F&A Assessment in Workday – Q&A Added

(6/20/2019 – This post has been replaced here.)

Q&A added below (8/23/2018, 8/24/2018, 8/28/2018, and 9/17/2018)


Original Notice, 8/14/2018  –

ASU’s practice has been to assess F&A using Federally negotiated rates applicable to proposal time periods rather than using Federally negotiated rates for actual award periods. This practice results in under-recovery of F&A due to the normal lag from the time of proposal to the time of award. The Workday Financial Management System is designed to assess F&A in accordance with governing Federal regulations (2 CFR 200); i.e. using the University’s Federally negotiated rate agreement for effective periods. For exceptions wherein the sponsoring agency has restricted the F&A rate due to program requirements or other unique circumstances, we are able to create a unique F&A rate agreement within Workday for the affected award.

Continuation of our historic practice of F&A under-recovery would necessitate creation of individual F&A rate agreements in Workday for a vast majority of awards, resulting in increased complexity in the award administration process and an increase in manual data entry.  Consequently, effective July 1, 2018, we will assess F&A according to our Federally negotiated rate agreement. This change will simplify F&A assessment, align our practices with Federal regulations and intent, and will have a minimal impact on award budgets.

If this change negatively impacts your ability to complete your project scope of work, please contact Heather Clark so we can collaborate with you to ensure the success of your research.

For proposals please update the fiscal year in ERA to the next FY for projects starting July 1 – December 31.  For system questions, contact ERA@asu.edu (5-9065, Option 0). For general ASU process questions, contact RAhelp@asu.edu.


Q&A – added 8/23/2018

After the above F&A Assessment in Workday article was posted, several questions came in and were very similar.   Below are the questions and answers:

  1. Has and how will this be communicated to faculty?

Answer:  The RAs should communicate to faculty, as appropriate.  In those cases where the anticipated FY19 impact was significant, KED reached out to faculty on an individual basis.

  1. What are the requirements for F&A exception based on sponsor restriction? If F&A is noted in the Notice of Award (NOA), does that suffice?

Answer:  If the NOA and/or program restricted F&A rate and/or had other unique circumstances, then we are able to create a unique F&A rate agreement within Workday for the affected award.

  1. What is the process to address projects that are on tight budgets where the change will have a negative impact?

Answer:  There is no formal appeals process. If the change negatively impacts the ability to complete the project scope of work, then please reach out to Heather Clark with specifics.

  1. Where will we be able to locate any change to F&A? Will this be noted in Workday or ERA? What is the correct record to review?

Answer:  As of July 1st, this current F&A Rate Agreement is being applied based on the actual award periods.  The rates being applied are in both ERA and Workday. 

Q&A – added 8/24/2018

5. How does KED plan to manage F&A rate changes in the middle of a budget period?

Answer: In Workday, a period of performance of September 1, 2018 – August 31, 2018 will charge F&A at 56.5% (FY19) and 57% (FY20).

With current rates applied, the difference should not be significant as our current rates have been increasing by only 0.5% and the rate will remain at 57% for a few years. Units and PIs have been successfully navigating increases in applied Employee Related Expenses (ERE) and tuition rates, and F&A rate increases should be managed in like manner.

Again, if this change negatively impacts a project team’s ability to complete the agreed upon scope of work, please contact Heather Clark so we can collaborate with you to ensure the success of your research.

6. Will KED honor grant transfer F&A rates?

Yes, this practice has not changed and the information in our Transfer guidance is still accurate.

7. How will this change impact the budget development process at proposal time? 

Answer: At proposal time, RAs should update the fiscal year (FY) in ERA to the next FY for projects starting July 1 – December 31, to ensure the budget estimate has adequate funds for the rates in effect at award time.  

On budget smartform 1.2, F&A Rate Determination, Question 7.0, manually update the Fiscal Year for each budget period to the next Fiscal Year.

  • Example: if the start date is 9/1/2018, ERA will default to ‘2019’ as the Fiscal Year for Period 1. The RA should update Period 1 to 2020, and update subsequent budget periods in turn.

Note: ERA automatically uses the next FY rates for projects starting Jan 1 – June 30, so only projects with a start date in the first half of the fiscal year will need to be manually adjusted.

Q&A – added 8/28/2018

8. Will the new application of the current F&A rate on awards be retroactive to awards already in place or is it effective for new ones coming in as of July 1, 2018?

Answer: Current F&A rates are being applied to all active Awards in Workday that:

  1. Have an award start date that falls on or after 7/1/2016 (the begin date of the first Effective Period in our current F&A Rate Agreement)
  2. Do not have a documented rate limit/reduction (e.g., grant transfers, sponsor limited rates, waivers, etc.)

 That said, current F&A rates will only be applied to expenditures in Workday from July 1, 2018 and moving forward. The rates will not be applied retroactively to expenditures from previous fiscal years.

Q&A – added 9/17/2018

  1. For proposals, should the FY be escalated on ALL proposals, or only when the Federal Research rate applies?

Answer: The pre-award guidance to manually update to the next Fiscal Year (FY) is meant to build room in the budget estimate to accommodate ASU’s incrementally increasing Organized Research F&A rate.

With that in mind, the practice of updating the FY in ERA only applies:

  • To proposals where the full Federal Research rate is used (not for Charitable, Industry, Instruction or Other Activity Type, Off-campus, or proposals with reduced/limited rates).
  • When starting a proposal budget in July-December 2018 (not for any proposals with a start date on or after 1/1/2019).