Research Policy Analysis and Coordination
State of California
In coordination with the California State University, UC has established a base rate of 25% increasing over the first 4-1/2 years to 40% of the Modified Total Direct Costs (as defined in UC's federally-negotiated rate agreements) for the recovery of facilities and administrative costs for State of California funding.
- In its first year, the base rate has a core component of 25% of the MTDC for administrative costs and no facilities cost.
- Facilities costs will be added in increments of 5% until the F&A rate reaches 40% MTDC.
- Projects that are performed off-campus will only use the 25% MTDC rate for administrative costs.
- The administrative component of the rate will not escalate.
RPAC Memo 16-01 established the following rate schedule for State of California funding:
|25% through June 30, 2018||25%|
|30% through June 30, 2019|
|35% through June 30, 2020|
|40% starting July 1, 2021|
The base for all of these rates is the Modified Total Direct Costs (MTDC), as defined in UC's federally-negotiated rate agreements.
Federal Pass-Through Funding from State of California Agencies
An appropriate F&A rate agreement, rather than the UC Rate, should be applied when a State of California agency is acting as a pass-through entity of a subaward to UC. A pass-through entity, a non-Federal entity that provides a subaward to a subrecipient to carry out part of federal project, is not authorized to make unilateral restrictions of indirect cost recovery. 2 CFR 200.331 states:
"All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: […] (4) An approved federally recognized indirect cost rate negotiated between the subrecipient and the Federal Government."
If a "subrecipient already has a negotiated F&A rate with the Federal government, the negotiated rate must be used" in a subaward, according to the Council on Financial Reform (COFAR) September 2015 Frequently Asked Questions.