Determining which F&A rate to apply - Categorization of Sponsored Projects Procedure

Effective Date: August 2, 2021

1. PURPOSE OF PROCEDURE

The purpose of this procedure is to determine the appropriate categorization of a sponsored project into one of three major functions: organized research, instruction or other sponsored activity. 

2. BACKGROUND

OMB's Uniform Guidance– 2 CFR Part 200 Appendix III Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions of Higher Education (IHEs) requires Western Michigan University to organize its sponsored expenditures into certain defined functional activities. At WMU, the majority of externally sponsored projects (i.e. grants, contracts, cooperative agreements) support Organized Research (OR) activities, but a smaller amount may be classified as Instruction or as Other Sponsored Activities (OSA). The categorization of the sponsored activity determines the appropriate facilities and administrative rate (F&A) to be applied. Within each category, projects are further defined as on-campus or off-campus, based on the primary location of a majority of the project’s activities as demonstrated by the scope of work and budget (see relevant procedure).

3. KEY DEFINITIONS

3.1.  Research is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied and to devise new applications of available knowledge. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities. Research includes the following subcategories:

• Basic Research is undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in mind. 
• Applied Research is conducted to gain new knowledge or understanding to meet a specific, recognized need or objective. 
• Development is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. 

3.2.  Instruction means the teaching and training activities of an institution financed by federal, state and private agencies and organizations. Except for research training as described above, this term includes any project where the purpose is to instruct any students at any location whether the instruction is offered for credits toward a degree or certificate or on a non-credit basis, and whether they are offered through regular academic departments or separate divisions, such as a summer school division or an extension division.

3.3 Other Sponsored Activities include programs involving work other than Instruction and Organized Research. 

4. PROCEDURE DETAILS

A sponsored project is subject to a singular rate. Multiple or split rates may not be applied to one project. If there is more than one type of activity for a project, for purposes of determining the category of sponsored project, the primary purpose is used. 

In order to determine the appropriate category of sponsored project, the research officer will review the scope of work in consultation with PI to determine the primary activity of the project based on the definitions above. When a determination cannot be easily made, the Vice President for Research or their designee shall be consulted and will render the final decision.

5. HELPFUL HINTS

5.1.  Research: Characteristics of Research (including Development) include systematic investigation; contributions to generalized knowledge; supporting, refining or refuting other research studies; production of research outcomes; intent to publish or disseminate results, etc. 

Examples of Sponsored Research include:

5.2.  Instruction: Recipients of Instruction may be WMU students or staff, teachers or students in elementary or secondary schools, or the general public. 

Research Program Officer in Office of Research and Innovation