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New F&A rate agreement

The University of Tennessee, Knoxville’s new federally negotiated indirect cost rate agreement has been signed and should now be used when preparing budgets for proposals.   The new agreement is attached and will be available online shortly.  The significant changes in the new agreement are:

The on-campus “Research” functional area code F&A rate will change to 52% for the period of 7/1/20 through 6/30/21.  Beginning 7/1/21 the rate will then change to 53%.  The applicable rate in effect at the proposed start date of a project will be used for the entire first budget period of the resulting award.  If any subsequent budget period of the project falls in a time period in which a different F&A rate is applicable, the new rate would be used.  For example:

  • If Year 1 of a project is proposed to start 9/1/20, the first 12 months budget would use the 52% F&A rate.  Year 2 of that project would begin 9/1/21, therefore 53% F&A would be used for that year and any additional budget periods.

The rate for the “Instruction” and “Other Sponsored Activities functional area codes have also changed.

  • Effective immediately, proposals using the on-campus “Instruction” rate will use 54% F&A (previously 53%).
  • Effective immediately, proposals using the on-campus “Other Sponsored Activities” rate will use 36% F&A (previously 38%).

New F&A rate agreements often generate many questions.  Two of the most common are:

  1. Does the new rate agreement effect my current awards?
    1. No.  Projects proposed and awarded under one F&A rate agreement will not be changed to the rates of the new agreement.
  2. If I submit a continuation or renewal proposal, do I use the new F&A rates?
    1. Yes.  Any time a proposal for new funding is submitted, the University is entitled to request those funds under its most current F&A rate agreement.

If you should have any questions about these changes, please contact David Smelser (865-974-1840, dsmelser@utk.edu).