What the Office of Cost Analysis and F&A Cost Rates Mean on the UConn Accounting Office Site

Updated

The UConn Accounting Office site lists the Office of Cost Analysis as one of the units under its oversight, and it posts a document titled "Facilities and Administrative Cost Rates (FY 25 Fringe Rates).pdf" under Announcements. In plain terms, the Office of Cost Analysis is the unit that develops and maintains the university's cost rates, and the F&A rate is the percentage the university applies to sponsored projects to recover indirect costs such as facilities and administration. The fringe rate is a related but separate figure used to budget and charge employee benefit costs to those projects.

What the Office of Cost Analysis does

According to the Accounting Office home page, the office has oversight over four areas:

  • Accounting / Financial Reporting
  • Plant Accounting
  • Office of Cost Analysis
  • (plus the remaining listed area on the page)

Within that structure, the Office of Cost Analysis is the group responsible for the university's cost accounting work. In practice, that means it calculates the rates the university uses when it charges costs to sponsored agreements and other internal accounts. This is the unit that would prepare and negotiate the university's F&A rate proposal with its federal cognizant agency, and it maintains the supporting documentation behind those rates.

What F&A cost rates are used for

Facilities and Administrative (F&A) costs — sometimes called indirect costs or overhead — are the expenses of running the university that cannot be tied to one specific project. Examples include building depreciation, utilities, library services, and administrative salaries.

The F&A rate is the percentage applied to a project's direct cost base to recover those shared expenses. When a researcher receives a grant, the sponsor typically pays the direct costs of the project plus an additional amount calculated using the negotiated F&A rate. That recovery is what keeps the lights on in the labs and pays the staff who process the award.

Key points about F&A rates:

  • They are negotiated with a federal agency, not set arbitrarily by the university.
  • They apply to a defined base, such as modified total direct costs, not to every dollar spent.
  • They are typically valid for a multi-year period and then renegotiated.

Where the fringe rate fits in

The document on the site is labeled "Facilities and Administrative Cost Rates (FY 25 Fringe Rates).pdf." Fringe benefits are a separate cost category from F&A. The fringe rate is the percentage added to salaries to cover benefits such as health insurance, retirement contributions, and payroll taxes.

For sponsored projects, the fringe rate matters because:

  • It determines how much benefit cost is charged to a grant for each employee paid from that grant.
  • It must be applied consistently across sponsored accounts.
  • It is usually updated annually, which is why the document is tied to a specific fiscal year (FY 25).

The fact that the site groups the F&A rates and fringe rates in one announcement suggests the Office of Cost Analysis publishes both figures together for the campus community to use in budgeting and proposal preparation.

Why these rates matter to university financial reporting

These rates connect cost accounting to financial reporting in a few concrete ways:

  • Proposal budgets. Departments need the current F&A and fringe rates to build accurate budgets. Using an outdated rate produces a budget the sponsor may reject or that under-recovers costs.
  • Cost recovery. The F&A rate determines how much indirect cost revenue the university receives, which flows into the financial statements.
  • Compliance. Sponsored awards must charge costs at the negotiated rates. Applying the wrong rate creates audit exposure.
  • Year-end processes. The site's Announcements section also lists fiscal year end deadlines (06/30/2026) and an "Accountability Form (C1)," which indicates the Accounting Office coordinates rate information with year-end financial reporting.

How to use this information

If you are preparing a grant budget, look for the current F&A rate and fringe rate documents in the Announcements section of the Accounting Office site before you finalize your numbers. If you are trying to understand a charge on a sponsored account, the Office of Cost Analysis is the unit that maintains the rate behind it. If you need the underlying methodology or a rate for a prior fiscal year, that office is the correct point of contact rather than the general accounting help desk.