Facilities & Administrative (Indirect) Cost Rates
Southern Illinois University at Carbondale and the Department of Health and Human Services (cognizant negotiation agency on behalf of the federal government) have negotiated a new Indirect Cost Rate Agreement for Research and Sponsored Instruction. The following F&A cost rates for sponsored projects at SIUSOM will be in effect from 7/1/12 through 6/30/16:
SIUC's rates are set by the U.S. Department of Health and Human Services.
[see Rate Agreement]
The indirect costs, or overhead expenses, of a project are just as real as the direct costs, though less visible. The federal government classifies these expenses as "facilities & administrative (F&A) costs," though you may still see the term "indirect costs" on nonfederal grant application forms. These costs include such things as space and facilities maintenance, utilities, library resources, processing of project-related fiscal paperwork by University service offices (Accounting Services, Purchasing, etc.), monitoring of project expenditures and compliance with government regulations, and numerous other research support services at the University.
It is the University's policy to recover the relevant federally audited F&A (indirect) cost rate (set by the U.S. Department of Health and Human Services) from all agencies that are legally bound by that agreement and from all other federal, state, and private funding agencies that will reimburse the University at the audited rate. The rate varies depending on whether the sponsored project is for research, training, or other activities and whether it will take place primarily on or off campus.
In instances where an agency's official indirect costs reimbursement rate is less than the audited rate, or where an agency does not allow any overhead, the agency must provide a statement of its public policy on indirect costs reimbursement within their grant guidelines. A reduction or waiver of indirect costs can only be granted by the Associate Dean for Research, Dr. Linda Toth.
The Indirect Cost Rate Agreement is on a modified total direct cost (MTDC*) base and includes both on-campus and off-campus rates. The criteria for determining "on-campus" versus "off-campus" is if the activity is performed in facilities not owned by the University and to which rent is directly allocated to the project(s) then the off-campus rate should be used. Grants or contracts will not be subject to more than one indirect cost rate. If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project. In all other instances, the on-campus rate should be used. The modified total direct costs (MTDC) based indirect cost rates apply to all grant and contract agreements. *Based on modified total direct costs (MTDC) which are defined as the total direct costs of the project less capital expenditures (building, individual items of equipment, alterations and renovations) and the portion of each individual subgrant or subcontract in excess of $25,000 minus patient care.
Note: For indirect cost purposes, equipment is defined as an item of nonexpendable tangible personal property having a useful life of more than one year and an acquisition cost of $5,000 or more. For purposes of providing the information required in grant funding proposals, the following is applicable:
- The cognizant federal agency which approved the rate is the Department of Health and Human Services.
- The date on which the rate was approved (SIUC's latest rate agreement is dated October 18, 2012).
- The period of time to which the rate is applicable is 7/1/12 - 6/30/16.