Transfer of F and A Costs Recovery Indirect Funds

The gross F&A indirect cost recovery accumulated within the University of Louisville Research Foundation, Incorporated (ULRF) in a given fiscal year shall be distributed under the following plan:

1. Gross F&A shall be budgeted in accordance with projected annual award activity and the prevailing F&A rates utilized by the University.
2. The following items are deducted from the gross:
   1. The Office of the President has authority to identify certain fixed costs related to research for distribution from the F&A pool prior to allocating and transferring the remaining balance to the University of Louisville (University) and the ULRF. This may include costs such as those designated to pay for the University Scholars Program, debt service on new research facilities, capital equipment, and faculty incentive funds.
   2. Twenty percent (20%) of the gross F&A cost recovery funds received in a given fiscal year shall be retained by the ULRF for the purpose of providing Research Infrastructure Funds (RIF) as specified in the Research Foundation Handbook. Currently these funds are allocated as:

1. The Office of the President has authority to identify certain fixed costs related to research for distribution from the F&A pool prior to allocating and transferring the remaining balance to the University of Louisville (University) and the ULRF. This may include costs such as those designated to pay for the University Scholars Program, debt service on new research facilities, capital equipment, and faculty incentive funds.
2. Twenty percent (20%) of the gross F&A cost recovery funds received in a given fiscal year shall be retained by the ULRF for the purpose of providing Research Infrastructure Funds (RIF) as specified in the Research Foundation Handbook. Currently these funds are allocated as:

i. Principal Investigator RIF - The fund is equivalent to ten percent (10%) of facilities and administrative costs awarded on extramural grants & contracts. Individual allocations to grant recipients, or principal investigators, are made by transferring funds to the RIF speedtype at the close of the month in which the grant expenditures are made.

ii. Department RIF - The fund is equivalent to ten percent (10%) of facilities and administrative costs awarded on extramural grants & contracts. Departmental allocations are made by transferring funds to the departmental RIF speedtype at the close of the month in which the grant expenditures are made.

3. Twenty percent (20%) of the net remaining F&A cost recovery funds received in a given fiscal year shall be retained by the ULRF. These funds shall be allocated to the President, Provost, Executive Vice President for Health Affairs and Executive Vice President for Research and Innovation (EVPRI) to bolster sponsored research activities at the University including, but not limited to, equipment matching requirements, research faculty recruiting packages, and other programs in support of the research enterprise.
4. The remaining eighty percent (80%) of the F&A cost recovery funds received in a given fiscal year shall be transferred to the University's General Fund (sometimes referred to as the current unrestricted fund). These funds partially remunerate the general fund for costs incurred throughout the University and for specific research administrative expenses.

Many private and locally funded grants and contracts, and all of the federally funded grants and contracts, have a provision for Facilities and Administration (F&A) cost recovery built into them. This recovery provision is provided to fund the cost of administering and providing infrastructure support to the grant or contract effort. The F&A recovery rate charged is a percentage of direct cost and is negotiated with the federal government based on real costs, incurred by the University, in support of extramurally funded activities.

The F&A recovery rate is used as a "benchmark" for other grants and contracts that are private, local and state supported. The University on-campus F&A cost recovery rate is listed in the ULRF Research Handbook (http://research.louisville.edu/res-handbook/res-hdbk.html). The employment of this overhead rate to applicable grants and contracts generates revenue for the University.

1. The Office of Budget and Financial Planning shall project each year, as part of the annual operating budget development process, an amount to be budgeted for F&A cost recovery funds. This activity will be accomplished in concert with other central administrative offices, e.g. Controller's Office, Office of the EVPRI, etc. The projected amount of F&A shall be budgeted as a line item revenue source within the University's General Fund for the respective fiscal year's budget.
2. The Grants Division will be responsible for the setup and on-going maintenance of F&A calculations in the Grants Management module of the University's financial system. OGM will also be responsible for the setup of Research Infrastructure Funds (RIF) and University Scholars calculation in the Grants Management module of the University's financial system.
3. The Controller's Office shall be responsible for monitoring, on a monthly basis, the funds received from F&A cost recovery sources and transferring the University's percentage to the general fund. The Office of the EVPRI distributes its portion of the funds. In addition, the Department of Sponsored Programs shall prepare a final reconciliation of F&A charges on an individual grant as part of "closing out" the grant and will make any necessary adjustments deemed appropriate.
4. Principal Investigators, Unit Business Managers, or other individuals charged with the responsibility for reconciling individual grants will reconcile F&A charges for each grant on a monthly basis to ensure the F&A is being calculated and charged correctly. Problems will be sent via email to the Grants and Contracts Accounting section in the Controller's Office. Problems should be reported the same month, or accounting period, that they are identified.
5. Unit Business Managers and other individuals charged with the responsibility for reconciling departmental and individual Research Infrastructure Funds (RIFs) will reconcile these programs monthly to ensure that overhead recovery funds transferred to these programs are being calculated correctly.