Under-recovery of F&A Costs

In addition to the direct costs of research, each project also incurs facilities & administrative (F&A) costs, such as utilities, space, and central administration labor. (Read more about how these costs are calculated.)  Under-recovery of F&A costs occurs when a sponsor does not fully reimburse MIT at its negotiated F&A rate. In these cases, other funding sources must be used to cover F&A costs. MIT does not waive or reduce the F&A costs of any sponsored research project.

Under-recovery may result when:

  • The sponsor will not pay the Institute's full F&A rate.
  • The sponsor uses a different indirect cost base, such as Total Direct Cost (TDC).
  • The sponsor uses a different rate than the current Institute rates, such as a fixed-for-the-life award.

Funding Under-recovery

As part of a new approach piloted in FY2024, grants with under-recovery are reviewed by the DLCIs and funded using a combination of the central allocation and local resources.

Before submitting a proposal, PIs should work with their DLCI admin to request under-recovery funding. The department head will review the request, and, once approved, the DLCI will monitor under-recovery spending during the project period.

Funding or approval may differ depending on the sponsor, and DLCI administrators should review sponsor-specific guidance