askus icon

Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

February 25, 2013
September 1, 2014
Federal Reporting


Part 10. Costing - Table of Contents


A. Introduction

The Office of Accounting & Financial Management’s Federal Reporting section at The University of Texas at Austin works to ensure that the rules and regulations governing costing of direct and indirect expenses are followed by the university.

The university’s costing is governed primarily by two federal publications: the Office of Management and Budget’s Circular A-21 and the Federal Acquisition Regulation (FAR), Part 30—Cost Accounting Standards Administration. The university also follows all applicable state and university rules and regulations.

B. Overview of Costing and Analysis Functions

The Federal Reporting section performs the following primary tasks:

  • Prepares and implements costing policies and procedures
  • Calculates and negotiates the federal reimbursement rate for facilities and administrative expenses incurred in support of sponsored research, instruction, and other sponsored activities
  • Reviews and approves service center rates for departments that provide goods and services
  • Assists departments with establishing new service centers
  • Establishes service center rate guidelines
  • Provides training on all costing-related topics, e.g., WORQSpace, service centers, and general costing concepts
  • Establishes and reviews special use facility rates
  • Provides audit support on all costing-related topics
  • Prepares reports and studies required by the federal government and other entities

C. Rate Calculations

C&A performs the following types of rate calculations so the university can charge reviewed and approved rates to customers in order to recover costs incurred for goods or services.

Type Definition

Facilities and Administrative (F&A) Rates

Federal Reporting calculates F&A (indirect) rates, which are charged to sponsored awards by the university. F&A rates include:

  • Depreciation and interest costs associated with the university’s capitalized building, infrastructure, improvements, and equipment
  • Operating and maintenance costs, such as utility, security, and custodial
  • Common administrative functions, such as payroll and purchasing

Service Centers

Federal Reporting establishes, reviews, and approves service center rates. Service center rates allow the department to recover costs incurred for goods or services required to support sponsored research programs or academic needs. A service center can provide services to internal and external users. New service centers must be approved by the director of accounting and financial management and associate vice-president. New service centers may also require further review and approval by the University Budget Council, if the rate will have a campus-wide impact.

Institutional Administrative Fees

Federal Reporting and the Budget Office calculate estimates of the institutional administrative fees, and the University Budget Council establishes the policy for these fees (e.g., which accounts they apply to). The Budget Office uses these policy guidelines to issue waivers, if applicable.

Institutional Surcharge

Federal Reporting calculates the surcharge, and each service center with external customers charges the surcharge to recover institutional F&A expenses. Surcharge income is deposited into a central administrative account.

Special Use Facilities (SUF)

Federal Reporting establishes, reviews, and approves SUF rates. This does not apply to service centers or specialized service facilities. SUF rates estimate marginal (incremental) costs.

D. Resources



Part 10. Costing - Table of Contents