Stanford Rates - Rate Calculation

Rate Calculation

Stanford University's Facilities and Administrative [F&A] costs, which are synonymous with "indirect" costs, are developed under the requirements of the U.S. Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions, (A-21).

Stanford negotiates F&A rates or amounts with the Federal Government under A-21 for the following cost incurring activities:

Organized Research (On-campus and Off-campus)
Sponsored Instruction (On-campus and Off-campus)
Stanford Linear Accelerator Center
Other Sponsored Activities
Animal Care

The F&A rates allocable to each of the above activities are calculated by the development of "pools" of F&A costs (the numerator) and of allocation bases for each activity (the denominator). The pooled dollars are divided by their respective bases, resulting in the dollars allocable to that activity. The dollars are then divided by a "distribution base" from which a rate results. That rate represents the percentage which must be added to direct cost dollars to represent the "burdened" cost of the project or activity.

The F&A cost pools are mandated by A-21. They are comprised of the
following categories of costs:

DEPRECIATION, including buildings, land improvements and equipment.

OPERATION & MAINTENANCE, which includes costs incurred for the administration, supervision, operation, maintenance, preservation and protection of the institution's physical plant. It includes utilities, repair and maintenance, insurance, public safety, environmental health and safety, etc.

GENERAL & ADMINISTRATIVE, which includes costs incurred for the general executive and administrative offices of the University, and other expenses of a general nature. They include Faculty & Staff Services, Controller's Office, President & Provosts' offices, etc.

SPONSORED PROJECTS ADMINISTRATION, which includes those costs incurred by separate organizations primarily to administer sponsored projects. It includes costs incurred by the Office of Research Administration.

DEPARTMENTAL ADMINISTRATION, which includes those costs incurred for administrative and supporting services that benefit common or
joint departmental activities or objectives in dean's offices, academic departments and divisions, organized research institutes, study centers and research centers.

STUDENT ADMINISTRATION AND SERVICES, which includes those costs incurred for the administration of student affairs and for services to students, including expenses of such activities as the Dean of Students, admissions, registrar, counseling and placement services, student advisors, student health services, etc.

LIBRARY, which includes those costs incurred for the operation of the library system, including the cost of books and materials.

The distribution base for the various cost incurring activities consists of the "modified total direct costs" of that activity, as defined by A-21. Modified total direct cost, or MTDC, is comprised of salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract. Equipment, capital expenditures, charges for patient care, tuition remission, rental costs, scholarships and fellowships and the portion of subgrants and subcontract in excess of $25,000 are excluded from MTDC.