Understanding the Costs of Conducting Research
When the federal government provides a grant or other award to a university for a research project, a portion of the funds is used directly for the work of the research team to support researcher salaries, graduate students and postdocs, equipment, high-performance computing, field work, research dissemination and more. These are direct costs. Another portion covers necessary research infrastructure and operating expenses that the university provides to support the research. These research expenses, referred to as indirect costs or facilities and administrative (F&A) costs, cover essential infrastructure that supports research, including the operation and maintenance of our research buildings, our libraries, both central and departmental administrative support and resources needed for compliance with federal regulations.
Facilities and administrative (F&A) costs are real and essential costs of conducting research.
These include: electricity, heating and cooling; the maintenance of sophisticated laboratories; human and animal subjects protections; high-speed data processing and storage; security for dangerous chemicals and microbes; disposal of hazardous waste; and regulatory compliance costs. It would be impossible to effectively and efficiently conduct research without incurring F&A expenses. Research institutions cannot conduct research in partnership with the federal government without sufficient government support for these F&A costs.
The U.S. government recognizes F&A expenses as legitimate costs associated with research.
Federal rules specify what is allowable as a direct or indirect cost, and indirect costs are bundled under a single rate proportional to a specified subset of the direct costs to streamline the federal granting and auditing processes. F&A rates for each university are negotiated with the federal government on a regular basis through audited cost studies.
The federal government already caps the amount it covers for administrative and compliance costs at universities.
Like most universities, the University of Washington finds that even current F&A rates do not fully fund all facilities and administrative costs, and the university subsidizes some of the administrative costs. Universities are the only entities – private, public, or non-profit – for which such a limit on recovery of these costs is imposed. The cap remains in place even as federal regulations and associated compliance costs required to conduct research have significantly increased.
Comparing federal F&A reimbursement rates to what foundations pay for F&A costs is comparing apples and oranges.
Foundations categorize and pay grant-related expenses very differently than the federal government does. For example, foundations often categorize some items as direct expenses that federal rules require to be counted as F&A expenses. This further underscores that direct and F&A costs are all part of total research costs and are inseparable when it comes to the actual conduct of research. In addition, much of the required administrative infrastructure for reporting and compliance is driven by federal regulations, not foundations.
Cuts to F&A are cuts to research.
Without F&A, research would not be possible. Although not often visible, the costs associated with these activities and needs are real and must be covered.