1. F&A Rates 101 Basics of F&A rates for Proposals, Grants, & Contracts Dr. Mindy S. Connolly, CPCM Sr. Sponsored Research Officer Office of Sponsored Projects April 2016 April 12, 2016

2. What is a rate?  A value that has 2 variables, usually a number and an effective period  Expect changes in both variables  Sales tax rate example for work at your home  Rate of return on savings example  What a rate is not?  A fixed price  It’s neither fixed, nor a price F&A rate take-aways: 1) Always … a rate per a period 2) Need to apply the effective F&A rate for the applicable period

3. UNM’s F&A Rates Overview  Governed by 2 CFR 200 Federal Regulation  a.k.a, the Uniform Guidance or UG  The UG applies to all new federal awards (contracts, grants, & other agreements)  Applies to any subaward (in or out, at any tier) where the UG applies to the initial award  Federal agencies may and are applying the UG to existing awards too  Implemented via a legally-binding Rate Agreement  From our cognizant federal Rate Determining Official and accepted by a UNM Financial Executive  Current Rate Agreement is effective 3/16/2016  Five pages, including Definitions, Special Remarks, and General sections  Has Predetermined rates for specific dates  Has Provisional rates to use until the agreement is amended  Not following the UG & our Rate Agreement can have negative impacts on UNM Take-away: We have the tools to apply F&A rates appropriately

4. F&A Rate How To:  Apply the applicable rate for the period  Expect a Provisional rate may be adjusted  Same applies to a subaward, in or out  No authority to use a higher or lower rate, unless there is current, valid, public, statutory direction to do differently  Expressly cannot subsidize industry or foreign governments by discounting F&A rates to them  Apply federal F&A rates to MTDC (Modified Total Direct Costs)

5. F&A Rate FAQs  We proposed 2 years ago and were just notified of the award. Isn’t the rate the same as what we proposed?  Only if you proposed the current rate(s) for the current period. Rates in a proposal are estimates, not a fixed price. If the award happened later than the period of performance proposed, we may not have had rate information for the current period at that time or a Provisional rate was proposed and it’s now changed.  This is the first year of the award. Can’t we get the rate fixed later?  There’s no provision for deferring in our Rate Agreement. Need to request the award is correct at the start of our agreement.  The period of performance is only changing a few months. Why is the rate changing?  If the change to a period of performance moves into a period when a different rate is effective, it’s only appropriate to apply the new rate. That may be done via amendment to the agreement or in close-out, usually at the Sponsors discretion.

6. Frequent F&A Rate Reference #1 2 CFR 200.414 c) (1) through (4): (c) Federal Agency Acceptance of Negotiated Indirect Cost Rates. (See also §200.306 Cost sharing or matching.) (1) The negotiated rates must be accepted by all Federal awarding agencies. A Federal awarding agency may use a rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification as described in paragraph (c)(3) of this section. (2) The Federal awarding agency head or delegate must notify OMB of any approved deviations. (3) The Federal awarding agency must implement, and make publicly available, the policies, procedures and general decision making criteria that their programs will follow to seek and justify deviations from negotiated rates. (4) As required under §200.203 Notices of funding opportunities, the Federal awarding agency must include in the notice of funding opportunity the policies relating to indirect cost rate reimbursement, matching, or cost share as approved under paragraph (e)(1) of this section. As appropriate, the Federal agency should incorporate discussion of these policies into Federal awarding agency outreach activities with non-Federal entities prior to the posting of a notice of funding opportunity. We look for consistent application of our F&A rates or valid authority to do otherwise

7. Frequent F&A Rate Reference #2 2 CFR 200.331 (in Subrecipient Monitoring section), Requirements for pass- through entities All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: … (xiii) Indirect cost rate for the Federal award (including if the de minimis rate is charged per §200.414 Indirect (F&A) costs). … (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; … (4) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government or, if no such rate exists, either a rate negotiated between the pass-through entity and the subrecipient (in compliance with this part), or a de minimis indirect cost rate as defined in §200.414 Indirect (F&A) costs, paragraph (f); Application of the Rate Agreement ‘logic’ is the same if we are a subrecipient or have subrecipients.

8. Questions??? ___________________ Next RAN Meeting F&A Rate Topic – F&A Rate Mythbusting!

9. F&A Rate References  UNM’s current rate agreement: http://osp.unm.edu/sites/default/files/New%20Federally%20Negotiated%20F%20%26% 20A%20Rates.pdf  2 CFR 200: http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl  2 CFR 200.414: http://www.ecfr.gov/cgi-bin/text- idx?SID=5e3fc462cdda114e11d520294457f462&mc=true&node=se2.1.200_1414&rgn=div 8  2 CFR 200.331: http://www.ecfr.gov/cgi-bin/text- idx?SID=5e3fc462cdda114e11d520294457f462&mc=true&node=se2.1.200_1331&rgn=div 8