Research Policies and Procedures

Research Policies

POLICY ON RESEARCH FACILITIES AND ADMINISTRATIVE (F&A) COSTS (Also Referred To As Indirect or Overhead Costs)

Definition: Also called Facility and Administrative (F&A) costs or administrative overhead, indirect costs is the term used to describe a number of costs associated with the constant running operation of the university and various projects' operating costs, but are not directly linked to the project's activities. F & A costs are those expenditures incurred in the conduct of research that are not readily or effectively traceable to specific expenses. However, these are real costs and must be part of the budget for a research project. If indirect costs are not recovered in project funding, the University must recover these costs from other revenue sources and thereby subtract from other University operations. Indirect costs components include, but not limited to:

• Occupancy & Building Use
• Central Administration: OGC, financial services, purchasing, payroll, accounting, personnel, supply, receiving, etc..
• Library
• Capital Equipment including Depreciation
• Faculty/Department Administration
• Physical Plant
• Student Services

The direct costs to which the F&A cost rate is applied are referred to collectively as the "facilities and administrative cost base" or "collection base."

Policy:

Indirect costs are recovered through a percentage assessment on the direct costs charges. Most funding agencies reimburse the direct costs charged to specific projects as well as the facilities and administrative (F&A) costs that support research projects generally. This charge is determined by applying either a fixed percentage (20%), or F&A cost rate (61.2% on salaries not including fringe benefits on U.S. federal grants), to certain direct costs charged to that project during the fiscal year. A rate of 25% overhead charges are added to all service grants. Any F&A costs not charged to a particular sponsored project are not absorbed by other projects, but must be funded by the University.

Exceptions: This policy should be consistently applied, except in instances where a sponsor's formally established research policy prohibits indirect cost recovery. In the case where the sponsor has indirect cost limitations, a decrease in the approved University indirect cost may be applied with the prior approval of the Office Grants and Contracts. If there is no such restriction by the sponsor, and the indirect cost was not included in the proposed budget, indirect costs at the University's established rates will be deducted from funds received. Exceptions to these indirect cost rates can be made by the the Provost and the Director of the Office of the Grants and Contracts only in rare instances. They should not be discussed with potential funding sources without prior Office of Grants and Contracts approval.