Dan, our accountants and auditors had a different view.  They said that the
F&A rate was determined and approved with a specific monetary definition of
"equipment", and that we would have to use that definition for all projects
which kept the "old" F&A rate through their competitive
segment.  Therefore,  using a different monetary definition of equipment
was unallowable.  So we had active projects using one definition and newer
ones using another.  The life cycle of overlap is such that about 90% of
the "old rate" awards are gone in three years.

Net result is a reduction of the number of pieces of capital equipment to
be tracked.  Change in F&A recovery is not detectable in the noise of other
factors affecting it.

Chuck

At 05:10 PM 3/23/2004, Daniel S. Rademacher wrote:
>Hi All,
>
>According to NIHGPS (v. 3/01):
>F&A costs awarded may be subject to upward or downward adjustment,
>depending on the type of rate negotiated, and grantees may rebudget
>between direct and F&A costs (in either direction) without NIH prior
>approval, provided there is no change in the scope of the approved
>project. F&A costs are subject to downward adjustment if the proposal that
>served as the basis for the negotiation included unallowable costs.
>
>According to OMB A-21:
>G. Determination and application of F&A cost rate or rates
>7. Fixed rates for the life of the sponsored agreement.
>Federal agencies shall use the negotiated rates for F&A costs in effect at
>the time of the initial award throughout the life of the sponsored
>agreement. "Life" for the purpose of this subsection means each
>competitive segment of a project. A competitive segment is a period of
>years approved by the Federal funding agency at the time of the award. If
>negotiated rate agreements do not extend through the life of the sponsored
>agreement at the time of the initial award, then the negotiated rate for
>the last year of the sponsored agreement shall be extended through the end
>of the life of the sponsored agreement. Award levels for sponsored
>agreements may not be adjusted in future years as a result of changes in
>negotiated rates.
>
>Essentially this means you can internally rebudget F&A recovery on a NIH
>grant within the competitive segment however, they (NIH) will not increase
>your award.
>
>With the above in mind you can adjust your definition for a grant through
>NIH.  You will have to check other agencies to see what they require.
>
>I hope this helps.
>
>Dan
>
>
>At 04:03 PM 3/23/2004 -0500, Herbert B. Chermside wrote:
>>You MUST use the equipment definition in effect at the award of the first
>>budget year in the competitive segment.  That's part of using the same F&A
>>rate.
>>
>>Chuck
>>
>>
>>At 03:08 PM 3/23/2004, you wrote:
>>>I agree with Chuck.  We use our limit of $1,500.  We will even report it
>>>to the Feds as equipment if it's not vested with us. But can I raise
>>>another question? We're planning to shift to $5,000 with the new fiscal
>>>year and F & A proposal. Can we grandfather our old grants at the $1,500
>>>level?  We don't want to adversely affect the PI's since this would
>>>cause additional indirect costs.
>>>
>>>Thanks, Lois Smith,
>>>Associate Controller, Sponsored Programs
>>>The University of Akron
>>>
>>>-----Original Message-----
>>>
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Herbert B. Chermside, CRA
Virginia Commonwealth University
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