University of Louisville
|| OFFICIAL |
Transfer of F&A Costs Recovery (Indirect) Funds
INITIAL ADOPTION AND EFFECTIVE DATE
July 27, 2005
University Community (administrators, faculty, staff and
REASON FOR POLICY
private and locally funded grants and contracts, and all of the federally
funded grants and contracts, have a provision for Facilities and Administration
(F&A) cost recovery built into them. This recovery provision is provided to
fund the cost of administering and providing infrastructure support to the
grant or contract effort. The F&A recovery rate charged is a percentage of
direct cost and is negotiated with the federal government based on real costs,
incurred by the University, in support of extramurally funded activities.
F&A recovery rate is used as a "benchmark" for other grants and
contracts that are private, local and state supported. The University on-campus
F&A cost recovery rate is listed in the ULRF Research Handbook
(http://research.louisville.edu/res-handbook/res-hdbk.html). The employment of
this overhead rate to applicable grants and contracts generates revenue for the
The gross F&A indirect cost recovery accumulated within
the University of Louisville Research Foundation, Incorporated (ULRF) in a
given fiscal year shall be distributed under the following plan:
- Gross F&A shall be budgeted in
accordance with projected annual award activity and the prevailing F&A
rates utilized by the University.
- The following items are deducted
from the gross:
- The Office
of the President has authority to identify certain fixed costs related to
research for distribution from the F&A pool prior to allocating and
transferring the remaining balance to the University of Louisville
(University) and the ULRF. This may include costs such as those
designated to pay for the University Scholars Program, debt service on
new research facilities, capital equipment, and faculty incentive funds.
percent (20%) of the gross F&A cost recovery funds received in a
given fiscal year shall be retained by the ULRF for the purpose of
providing Research Infrastructure Funds (RIF) as specified in the Research
Foundation Handbook. Currently these funds are
Investigator RIF - The fund is equivalent to ten percent (10%) of facilities and
administrative costs awarded on extramural grants & contracts. Individual
allocations to grant recipients, or principal investigators, are made by
transferring funds to the RIF speedtype at the close of the month in which the
grant expenditures are made.
RIF - The fund is equivalent to ten percent (10%) of facilities and administrative
costs awarded on extramural grants & contracts. Departmental allocations
are made by transferring funds to the departmental RIF speedtype at the close
of the month in which the grant expenditures are made.
3. Twenty percent (20%) of the net remaining F&A cost recovery funds received in a given fiscal year shall be retained by the ULRF. These funds shall be allocated to the President, Provost Executive Vice
President for Health Affairs and Executive Vice President for Research and Innovation (EVPRI) to bolster sponsored research activities at the University including, but not limited to, equipment matching
requirements, research faculty recruiting packages, and other programs in support of the research enterprise.
4. The remaining eighty percent (80%) of the F&A cost recovery funds received in a given fiscal year shall be transferred to the University's General Fund (sometimes referred to as the current unrestricted
fund). These funds partially remunerate the general fund for costs incurred throughout the University and for specific research administrative expenses.
- Each month the Controller’s Office
shall identify the gross amount of overhead charged to all applicable
grants and contracts during the period. These gross F&A charges are
automatically debited to account 577100 for all applicable grant
speedtypes according to the prevailing contractual F&A rates and are
swept into the Research Foundation – Facilities and Administrative
speedtype Z1340, account 426430.
- The budgeted, fixed costs approved
by the Office of the President are transferred by authorized Office of the
EVPRI personnel from the speedtype Z1340 using account 573000 with a
corresponding account 473000 credit posted to the target speedtype that
corresponds to the Office of the EVPRI’s budget plan.
- Twenty percent (20%) of this gross
F&A is allocated to ULRF for the RIF programs through an automated
transfer generated under the authority of the Grants Division within the
Office of Sponsored Programs The entry employs the transfer account 573000
for the expense transferred from Z1340 with a corresponding revenue
transfer account 473000 that is credited to the various RIF speedtypes
assigned to departments and principal investigators.
- The Controller’s Office shall
transfer the remaining overhead recovery funds as follows:
percent (80%) of the net remaining combined totals of on-campus overhead
recovery and off-campus overhead recovery shall be transferred (using the
573000 and 473000 accounts) to a General Fund speedtype entitled
“Facilities & Administrative” (30323).
percent (20%) of the net cumulative year-to-date F&A recovery is
transferred (using the 573000 and 473000 accounts) to the various
speedtypes identified for the purposes described under policy item 3 above.
The speedtype Z1340 should be reconciled and cleared of one hundred
percent (100%) F&A recovery at the end of each fiscal year by the
- Any charges or credits posted to
the Z1340 speedtype entitled “Facilities & Administrative” that are
not expressly approved within this policy shall be identified by the
Controller’s Office for removal and reclassification to an alternate
speedtype working in conjunction with the affected department(s).
month unallowable expenses on active grants shall be reallocated from each
affected grant to an appropriate departmental program prior to the final
month-end F&A calculation. Once all monthly F&A is credited to the
Z1340 speedtype, the Controller's Office determines the appropriate overhead
amounts to transfer in accordance with the distribution plan. At the
University, grants are charged for F&A by an automated process based on
actual expenditures posted each month.
Office of Budget and Financial Planning shall project each year, as part
of the annual operating budget development process, an amount to be
budgeted for F&A cost recovery funds. This activity will be
accomplished in concert with other central administrative offices, e.g.
Controller's Office, Office of the EVPRI, etc. The projected amount of
F&A shall be budgeted as a line item revenue source within the
University's General Fund for the respective fiscal year's budget.
Grants Division will be responsible for the setup and on-going maintenance
of F&A calculations in the Grants Management module of the
University’s financial system. OGM will also be responsible for the setup
of Research Infrastructure Funds (RIF) and University Scholars calculation
in the Grants Management module of the University’s financial system.
Controller’s Office shall be responsible for monitoring, on a monthly
basis, the funds received from F&A cost recovery sources and transferring
the University’s percentage to the general fund. The Office of the EVPRI
distributes its portion of the funds. In addition, the Department of
Sponsored Programs shall prepare a final reconciliation of F&A charges
on an individual grant as part of “closing out” the grant and will make
any necessary adjustments deemed appropriate.
Investigators, Unit Business Managers, or other individuals charged with
the responsibility for reconciling individual grants will reconcile
F&A charges for each grant on a monthly basis to ensure the F&A is
being calculated and charged correctly. Problems will be sent via email to
the Grants and Contracts Accounting section in the Controller’s Office.
Problems should be reported the same month, or accounting period, that
they are identified.
Business Managers and other individuals charged with the responsibility
for reconciling departmental and individual Research Infrastructure Funds
(RIFs) will reconcile these programs monthly to ensure that overhead
recovery funds transferred to these programs are being calculated
Vice President for Finance and Chief Financial Officer;
Executive Vice President for Research and Innovation
RESPONSIBLE UNIVERSITY DEPARTMENTS/DIVISION
Accounting and Financial Reporting
Louisville, KY 40292
SPA Grants Office
Campus for Innovation & Entrepreneurship
300 E. Market Street, Suite 300
Louisville, KY 40202-1959
Revision Date(s): 2/6/2020; 11/1/2016;
Reviewed Date(s): 2/6/2020; 11/1/2016; 3/1/2010; 7/1/2005
The University Policy and
Procedure Library is updated regularly.
In order to ensure a printed copy of this document is current, please
access it online at https://louisville.edu/policies.