Facilities and Administrative Costs on Grants to Academic Institutions
for Research Conducted at Veteran Administration Sites

There are three categories of National Institutes of Health (NIH) grant awards that involve the Veteran Administration (VA):

(1) Direct grants to the VA – NIH-awarded grants to the VA with VA employees conducting the research. These awards provide the direct costs of the research (except Federal salaries) and no facilities and administrative (F&A) costs.

(2) Grants to not-for-profit (501(C).(3) VA foundations – These awards provide funds for the direct costs of the research (except Federal salaries) and F&A costs at the foundations’ federally negotiated F&A rate.

(3) Grants to universities (or hospitals) – These awards are made to universities. However some of the research is conducted in the VA facilities. The principal investigator of the university grant is a VA employee with a joint appointment at the university or hospital. The university receives F&A costs at the relevant federally negotiated rate.

The VA has requested F&A cost reimbursement on the third category described above. Since 1982 the Department of Health and Human Services (DHHS) has had a policy in effect that prohibits payment of F&A costs to Federal institutions, including the VA. The NIH complies with the HHS policy and asserts that the VA’s infrastructure is supported through its own Federal appropriation. The NIH pays the university F&A for its portion of the research and the VA Federal facilities and administration costs are covered by its appropriations.

The NIH values the contribution that VA researchers make to the U.S. research enterprise. Because of this, in 1989 the NIH implemented a policy recognizing joint personnel appointments of VA staff and permitting VA employees to apply for research support on grants submitted by their affiliated university and for the university share of such investigators’ salary to be requested in proportion to the effort devoted to the research project. This policy promotes the vibrant research collaboration between the VA and the NIH by assuring the VA's ability to recruit and retain the best researchers.

There is no justification for NIH to deviate from DHHS’ current policy prohibiting reimbursement to Federal agencies for their F&A costs. This policy is consistently applied to all Federal grantee institutions funded by the NIH.

Updated: August 13, 2003

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This page last updated on August 13, 2003 
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