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Depending on whether a project is being carried out on campus or off-campus, different indirect rates may apply. What if I wanted to apply to a program that does not allow indirect costs or that limits indirect costs? In most cases, the university may accept limited rates imposed by sponsorship agency guidelines. The sponsorship agency`s written documents (i.e. a copy of the implementing guidelines) must be attached to the internal verification and authorization form to document these restrictions. Back to above Uniform instructions (Annex III to Part 200-indirect (R-D) costs…) require that costs incurred for the same purpose in similar circumstances be systematically considered direct costs or research and development costs. There are special situations where costs may be incurred for the same purpose, but the circumstance is not the same. For example, salaries of administrative staff would normally be considered research and development costs because they are borne for the same purpose. However, if these collaborators perform project-specific activities or exceptional amounts of routine activities related to large projects involving multiple auditors, they may be billed directly based on the relative time spent on the project. For-profit sponsors: for beneficiaries, the rate of R and D complete corresponding to the sponsored activity is calculated. Without full cost coverage, the university subsidizes the cost of the project for the sponsor.

This is tantamount to giving public funds to a private benefit, which is not in the interest of the citizens of the Commonwealth of Kentucky. Why does the university require project managers to record indirect/R-D costs? Research and development costs are real costs borne by the university for the management of a sponsored price. Since it is not possible for a project budget to allocate these costs, the federal government uses a rate model to account for these expenditures and to provide a fair and consistent method for reimbursement. The university requires sponsored project budgets to include R and D, since each funded project is funded by administrative facilities and costs and that, without funding to cover these costs, the university would not have infrastructure to support sponsored projects. It would be unfair to require students to cover these costs with education income, especially for projects that are not for their direct benefit. The return to practice of full cost coverage of Top UofL requires all senior university investigators to carry out sponsored projects on a full cost recovery basis – in order to demand and obtain full indirect costs from all sponsors. The basis is the sum of the costs on which the indirect cost rate is applied. As a general rule, indirect costs are calculated either on the basis of the total direct cost (TDC), a modified MTDC base (Total Direct Cost) or a total cost base (TC). Check the university guidelines and the sponsor for the management.

If the guidelines are unclear or if a base other than the TDC, MTDC or TC is specified, please consult your respective sponsor program representative.