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  • Facilities and Administrative Rate
    (Formerly known as the Indirect Cost Rate)

    1.  What is the Rate and how is it used?
    The Facilities and Administrative Rate is a rate used by institutions that receive federal grant and contract funding. The rate allows the awardee institution to recover general institutional costs that are incurred for common or joint objectives that cannot be readily and specifically identified to a particular sponsored project, instructional activity or any other institutional activity. These costs include the following:

    Operation and Maintenance of buildings and grounds
    Depreciation of buildings and equipment
    Central and Departmental Administrative Expenses
    Sponsored Project Administrative Expenses
    Student Administration & Services Expense (For Instruction and Branches only)
    Library costs

    The rate is applied to each grant or contract by calculating and F&A expense in relation to the modified direct costs charged to that grant or contract. The F&A expense is then billed to the awarding agency just like the direct costs. This is in accordance with OMB Circular A-21. NMSU then treats the income recognized from the F&A rate as unrestricted income and distributes it to various NMSU units based on agreed to distributions.

    2.  When is the Rate Calculated and How is it Approved?
    NMSU's Facilities and Administrative Rate (i.e. F&A Rate) is calculated and proposed annually to our Federal Cognizant Agency. Our Federal Cognizant Agency is the Office of Naval Research (ONR). ONR will then schedule an audit to be performed by the Federal Cognizant Audit Agency which is the Defense Contract Audit Agency (DCAA). Once the audit is performed, a report is filed by DCAA to ONR. The negotiation of the rate between NMSU and ONR will then begin and will be based on our proposal and the audit performed by DCAA. The ideal process normally occurs in the following time line:

    July - December Rate Report for Previous Fiscal Year is completed and submitted
    January Proposal for next year is completed and submitted
    February - March During this period an Audit by DCAA will occur
    April - May Negotiations between ONR and NMSU will occur and final rates will be agreed to that will become effective July 1 of that year.

    Note that any changes to accounting procedures either mandated by the state and/or federal government or voluntarily mandated by NMSU will delay the time line listed above based on when the change takes affect and how soon information can be gathered determining the effect on the rates.

    3.  How does the Rate Calculation Process Work?
    The rate calculation is based on actuals from a given fiscal year and adjusted based on known changes that will occur in the year the rate will be applied. For example the current rate calculation process is taking place as follows:

    Rate is calculated on FY2001 actuals
    Adjustments are made for anticipated changes that will occur in FY2003
    Rate when approved will be applied July 1, 2002 - June 30, 2003 (FY2003)

    4.  What Kind of Rates are Calculated for NMSU?
    Currently NMSU calculates and negotiates the following rates:

    Agricultural Research Rate - Used by AES only
    Organized Research Rate for On Campus Activities - Used by Main Campus except Ag
    Organized Research Rate for Off Campus Activities - Used by Main Campus except Ag
    Other Sponsored Activites (i.e. Public Service) - Used by Main Campus including CES
    Branch Campus Rates - Used by the four Branch Campus' only
    Physical Science Laboratory On Campus Rate
    Physical Science Laboratory Off Campus Rate
    Other Physical Science Rates (Leave and Fringe)
    NMSU Fringe Rate - Used by the Main Campus and Branches

  • Agency Index (FOPAL)


    The Accounting & Financial Reporting (AFR) and Sponsored Projects Accounting (SPA) departments have the responsibility for creating and maintaining agency Indexes (FOPALs). The AFR department is responsible for the agency Indexes (FOPALs) created for student organizations recognized by the Associated Students of New Mexico State University (ASNMSU). The SPA department is responsible for all other agency Indexes (FOPALs). The AFR department will interpret this policy when necessary.

    Agency Indexes (FOPALs) Defined

    Agency Indexes (FOPALs) are defined by the National Association of College and University Business Officers (NACUBO) Financial Accounting and Reporting Manual are monies held by an institution acting as custodian or fiscal agent. The monies are deposited with the institution for safekeeping, to be used or withdrawn by the depositor at will. These Indexes (FOPALs) may be held on behalf of students, faculty, staff, organizations, or some other third party (collectively referred to as "organizations").

    Use of Agency Indexes (FOPALs)

    In general, Agency Indexes (FOPALs) monies are the property of the organization and can be withdrawn or disbursed at its discretion. The University has no liability for the expenses and no claim on the surplus, or Index (FOPAL) balance, unless the remaining surplus has been abandoned. Surplus is considered abandoned if the fund balance of an Agency Index (FOPAL) has not changed in three fiscal years and the University has not been formally instructed as to the manner of disbursing the surplus. Monies that are deemed abandoned will be deposited to the University's general Scholarship Fund. When the purpose of an agency Index (FOPAL) is complete, the Index (FOPAL) must be closed. The responsible person for the Agency Index (FOPAL) can authorize the donation of any surplus monies to the University or the NMSU Foundation, Inc., if desired.

    The following are examples of appropriate uses for Agency Indexes (FOPALs): conferences, when a University faculty or staff member is acting as a facilitator for an established organization (.e., external to the University) and when the conference is funded wholly from registration fees (i.e., no University contribution); employee funds, when the funding comes from the employees and the employees decide on the manner in which funds are to be used; professional and student organizations, such as fraternities and sororities.

    Agency Indexes (FOPALs) cannot be used to record University fund raising activities. Fund raising activities by and for student organizations are permissible, but organizations must submit an activity approval form to the Activities Office of Corbett Center prior to initiating a club fund raiser. University receipts cannot be issued to donors, contributors or participants of such fund raising activities.

    There should be no written or implied agreement between donors, contributors or participants and New Mexico State University, therefore, the organization is solely responsible for monies and compliance with any funding source requirements.

    University monies cannot be deposited in agency Indexes (FOPALs) unless approved by the Controller's Office. University expenses cannot be paid from agency Indexes (FOPALs). Any purchase made from a non-ASNMSU club agency Indexes (FOPALs) which is later transferred by journal voucher to a University Index (FOPAL)will require Central Purchasing Office approval. Agency Indexes (FOPALs) established for ASNMSU clubs or organizations may share in the cost of ASNMSU expenditures. Expenditures are first incurred by ASNMSU Indexes (FOPALs)and then the portion to be paid by a club Index (FOPAL) is transferred by journal voucher. Branch Campus student clubs and organizations may do the same, provided a policy exists which indicates how the clubs will share expenditures.

    Assigning Agency Indexes (FOPALs)

    An organization must submit a written request for a new agency Index (FOPAL) to the AFR or SPA department. Upon receiving the request, the Questionnaire for Establishing Agency Indexes (FOPALs) is sent to the organization. The organization responds to the Questionnaire which should be returned the AFR for distribution. The AFR or SPA will decide if the Index (FOPAL) request meets the definition of an agency Index (FOPAL). If it is determined that an agency Index (FOPAL) is appropriate then a new Index (FOPAL) will be created. A responsible person should be assigned to the Index (FOPAL) who has the authority to act on behalf of the organization. The responsible person is the contact person with the University and has authority to approve the disbursement of monies for the organization.

    University Policies

    Direct Pay Requests. Direct pay requests are to be used for all external purchases made on agency Indexes (FOPALs), including travel. Reimbursement Vouchers cannot be issued on agency Indexes (FOPALs) since they are intended for the reimbursement of expenses paid by a University employee for a University purpose. Use of personal monies by a University employee for an agency Index (FOPAL) purpose can be reimbursed on a Direct Pay Request. Turn around time for direct pay requests will be in the same frame as for University direct pay requests.

    •The Financial Operations Department (FO) does not review or audit direct pay requests, but they ensure that the top and bottom portion of the Direct Pay Request balances and that a fiscal monitor's signature is present. The fiscal monitor is responsible to determine that a sufficient cash balance exists and that the Direct Pay Request has the authorized signatures. Since monies in agency Indexes (FOPALs) belong to a third party, most expenditures types will be allowed.

    NOTE: It should be made clear to vendors that they are transacting with the organization and not with the University. As such, vendor billings should be made to the name of the organization and not to New Mexico State University. Such billings should not be mailed directly to Financial Operations, but should be mailed directly to the responsible person for the agency Index (FOPAL).

    •Internal Purchases. Agency Indexes (FOPALs) can be charged by Interdepartmental Voucher (IDV) when goods and services are purchased from campus departments. Gross receipts tax is applicable to such purchases. If insufficient monies exist in an agency Index (FOPAL) when an IDV is presented for fiscal monitor's approval, the IDV will be returned to the department originating the IDV. It will be the department's responsibility to collect for amounts owed by an organization. Interdepartmental vouchers can be used by agency Indexes (FOPALs) when charging campus departments for sales of goods or services to campus departments.

    •Accounts Receivable. The University Accounts Receivable Office cannot send invoices to donors, contributors or participants on behalf of an organization holding an agency Index (FOPAL).

    •Petty Cash. University Petty Cash Funds cannot be established by agency Indexes (FOPALs). Cash can be withdrawn by completing a Cash Withdrawal Form and presenting the form to the Cashier's Office located in the Educational Services Building. As with direct pay requests, the responsible person and fiscal monitor signatures are required prior to the disbursement of monies.

    •Purchasing. Purchase Orders are not issued for agency Indexes (FOPALs). The issuance of a purchase order number implies a University commitment to purchase.

    •Travel Authorizations. Similar to purchase orders, travel authorizations are not issued on agency Indexes (FOPALs). Airline tickets cannot be charged to University agency Indexes (FOPALs) at travel agencies. Travel advances should be made directly from the agency Index (FOPAL) via direct pay request or cash withdrawal. If any portion of student club travel is to be paid from an agency Index (FOPAL), that portion is shown as "cost to external" on the travel authorization. A Direct Pay Request or cash withdrawal for the portion to be paid from an agency Index (FOPAL) can accompany the travel authorization.

    Payroll. Payroll expenditures cannot be charged to agency Indexes (FOPALs) through the University Payroll System, nor can payroll expenditures be transferred into agency Indexes (FOPALs) from a University Index (FOPAL). However, a University employee acting as a private contractor to an organization may be compensated, by Direct Pay Request, for services rendered to the organization.

    •Property. Equipment purchases in excess of $1,000 should be charged to an account code 780xxx, and will be tagged by the Property Office as non-University property if placed on University premises. If the responsible person of an agency Index (FOPAL) wishes to donate such equipment to the University, a letter must be sent to the Property Office with a copy to the University Advancement Office detailing the donation.

    •Tax-exempt Status. The University's tax exempt status does not apply to agency Index (FOPAL) purchases.

    •Tax Remittance. The University does not assume the responsibility for complying with tax laws on behalf of the organization, such as submission of federal tax form 1099 or the remittance of New Mexico Gross Receipts tax.

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