Washington State University
EXECUTIVE POLICY MANUAL

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Policy for Allocating Facilities and Administrative
Cost Recovery Revenue

This policy provides guidelines for distributing allocations to various types of units.

Most grants and contracts pay the University facilities and administrative cost recovery (F&A) fees. These payments are meant to reimburse the University for costs associated with use of the physical facilities and other University support that are not billed directly to the grant or contract.

F&A funds are an important revenue source for the University. It is necessary and usual to combine them with other revenues, such as state appropriations, for general University support.

At WSU, F&A revenue contributes to the permanent budget level (PBL) for the following: graduate assistantships, grants-in-aid, libraries, utilities, facilities maintenance, environmental health services, sponsored project finance, payroll, accounting, purchasing, radiation safety, grant and research development, and equipment matching.

WSU returns some F&A revenue to the units that generate it. This is to reimburse these units for their own facilities and administrative costs and to stimulate further research.

Prior to FY 2000, allocations to academic units were based on estimated future F&A revenue for the fiscal year. The allocations to units were proportional to the actual revenue they collected during the previous year ending in April. The calculation and distribution method was hard to understand, so beginning in FY 2000 the following simpler method was adopted.

Allocations of both domestic and international F&A revenue to the units are distributed according to the following policy: F&A allocations to units are made quarterly based on actual F&A amounts collected the previous quarter. Each area is allocated 23% of gross F&A revenue collected, with 65% of the allocation (15% of F&A revenue collected) going to the department, and 35% of the allocation (8% of F&A revenue collected) going to the dean. The department is responsible to make some of the F&A revenue allocation available to the principal investigator to assist with grant administration, travel, student assistants, or other expenses. Also, departments and deans are responsible to provide administrative support to centers, since they do not receive F&A allocations directly.

For projects at branch campuses the allocation for academic support is different depending upon whether or not there is participation by an academic department. For projects with academic unit affiliation, the allocation of 23% of F&A collections is split equally between the branch and academic dean. For projects without academic department involvement, the entire allocation of 23% of F&A collections goes to the branch dean. In addition to the allocation for academic support, branch campuses
receive 38% of gross F&A collections as an allocation for physical plant and campus support.

Libraries receive an allocation of 7% of forecasted gross F&A revenue collections, with an allocation at the start of the year based upon budgeted F&A revenue and a supplemental allocation near the end of the fiscal year based upon the forecast of actual year-end revenue.

See the diagram of the allocation of F&A revenue collections in the PDF version of EP2.