How Are F&A Encumbrances Handled?
Fixed and administrative costs (F&A, also referred to as Indirect Costs) are overhead costs typically charged to grants at a negotiated, set rate. Commitments that originate anywhere within Lawson applications (including salary encumbrances, requisitions, purchase orders and accounts payable) may be eligible for F&A. The Project Accounting burden feature accommodates charging F&A costs to grants when activity transactions are posted, but there is no current capability to encumber F&A on commitments.
Instead, the Grant Management and Project Accounting applications provide you with the option to calculate encumbrances for F&A costs when you run Commitment Analysis Summary (AC297) or Award Summary Report (GM400).
You can select the account categories eligible for FA encumbrance, specify an F&A rate, and determine the account category to which the F&A encumbrance should be charged. The F&A encumbrance is calculated on current commitments for the activities and eligible account categories selected for the report. These calculations are informational only and do not create actual records. They are used to provide a more complete picture of a grant activity’s total commitments and remaining budget.