New Mexico State University F&A Rate Agreement: What You Need to Know
New Mexico State University (NMSU) has recently issued a new Facilities and Administrative (F&A) rate agreement which has raised some questions among its stakeholders. In this article, we will explain what F&A rates are, why they are relevant to NMSU, and what changes this new agreement brings.
What are Facilities and Administrative (F&A) Rates?
F&A rates, also known as indirect cost rates, are the costs incurred by universities and research organizations that are not directly attributable to specific projects or programs. These costs include, but are not limited to, administrative expenses such as office supplies, rent, utilities, and maintenance. F&A rates are established by negotiations between universities and the federal government, and are used as a way to recover indirect costs associated with research grants and contracts.
Why are F&A Rates Relevant to NMSU?
As a research-intensive university, NMSU relies heavily on federal grants and contracts to fund its research activities. These grants and contracts come with indirect cost requirements, which means that NMSU must have an established F&A rate agreement in place to recover these costs.
What Changes does the New Agreement Bring?
The new F&A rate agreement for NMSU was signed in September 2021 and replaces the previous agreement which expired in August of 2020. The new agreement establishes F&A rates for the fiscal years 2022 through 2025 and includes some changes from the previous agreement.
One of the most notable changes is the increase in the F&A rate for on-campus research projects from 47.5% to 49%. This means that NMSU will be able to recover a slightly higher percentage of indirect costs associated with on-campus research projects. The F&A rate for off-campus research projects remains at 26%.
Another change in the new agreement is the addition of a “de minimis” rate of 10% for organizations that have not had an F&A rate agreement in the past. This means that new organizations working with NMSU will be able to recover a small percentage of indirect costs associated with their projects.
Additionally, the new agreement includes updated language regarding cost sharing, which clarifies NMSU`s policies on this matter.
Overall, the new F&A rate agreement for NMSU brings some minor changes that reflect the university`s ongoing efforts to ensure compliance with federal regulations and maximize recovery of indirect costs associated with research projects.
Conclusion
Facilities and Administrative (F&A) rates are essential for universities like NMSU that rely heavily on federal research grants and contracts. The new F&A rate agreement for NMSU includes some changes from the previous agreement, such as an increase in the on-campus F&A rate and the addition of a de minimis rate. These changes reflect NMSU`s ongoing efforts to optimize its indirect cost recovery and comply with federal regulations.