Ms. Gravely,

1) In compliance with OMB A-21, the University of Minnesota charges our local
F&A rates to the Subcontract total costs, up to the first $25K (regardless of
Subcontract project period).

2) Specifically, A-21 provides that universities may apply rates in the
following manner:
"F&A costs shall be distributed to applicable sponsored agreements and other
benefiting activities within each major function on the basis of modified total
direct costs, consisting of all salaries and wages, fringe benefits, materials
and supplies, services, travel, and subgrants and subcontracts up to the first
$25,000 of each subgrant or subcontract (regardless of the period covered by the
subgrant or subcontract)."
http://www.whitehouse.gov/omb/circulars/a021/a021.html

Please note that A-21 permits the Subcontract total cost basis, since the total
Subcontract costs become a Direct Cost for universities.

3) As another point, universities incur costs in monitoring/administering
Subcontractor F&A rates in terms of not only the budgeting, billing and payment
processes but also the necessary documentation for OMB A-133 "Subreceipient
Monitoring" purposes (indeed, a laborious task!).

Accordingly, these are allowable university costs that may be reimbursed via F&A
rate application.

Regards,
Steve

====================================================

On 4/22/2003, "Gravely, Celia" wrote:

> We are having a discussion on how to assess F&A on subcontracts.
>
> Question:
> You have a subcontract for a total of $30,000. Of this amount $20,000 is
> direct costs and $10,000 is the subcontract institution's F&A. Would you
> assess your F&A (as the prime institution) on only the $20,000 of direct
> costs or would you assess your F&A on the allowed $25,000 (our negotiated
> F&A agreement states we can assess F&A to the first $25,000 of the
> subcontract)?
>
> Thanks to all who will reply. It is a policy question here and we are trying
> to see how other institutions handle the assessment of F&A on subcontracts.
>
> Thanks!
>
> Celia Gravely
>
> UF Bridges Project
> PO Box 113359
> 201 SE 2nd Avenue, Suite 215
> Gainesville  FL  32611-3359
> Phone: 352-316-2485
> FX:  352-846-2508
>
> ======================================================================
>  Instructions on how to use the RESADM-L Mailing List, including
>  subscription information and a web-searchable archive, are available
>  via our web site at http://www.hrinet.org (click on "Listserv Lists")
> ======================================================================

======================================================================
 Instructions on how to use the RESADM-L Mailing List, including
 subscription information and a web-searchable archive, are available
 via our web site at http://www.hrinet.org (click on "Listserv Lists")
======================================================================