Updated Guidance on Use of Fringe & F&A Rates for Proposal Budgets
June 5, 2026
Northwestern’s negotiations for updated fringe and F&A rates remain significantly delayed. Our current DHHS-approved rate agreement includes predetermined rates only through 8/31/2026, with provisional rates beginning 9/1/2026. In prior years, we would already have a new agreement in place to support FY27 budgeting.
Last year, Sponsored Research allowed use of University proposed rates for proposal development. However, proposed rates are not federally approved, and as awards begin to arrive, we must revert to the current approved rates. To ensure compliance, we are updating our guidance.
Effective immediately, all proposal budgets must use the provisional rates listed in Northwestern’s signed DHHS rate agreement - not the University’s proposed rates. Federal reimbursement cannot exceed approved rates.
In-Progress Proposals and Future Rebudgeting
We will not require revisions for proposals already in workflow for imminent deadlines. All future submissions, especially those likely to result in near-term federal awards, must use only the current approved rates. We recognize the challenge of budgeting without the most accurate fringe projections. Once a new rate agreement is issued, updated fringe rates may be charged through standard rebudgeting authority.
Budget Justifications
Please ensure your budget justifications include the required rate statements and the date of the rate agreement. Even when a sponsor does not require a justification, one is still required internally.
Add the following statements to all Federal proposal budget justifications:
Employee benefits have been calculated based on the following DHHS-approved rates (F&A and Fringe Rate Agreement dated 07/17/2024):
- 09/01/24 – 08/31/25…. 28.1%
- 09/01/25 – 08/31/26 and thereafter…. 28.1% (provisional)
F&A has been calculated based on the following DHHS approved rates (F&A and Fringe Rate Agreement dated 07/17/2024):
- 60.0% MTDC 09/01/23 – 08/31/26 (Predetermined)
- 60.0% MTDC 09/01/26 – 08/31/27 and thereafter (Provisional)
As a reminder, non-Federal projects are not covered under our DHHS rate agreement. Internal budget justifications must still specify the rates used and note any sponsor restrictions or exclusions from the indirect cost base. Additional guidance is available on the SR website.