Say Hello, Waiver Goodbye

In a department, administrators and PIs have a lot of room to negotiate with other institutions when it comes to budgets involving awards and subcontracts.  Personnel effort?  That’s a classic.  Materials and supplies?  Probably your first stop.  Indirect cost percentage?  Slow your roll, holmes.

 

If the project is federally-sponsored, chances are slim that you’ll be successful in  your quest F&A reduction below our negotiated 54%*.   There are times when a lower F&A rate is acceptable without waiver/permission; for instance, the funding opportunity announcement caps the rate at lower than our negotiated rate, or the award is being transferred from another entity with direct cost equivalency.  Anything else requires a waiver with approval from the Vice Dean and SPA.  You cannot negotiate a reduced F&A on your own.

 

Here at Wayne State, the waiver request process begins with an IDC Waiver form. The Research Administrator and the PI should initiate the request, and it must be approved by the PI, the department chair, and the Vice Dean for Research before being sent for approval to SPA. The Vice Dean for Research will consider requests for Indirect (F&A) cost waivers in very limited circumstances, so be sure your justification is sound.  Here are some examples that may be considered on a case-by-case basis:

  • Capped awards
  • Seed grants which may attract larger awards
  • Only available source of funds in an area
  • Strategic partnerships
  • Awards which include equipment or building funds

 

If you’re just trying to make a proposal look more competitive, or  the PI/department failed to submit the proposal via approved institutional channels (e.g., through the Vice Dean or SPA) prior to submission to the sponsor, you’re out of luck.  Wayne State’s acceptance of an award with an unapproved F&A reduction does not constitute acceptance of the rate.  If you are awarded with a reduced F&A that was not properly approved, you must renegotiate at the time of award, otherwise the department will be responsible for cost-sharing the portion of the F&A not paid by the sponsor.

 

Questions?  You know where to find us!

 


* 54% is our federally-negotiated rate at the time of this post.

Applied [Budget] Transfer

If you’re welcoming a new faculty member to your department, there’s a good chance that you’re welcoming a new project or two as well.  Once you have received the NIH-approved relinquishing statement from the former institution, you’ll need to put together a new budget to satisfy both SPA and the Change of Grantee Organization SF 424.  (On a related note, the NIH made some updates to the SF 424 Application Guide and released it last Friday, July 25, 2014.  Edits are noted in purple.)  When building your transfer budget, these points may be helpful:

 

  • Your first year budget should match the amount on the approved relinquishing statement.  Any following out years should match the awarded direct costs on the original Notice of Grant Award (NOGA).
  • While direct costs must match the NOGA, indirects are permitted to be generated based on Wayne State University’s applicable F&A rates.  This will change the overall dollar amounts awarded in each year; that’s OK.
  • Modular submission is not permitted for a transfer/change of grantee organization.  HOWEVER, if desired, an award that was submitted as modular during the proposal phase has the option during transfer to complete only the costs for the PD/PI (Section A), and include the remainder of the direct costs under Section F (Other Direct Costs) Item 8, and Section H (Indirect Costs).  Otherwise, a detailed budget should be utilized.

 

If you’re fortunate enough to be transferring an award to your department, we’re here to help with any questions you may have!  For further details, take a look at the text of PA-14-078.

 

 

Warning: Explicit Language

Most proposal project periods are not going to neatly start on October 1, and will therefore span multiple rate periods in our DHHS agreement.  In order to draw the necessary attention to Wayne State’s variable negotiated rates (and how to express them), you should include language in your budget justification under an “Indirect Costs” heading.  For a little guidance, take a look at the sample language provided here:

* Note:  The italicized portion of this language comes directly from our rate agreement.

 

Indirect Cost Calculations

Wayne State University uses Modified Total Direct Cost (MTDC) to calculate indirect costs.  Modified total direct costs, consisting of all salaries and wages, fringe benefits, materials, 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).  Modified total direct costs shall exclude equipment, capital expenditures, charges for patient care, student tuition remission, rental costs of off-site facilities, scholarships, and fellowships as well as the portion of each subgrant and subcontract in excess of $25,000. The Wayne State University F&A Rate Agreement is negotiated with the Department of Health and Human Services (DHHS), fully executed on November 6, 2014. The agreement has varied rates per fiscal year (10/1 – 9/30). Two F&A rates are applicable to [NUMBER OF PERIODS THAT SPAN MORE THAN ONE RATE] periods:

  • Project Period [X] (beginning [PROJECT PERIOD X START DATE]): [RATE A]% applies for [FIRST NUMBER OF MONTHS] months, [RATE B]% applies for [REMAINING NUMBER OF MONTHS IN PERIOD] …

[APPLICABLE RATE]% applies to all remaining periods.

 

Practical Application: If, for instance, you have a project with 5 periods that beings on April 1, 2015, the indirect cost language included in your budget justification may look like this:

 

Indirect Cost Calculations

Wayne State University uses Modified Total Direct Cost (MTDC) to calculate indirect costs.  Modified total direct costs, consisting of all salaries and wages, fringe benefits, materials, 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).  Modified total direct costs shall exclude equipment, capital expenditures, charges for patient care, student tuition remission, rental costs of off-site facilities, scholarships, and fellowships as well as the portion of each subgrant and subcontract in excess of $25,000. The Wayne State University F&A Rate Agreement is negotiated with the Department of Health and Human Services (DHHS), fully executed on November 6, 2014. The agreement has varied rates per fiscal year (10/1 – 9/30). Two F&A rates are applicable to [2] periods:

  • Project Period 1 (beginning [04/01/2015]): [52.5]% applies for [6] months, [53.0]% applies for [6] months
  • Project Period 2 (beginning [04/01/2016]): [53.0]% applies for [6] months, [54.0]% applies for [6] months

[54.0]% applies to all remaining periods.

 

Feel free to copy-and-paste and change the [BRACKETED/BOLDED] values to those that apply to your project; this material was intended to be shared!  In case you missed it earlier this week, our F&A calculation spreadsheet will help you figure out your own values.  Let us know if you have questions!

One Simple Trick Will Get Your Money, and You Won’t Believe What Happened Next

In keeping with the topic from two weeks ago (“Hip Hip Hooray for New F&A“), we’d like to highlight the importance of correctly calculating your indirect costs using the new rates.  Remember:

 

  • Each year of your project is going to have differently applicable F&A rates
  • Each year of your project may have more than one applicable F&A rate, and should be proportionately weighted

 

If, for example, you have a project that begins on September 1, 2014, a 52% F&A rate will apply to the first month of your project, but the new 52.5% will apply to the remaining 11 months in that first project year.  On the second year of the project, 52.5% will apply to the first month, but the new 53% will apply to the remaining 11 months of that project period (and so on, and so forth).

 

The importance of calculating out each year correctly comes down to safeguarding against leaving money on the table.  Using a single F&A rate for all project years means leaving tens of thousands of dollars on the table when submitting your proposal budget.  On a five-year/modular project, for example, calculating the correct and proportional indirect costs based on the rate agreement will generate over $18,000 more in qualified project dollars than using a flat, single rate.

 

For help determining your multi-rate F&A calculation, check out the spreadsheet we developed; it will calculate your proportional F&A costs and highlight what needs to go into your SF424 (see the example tab for a visual explanation). Feel free to contact us with any questions!

 

Hip Hip Hooray for New F&A

Wayne State University recently received its final Facilities and Administrative (F&A) costs rate agreement.  It’s very important that, when you are calculating your modified total direct costs, they reflect the following numbers for all forthcoming RESEARCH projects ON CAMPUS:

 

Project Period

F&A Rate

Now until 09/30/2014

52.00%

10/01/2014-09/30/2015**

52.50%

10/01/2015-09/30/2016

53.00%

10/01/2016-09/30/2018 (and later, until a new agreement is in place)

54.00%

 ** As most projects have an earliest start date of 04/2015 at this point, this will be the first-year rate for most projects at this point.  Please contact RAS if you are unsure.

 

Beginning 10/01/2014, the University fringe rate for faculty and administration will change as well, to 26.6%.

 

The new rate agreement (dated May 14, 2014)  in its entirety has been posted by SPA, and can be viewed here.  In addition to the commonly used rates posted here, you can also find the new rates for off-campus research, instruction, and other activities.  Fringe benefit rates are also provided for employee classes other than faculty and administration.  If you have any questions about calculating F&A costs for your upcoming submissions, drop us a note!