Facilities and Administrative Rates for Federal Sponsored Programs
Following is an important update about the university's Facilities and Administrative (F&A) Rate Agreement for federal sponsored programs.
As you may know, the university receives an F&A Rate to fund, in part, certain indirect costs related to sponsored program activities supported by the federal government. The Department of Health and Human Services is the cognizant agency that negotiates predetermined rates with the university on behalf of the federal government for all of its agencies. For the fiscal year ended June 30, 2024, the university received $394 million in indirect cost recovery.
We recently completed negotiation of a new rate agreement that continues our current rate for on-campus organized research of 56.0 percent through June 30, 2029 and provides for an increase in the rate for on-campus other sponsored activity from 29.0 percent to 31.0 percent for the period July 1, 2025 through June 30, 2029. A summary of approved federal F&A (indirect cost) rates under our current and new agreements appears below.
Our new F&A Rate Agreement, dated May 22, 2025, is available as a pdf file on the Finance website. Under the new agreement, predetermined rates for fiscal 2025 are identical to the provisional rates provided for in the prior agreement.
New proposals for federally supported projects should include the indirect cost rates listed above and be applied to each year for which funding is anticipated. The full recovery of indirect costs is expected on all grants or contracts, up to the level allowed by the sponsor's written policy.
As part of this agreement, we also negotiated the ability to implement the new Uniform Guidance thresholds for equipment and subawards of $10,000 and $50,000, respectively, effective July 1, 2026.
Regarding non-federal sponsored programs, the university’s Office of Research and Sponsored Programs (ORSP) establishes guidelines for expected indirect cost rates, which can be viewed at: orsp.umich.edu/indirect-costs-rates. The ORSP website also includes, among other things, information on the proposal preparation and submission process.
If you have any questions or would like more information about the new rates, please contact Debbie Talley, assistant vice president for finance - sponsored programs, at [email protected], or Chad Greenwell, associate controller - financial reporting and cost reimbursement, at [email protected]. For questions about potential rate caps for specific federal agencies or grants, please contact Andrea Anderson, executive director, sponsored projects, at [email protected].
Sincerely,
Cheryl Soper
Assistant Vice President for Financial Operations and Controller