Requests to Waive F&A
The University seeks to recover all Facilities & Administrative (F&A) allowed by the sponsor per Montana University System Board of Regent Policy 404 – Indirect Cost Recovery Rate.
By default, the University of Montana's applies its federally-negotiated F&A rate (also known as indirect cost recovery) to all externally-sponsored projects. The fiscal management of sponsored projects, including the application of appropriate F&A rate in proposed project budgets and management of awarded projects within budget and funding limitations, is the responsibility of the Principal Investigator (PI).
If an activity does not meet the pre-approved exceptions below, the Vice President for Research may - in some circumstances - consider full or partial waivers of the Facilities & Administrative recovery normally incurred by sponsored projects. However, such waivers are seldom approved if the sponsor is a:
- U.S. government agency that allows F&A;
- Montana state agency;
- for-profit organization, either U.S. or international;
- U.S.-based non-profit foundation that does not explicitly limit F&A as a matter of policy; or,
- an office or agency of a foreign government, including organizations funded by that government.
Some programs or sponsors are pre-approved for a waiver of a portion or all of the normal F&A cost recovery. In most cases, these programs or sponsors require such a waiver as a condition of the award.
By default, UM’s federally negotiated rates are applied to all proposals. The following exceptions are automatically allowed:
1) If a sponsor has a published, publicly accessible policy limiting the use of funds for indirect costs for all recipients on all projects, we may include the limit indirect cost recovery in our proposal budget (a letter/MOU issued to UM in response to a proposal is not sufficient).
2) If a sponsor publishes an indirect cost limit in a particular solicitation which will apply to all recipients, we may include limit indirect cost recovery in our proposal budget.
3) If there is a master agreement between UM and the sponsor which defines the terms for all projects therein which limits F&A recovery and applies to the proposal, we may limit indirect cost recovery in our proposal budget.
Documentation of the entity's policy statement or program solicitation must be submitted as an attachment in the internal proposal record as part of the completed proposal package.
Note: If UM agrees to accept reduced F&A recovery based on an understanding of the sponsor's policy, and later becomes aware of a higher indirect cost rate paid by that sponsor to another recipient, UM reserves the right to apply the higher rate to that sponsor's projects.
Keep the following in mind when preparing a proposal to a non-profit foundation:
- For some foundations, UM requires clearance through the UM Foundation prior to submission of any proposal. Contact a member of your departmentally-assigned ORSP team for assistance.
- In the case of foundations based outside of the United States, or those established as an arm of a for-profit organization, F&A waivers will not be pre-approved; such requests will be considered only on a case-by-case basis (see below). In these cases, care must be taken to determine the non-profit status of the sponsor, and the PI should confer with ORSP in advance to determine the applicability of F&A.
- F&A costs will not normally be waived solely because a foundation has expressed a desire to limit the use of its funds for a particular award to UM. Unless the program solicitation includes such a limitation for all recipients, or the foundation has an official written and publicly disclosed policy, a waiver will not be pre-approved. In such cases, a case-by-case waiver may be requested.
The Vice President for Research and Creative Scholarship (VPRCS) may consider waiver requests. Submit such requests via the F&A Waiver Request section in your Cayuse proposal record using the recommended routing procedure in the Cayuse Business Processes.
Initiated by the PI, such requests must be approved by the PI's dean prior to routing to the VPRCS. Approval of such requests is at the sole discretion of the VPR who may take into consideration:
- the equity of granting the waiver when the projects of other faculty carry full overhead;
- the total cost to UM;
- the likelihood that an award would be seriously jeopardized without a waiver, and the potential effect of the loss on the faculty member's overall research program;
- the benefit of the waiver to new or junior faculty members or in support of research efforts in new directions which otherwise might not be sufficiently developed to attract typical peer-reviewed awards;
- the effect of a waiver to increase direct costs available for student support.
Waivers should include thorough justification and should be routed to the VPRCS early in the proposal development process.