F&A Distribution Announcement
Dear Colleagues,
Over the past year, we have committed to keeping you informed as the federal research funding landscape evolves and to restoring the distribution of Facilities and Administrative (F&A) funds when conditions allow. Today, we are pleased to share an important step forward.
F&A distributions will return Oct. 1
Beginning Oct. 1, UNC Charlotte will return to distributing recovered F&A funds to principal investigators, departments, colleges and centers (full guidance):
- 10% to principal investigators
- 10% to departments
- 10% to colleges and centers, divided equally when a center is involved
The Oct. 1 effective date provides the time necessary to complete the current distribution cycle and make the financial system changes required to return to the previous model.
Why we are making this change now
This decision follows careful consultation with Chancellor Gaber and reflects a modestly improved outlook for federal F&A funding.
Over the past year, litigation and congressional action have slowed or temporarily prevented several proposed changes to how universities are reimbursed for the shared costs of conducting federally sponsored research. While uncertainty remains, significant changes to the current F&A model no longer appear as imminent as they did a year ago.
We believe restoring these funds is the right investment in our faculty and research enterprise under current conditions. We also recognize how important F&A distributions are to PIs, departments, colleges and centers in supporting ongoing research and creating opportunities for future growth.
Why distributions were reduced
The reductions over the past year were necessary because the University was operating in a materially different financial environment. During this period:
- Sponsored-project expenditures declined approximately 15% amid slower federal awards, terminations and other policy changes.
- F&A revenue declined as a result. F&A is generated through sponsored-project expenditures, so lower expenditures meant fewer funds were available to distribute.
- The costs of supporting research continued. The University still had to maintain the infrastructure, services and personnel necessary to support research, while some costs, including federal research security and compliance requirements, increased.
Simply put, there was less F&A available to distribute while the University continued to bear the costs necessary to support the research enterprise.
For that reason, the University is unable to retroactively restore F&A distributions that were reduced during this period. Those funds were needed to sustain shared research infrastructure and services during a period of reduced revenue.
At the same time, the University did not reclaim F&A that had already been distributed to PIs, departments, colleges and centers. Approximately $10.5 million in previously distributed F&A remains available to those units, and there are no plans to reclaim those funds.
What happens if federal policy changes
We also want to be transparent that while we remain cautiously optimistic about the current landscape, it is not without remaining uncertainty.
We intend to continue this distribution unless there is a substantive change in federal law or policy that significantly affects the University’s ability to recover F&A. Should that occur, we may need to reassess the distribution model again. As we have throughout this period, we will communicate any future changes as circumstances warrant.
Moving forward
We appreciate your patience through what has been an unusually uncertain period for research funding and, more importantly, the work you have continued to do throughout it.
We are pleased to be in a position to restore these funds and reinvest more directly in the faculty and units driving UNC Charlotte’s research momentum.
As always, please never hesitate to reach out to us with any questions.
Sincerely,
John Daniels
Vice Chancellor for Research
Deb Thomas
Associate Vice Chancellor for Research