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INDIRECT COSTSINDIRECT COSTS
Aka: General Operating Funds, Administrative Overhead, F&A (Facilities
and Administrative), Overhead Costs
Indirect CostsIndirect Costs
• Covers services and products essential for your overall organization, and consumed, in some small degree, by your projects
Indirect CostsIndirect Costs
• Examples:• Telephone bill• Space rent or payment• Electricity• Insurance• Equipment used by everyone, not just for
your project (xerox, laboratory equipment, pencil sharpeners, file cabinets)
• Wear and tear on equipment
Indirect CostsIndirect Costs
• Examples:
• Custodial services
• Security
• Accounting
• Payroll
• Legal support
Indirect CostsIndirect Costs
• Calculated as a % of total direct costs • Indirect Cost Pool
Direct Cost Base = Indirect Cost Rate• Approved rate from a state or federal
agency• Range – 5% of a chartered school to
75% research university• Most – 48%-57%• Off Campus lower – 17% to 27%
Indirect CostsIndirect Costs
• Some grants restrict or cap the amount of indirect cost allowed, i.e. 5% or 10% of the total budget
• Equipment over a certain amount is excluded in the calculation - $500 to $5000 defines equipment
• Also excluded – off campus facility rental, patient care charges, scholarships, fellowships, tuition remission, subgrants
Indirect CostsIndirect Costs
• Bad Idea: Waive all or part of indirect cost rate as an inkind contribution
• Indirect costs contribute to the university’s ability to support research and grantsmanship. It is needed: it is planned for by the granting agency.
• DON’T WAIVE IT!!
Indirect CostsIndirect Costs
• Other uses:
• Sharing with the grant writer or principal investigator (PI) for support
• Sharing with the department sponsoring grant
• Sharing with the college sponsoring grant
Indirect CostsIndirect Costs
• Other uses:
• Building a fund for special purpose –
• Professional development
• Grant solicitation travel
• Student travel
• One-time purchase
• Faculty recognition
Indirect CostsIndirect Costs
• Oklahoma Higher Education Institutions
• Indirect cost range: 43-52%
• Some use only salary and fringe benefits
• Off campus – 13-28%
• Of the 25 institutions, 7 do not have an indirect cost rate established
Indirect costsIndirect costs
• Worksheet website• http://www.ccas.com/ccasrate.htmlCCAS is a software company, not a
government agency• http://www.dau.mil/pubs/gdbks/icmguide.a
spIndirect Cost Management Guide, 1998, a
whitepaper from Department of Defense
Indirect CostsIndirect Costs
• Indirect costs are reality – all institutions should negotiate a rate
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