicated on the Proposal Routing Form (PRF). These discretionary funds must be used in support of scholarship related activity (i.e., support seed grants for new faculty or new scholarship agendas for existing faculty).

4. Department

4% of F&A costs recovered on a faculty or staff members’ (e.g. the PI) sponsored projects will be returned to the home Department to grow research.

5. Principal Investigator (PI)

10% of the F&A costs recovered on the PIs' sponsored projects will be returned to the PI to be used in support of on-going scholarship/research initiatives.

* While recovered F&A will be distributed to the Deans, Departments and PIs per the information in items # 3, #4, & #5, according to the timeline described in the section "Process for Distributing F&A Recovery" below, funds will not be returned to the OVPR until the annual budgeted F&A recovery amount has been met. 100% of the amount over and above the budgeted recovery amount will be returned to the OVPR.

If the distribution of recovered F&A costs approved on a PRF for the Colleges changes during a project, the amended distribution should be agreed upon between the parties. A new PRF is not necessary, SPA will follow the original distribution and the parties can redistribute the funds amongst themselves after the annual distribution has occurred.

The term Department will refer to department, center or school in which the principal investigator(s) have a primary assignment or to the Intellectual Contributions Committee in the Saunders College of Business.

• GIS
• NTID
• Enterprise Centers/Laboratories
• F&A Return Designated Research Centers of Excellence
• Other

1. GIS

• Federal and State Awards - GIS receives 67.5% of federal and state awards when the F&A rate assessed on the award is the maximum allowed by the sponsor (typically, the rate negotiated by RIT with DHHS). When GIS negotiates a lower rate (than the approved rate) with the sponsor, the return is reduced to 50%.
• Private Awards - GIS receives 100% of F&A assessed on private awards.

2. NTID

The return of F&A for sponsored projects conducted in the National Technical Institute for the Deaf will remain at the previously agreed upon amounts. 50% of the remaining balance will remain with the General Institute; the balance will be returned to the OVPR.

3. Enterprise Centers/Laboratories

In addition to the delivery of non-credit bearing educational services, a primary function of an enterprise center is to provide product testing, training, and/or short term problem solving for outside entities on a fee for service basis. Typically, there is no intellectual property associated with these activities Enterprise Centers are primarily self-supported and receive minimal (e.g. salary funding for the Director but no other operating budget support) to no budget allocation from the University for their operations. They are financially structured to operate based on yearly pre-determined revenue and expense targets set by the respective College Dean, Director or Vice President.

Current Enterprise Centers include:

In recognition of the self-supporting financial structure for Enterprise Centers, recovered F&A costs will be distributed as follows: 1) 55% to General Institute and 2) 45% to the enterprise center, upon approval of the applicable Dean. (Note: the return of F&A for sponsored projects conducted in IPI will remain at the previously agreed upon amounts; 50% is returned to IPI and the balance of 50% remains with the General Institute.).  

Federal procurements for enterprise activities are managed in the unit operating account.  Even though the financial activity is housed in the units' operating account, the Enterprise center is still required to provide individual PRFs with the federal procurement paperwork from the sponsor or, if roll-ups listings are used instead of PRFs, copies of the procurement paperwork must be submitted monthly along with the rollup activity listing.  Enterprise centers are responsible for the administrative oversight of these procurement projects.

4. F&A Return Designated Research Centers of Excellence

A Designated Research Center of Excellence is a program with a well defined interdisciplinary research focus involving multiple externally-funded projects, with multiple PIs, and support and/or research staff, some of whom are entirely supported by soft money funding (i.e., salaries paid from externally funded grants & contracts) and laboratory equipment that requires ongoing support through technicians and/or service contracts.  The institutional expectation is that these centers are self-sustaining through their grant and contract activities.  However, in recognition that there are necessary expenditures for the on-going support of these large centers that cannot be charged directly to research grants, the university will provide an enhanced return provided certain annual benchmark are achieved (i.e., minimum amount of annual expenditures recorded on externally-funded projects housed within the research center/lab, including capital, must average at least $.5M per year in total expenditures (not including F&A) for a period of at least the past two consecutive years).

If the distribution of recovered F&A costs for the Research Center/Laboratory changes at any point (faculty member joins or leaves) throughout the project from what was originally agreed upon; a new Proposal Review Form (PRF) containing the updated F&A distribution must be completed and circulated for signature to all impacted parties (i.e. principal investigators, department heads or center directors, deans).  The revised PRF is forwarded to SRS so F&A distribution records can be properly updated.  The new distribution will be applied to the recovery of F&A costs for the next fiscal year.

The Research Center/Laboratory designation is valid for one year; the fiscal year the application (or redesignation) is approved by OVPR.  Applicants designated as a Research Center/Laboratory in August will receive recovered F&A costs according to the process described in #4 above for all F&A earned from the current fiscal year.  If at the end of the fiscal year, the Research Center/Laboratory did not achieve the required $500K average expenditure level (excluding F&A), the designation will continue for one more year on a provisional basis.  If after completion of the second year, the required average expenditure level is not reached, the designation will be removed.

5. Other

Unless explicitly stated in items 1 - 4 above, all other exceptions (i.e., amounts that differ from the percentages stated in the distribution procedure above), will be approved by the OVPR and be made out of F&A recovery funds that have previously returned to OVPR.

On an annual basis, Sponsored Programs Accounting (SPA) will return recovered F&A costs on all signed awards per the distribution policy above. The annual distribution is based upon F&A recovered as of the end of the Institute's prior fiscal year (June 30th) and will occur prior to the August accounting close process. Deans, Departments, Research Centers, PIs and others will be notified of the amount of their F&A return in September.

 In January, SPA will process a secondary F&A distribution to return F&A on awards that were removed from contingency after the annual distribution occurred.  The secondary distribution is also based upon F&A recovered as of the end of the Institute’s prior fiscal year.

 If you have questions about a specific F&A distribution, please contact SPA at 475-2169. For all other questions or to obtain additional information about the Return of Recovered Facilities and Administrative Costs Procedures, please contact OVPR at 475-2055.