Direct vs F&A Costs
Federal regulations provide principles for determining what costs are applicable to agreements (grants or contracts) with the government and identify which of those costs may be charged as direct and which must be charged as F&A costs. Furthermore, the rules state that the distinction between direct and F&A costs must be maintained consistently throughout the University regardless of the source of funding.
Direct costs are those which can be identified specifically with a particular sponsored project and which can be directly assigned to such activities, relatively easily, and with a high degree of accuracy. For example, the supplies needed for a research project are easy to identify; however, costs such as heating and air conditioning the rooms and labs used by the project staff are not.
Indirect Costs (F&A)
Indirect costsare also called Facilities & Administrative costs or F&A. These are defined as those costs that are incurred for common or joint objectives, and which cannot be allocated readily and specifically to a particular sponsored project.