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Indirect Cost Distribution

Indirect Costs (also called Facilities and Administrative costs or F&A) are those expenditures that colleges and universities incur in support of an institution's major, mission-related functions or activities: organized research, instruction, other sponsored activities, and other institutional activities. Circular A-21 section E.1 defines F&A costs as "those that have been incurred for common or joint objectives and, therefore, cannot be identified readily and specifically to a particular sponsored project, an instructional activity, or other institutional activity." They benefit so many projects or activities that it would not be reasonable to direct charge them to a particular sponsor.

Functions of Indirect Cost

Indirect cost commonly covers these areas: building depreciation, equipment depreciation, general administration costs (deans' offices, departmental administrators, clerical assistants, accounting, purchasing, executive administration), sponsored project offices, library expenses, utilities, grounds, security, and interest costs relating to external debt on buildings.

Accountability and Transparency

The Office of the Vice President for Research will require each PI, college and university center to provide a brief annual report on the expenditure of indirect costs funds.

Effective September 1, 2011

Allocation of University indirect costs received:

40%       Business Affairs Division
35%       Division of Research
10%       Principal Investigator
15%       College or Administrative Cost Center

40%        Business Affairs Division
30%        Division of Research
10%        Principal Investigator
16%        University Center
4%          College or Administrative Cost Center

Appropriate Use of Indirect Costs
Indirect Costs may be used for:
  Routine matching funds included within proposals
 Minor research renovations
 Maintenance of facilities
 Support for common or shared administrative structures
 Staff to support research activities
 Equipment to support research activities
 Seed money for new research projects and
 Other appropriate items related to the administration of research
Reallocation of Departmental Costs to Indirect Costs
Grant administration costs should be transferred to or funded by the division department for research enhancement.  Documented costs can be transferred via journal entry as prepared by the Business Office.  Memorandums of employment can be adjusted to reflect a percentage of salary, which is attributable to sponsored project administration.
Departmental budget released by indirect costs will be maintained by that department and will be used for general departmental functions.



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