Facilities & Administrative Costs and Revenue Distribution

Responsible Unit: Finance | Executive lead: VP for Finance
Created: 7/14/2025 | Effective: 10/15/25
Compliance: 2 CFR 200.414
Approving Body: ELT | Classification: Institution-wide

Background: 
Facilities & Administrative (F&A) costs are defined in the federal “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” ( “Uniform Guidance”) issued by the U.S. Office of Management and Budget (“OMB”). 2 CFR 200 et. seq. F&A costs are essential costs of conducting research and include such expenses as utilities, building maintenance, telephones, computers, library services, and other administrative costs.

Pacific Northwest University (PNWU) incurs F&A costs as part of the general operations that support research activities. F&A costs are typically not readily identifiable to any single project, rather F&A costs support overall research activities. In order to recoup such F&A costs, institutions such as PNWU apply an F&A cost rate which is typically negotiated with their applicable cognizant federal agency or other external funding source, or when a specific F&A cost rate has not been negotiated, the federally authorized “de minimus” F&A cost rate (which is 15% effective October 1, 2024), pursuant to per 2 CFR 200.414(f). F&A costs that are recovered by PNWU from sponsors are referred to as F&A revenues,

Not all sponsors reimburse PNWU for F&A costs at the federally negotiated rate. Statutory limitations prevent some federal sponsors from reimbursing F&A costs at the federally negotiated standard rate. In addition, many state and non-federal sponsors reimburse PNWU at rates less than the federally negotiated standard rate (e.g., the federal “de minimus” rate). Rates less than the federally negotiated rate must be verified and approved by the Office of Research and Sponsored Programs during proposal development.

F&A costs are recovered from federal and non-federal sponsors when direct costs of the awards are expended, i.e., they are charged to individual awards by the PNWU Finance Department as direct costs are spent and federal and non-federal funds are drawn down. The PNWU Finance Department and the Office of Research and Sponsored Programs can provide additional information for specific grants and how F&A costs are applied to the applicable budget codes.

F&A Revenue Distribution:

While the F&A revenue that PNWU receives are based on PNWU’s F&A costs, PNWU has discretion to reinvest these funds towards the research and scholarship enterprise. PNWU’s standard distribution of F&A revenue recognizes the shared responsibility between central administration, schools and colleges, academic units and departments, and faculty in supporting research and other scholarly activities at PNWU as follows:

General University Funds25%
Office of Research and Sponsored Programs50%*
Principal Investigator/PNWU Investigators25%**
Total100%
*Fifty percent (50%) will go to the Office of Research and Sponsored Programs budget for investment in research infrastructure.
**twenty five percent (25%) of F&A revenue funds will go to an F&A revenue account(s) for the investigator(s); all PNWU investigators on an award with associated F&A revenue will split the 25% share based on the proportion of their effort on the project. An investigator will have an account set up for the distribution of F & A revenues only if the total annual F and A they are scheduled to receive is greater than $1000.



In unique circumstances, the President may waive the payment of F & A revenue to General University Funds or otherwise determine it is in the best interest of the University to continue the development of the research mission by reallocating the above percentages.

F&A Revenue Use:

F&A revenue may be used for expenses related to research, scholarship, programmatic activities, employee professional development, equipment, or for the development of future sponsored projects. These funds cannot be used to augment the Principal Investigator’s salary.

The list below, while not exhaustive, provides examples and guidance regarding the appropriate use of F&A revenues:

  • Supplies or equipment expenses, particularly those that also support the research/scholarship enterprise, beyond those purchases already supported at the university or School/College level.
  • Unforeseen research and scholarly expenses (e.g., catastrophic equipment failure, etc.), especially those for which there are no specific budgets identified.
  • Contractor or consultant costs associated with the development of new grant proposals.
  • Adding student research assistants onto projects when the initially proposed budgeted amount was insufficient to support qualified students.
  • Conference travel for the Principal Investigator, other project investigators and students, or for other faculty members in the department needing research support, beyond that routinely supported by the School/College or Department.
  • Expenses incurred as part of grant-funded projects that are not included in the grant budget and/or are not eligible for reimbursement from the funder.
  • Professional development activities related to scholarly activity, including but not limited to professional association membership fees, conference registration fees, book purchases, subscriptions to professional journals, licensures or certifications, and presentation or publication-related fees.

The list above is not intended to be an all-inclusive list of potential uses of F&A funds. These funds will not be used for general operating expenses. It is expected that F&A revenue may be used to supplement research and scholarly activity expenses but not supplant additional sources of research funding.

PNWU’s Finance Department will distribute F&A revenue funds pursuant to the above formula (see B. F&A Revenue Distribution) quarterly, semi-annually, or annually depending upon disbursement of grant funds.

School/College Deans, Administrative and Academic Departments, and Principal Investigators with recovered F&A revenue must submit plans to spend recovered funds annually. Plans must be submitted to the Finance Department and the Office of Research and Sponsored Programs by May 15th of each year and be based on a fiscal year (July 1st through June 30th). At a minimum, spending plans must include:

  • A brief description of the source of recovered funds (i.e., original grant project, sponsor award
  • identification number, etc.);
  • The estimated balance as of July 1st obtained from the Finance Department;
  • Plans to spend the funds in the upcoming fiscal year.

School/Colleges Deans, Administrative and Academic Offices and Principal Investigators are allowed to roll over their accounts from fiscal year to fiscal year as long as the Office of Research and Sponsored Programs and Finance Office receive written approval from the investigator’s supervisor. Should an employee separate from PNWU, unused funds will be expended as predetermined or returned to PNWU’s general fund.

Related Policies and references:

FAQ’s about Facilities and Administrative Costs of Federally Sponsored University Research

Policy Resources

For assistance with policies and procedures contact:

Deidre Dennis
ddennis@pnwu.edu