Facilities and Administrative Cost Rate for Industry Funded Clinical Trial Agreements
The Facilities and Administrative Cost rate utilized for industry funded clinical trial agreements is the off-campus research rate negotiated with the Department of Health and Human Services (DHHS). The federal government caps that rate for universities at 26%. An agreement has been issued to the University of Kentucky by DHHS with new rates that will be effective July 1, 2013. According to information submitted by the Office of Controller and Treasurer to DHHS to develop the new rates, the actual off-campus rate is 27.44%. The actual rate, rounded to 27.4%, will be utilized for future industry funded clinical trials.
Industry funded CTA budgets are normally developed as a total per subject amount which includes both direct and F&A costs. Negotiations with the sponsoring company often focus on the total dollars per subject. Once that amount is agreed upon, the breakdown of direct and F&A is recalculated by the individual responsible for the university budget. In addition, F&A is charged to industry funded CTAs in a unique way; it is assessed against cash as it is received.
Calculations for the new rate of 27.4% using the example of $1000 total per subject cost:
$785 Direct costs
$215 F&A (27.4% of $785 or 21.5% of $1000)
$1000 Total per subject amount
The new rate will be used for industry funded CTAs received after July 1, 2013. Negotiations that are already in progress using the old rate will be accommodated. If a budget has already been submitted to a company utilizing the previous rates or if you have questions about this change, please contact Deborah Davis, director of the Office of Sponsored Projects Administration ddavis@uky.edu, 257-8311.