Facilities and Administration Costs (also called “F&As,” “indirect costs,” “IDC’s,” or “overhead”) are those costs that are incurred for common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. They include categories such as library operations, utility costs, depreciation of buildings and equipment, operations and maintenance costs, grant and contract administration and accounting, and general administrative expenses for central offices such as the President, Provost, Vice Presidents, Human Resources, Purchasing, or similar campus office. See Appendix A, Institutional Use of F&A Funds for information on how these costs are distributed to the College and Department levels.

810.00 Facilities and Administration Rates

MSU’s F&A cost rate is negotiated periodically with the U.S. Department of Health and Human Services. Current rates are found in the OSP Information Sheet. The full F&A cost rate will be applied to all proposals unless the funding agency prohibits F&A costs or otherwise establishes an alternate method for assigning these costs. The PI may not negotiate a reduction in the rate unless approved in advance by the VP for Research or his or her designee. Proposals submitted to state agencies must follow the Board of Regents Policy 404.

820.00 Cost Sharing

Cost sharing or “matching” means the portion of project costs not paid by Federal funds. Per Uniform Guidance, Section 200.306, voluntary committed cost sharing is not expected under Federal research proposals and cannot be used as a factor during the merit review of applications or proposals. There are instances when cost sharing or matching is required and MSU policy allows proposals to include cost sharing only when required by the sponsor as part of the eligibility criteria. Cost sharing under Federal awards are subject to certain Federal regulations which stipulate that cost sharing must come from non-Federal sources. Proposals that list cost sharing must explain how the cost sharing commitments will be met in accordance with MSU’s Cost Sharing Policy, contained in Appendix B.

830.00 Modified Total Direct Costs (MTDC)

As defined in Uniform Guidance, Section 200.68, “Modified Total Direct Costs” means all direct salaries, wages, applicable fringe benefits, materials and supplies, services, travel, and up to $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs. The definition of MTDC has been modified slightly in recent documents to clearly state that the MTDC exclusion is applicable only to the first $25,000 of a subaward, and consequently, is not applicable to subcontractors/vendor agreements.