Purpose
Ohio University recovers indirect costs (formerly known as Facilities & Administration costs) through the expenditure of funds in restricted accounts, which support external research and creative activity. Facilities & administration (indirect) costs represent the real costs of performing sponsored programs activities. Ohio University has negotiated with and were approved by the Federal Government for recovery through our indirect cost rates. Proposals for such funding must budget the appropriate indirect cost rate, when allowed by the sponsor. We are required to consistently apply our negotiated indirect cost rates with all sponsors.
Scope
This procedure applies to all sponsored projects subject to OU Policy 19.045 Administering External Grants and Contracts set up as separate accounts in the OHIO Financial Management System (FMS).
Procedure
Indirect Cost Rate Agreement
Ohio University negotiated the current Indirect Cost Rate Agreement [PDF] with the Department of Health and Human Services on January 16, 2019. A good explanation of the costs represented by these charges can be found in this short video .
The following provisional rates are effective July 1, 2024:
Indirect Cost Rates
Organized Research: 51% (effective July 1, 2017)
Instruction: 49.0%
Other Sponsored Activity: 39.0%
Off-campus: 26.0%
Determining On-Campus vs Off-Campus Rates
Application of Indirect Cost Rate
All proposals submitted to federal agencies must include the negotiated indirect cost rate established between OHIO and the Federal government. In the event legislation governing any particular federal funds has statutory limitations on indirect cost recovery or the funding agency has special authority to limit indirect cost recovery, the statutory limitation or agency specific rate must be used.
Proposals submitted to state or other funding agencies must include the negotiated indirect cost rate or the approved agency specific rate. Otherwise full indirect costs are assessed with all sponsors. Any other reduction of indirect costs will rarely be made and would require alignment with a long planned and discussed institutional strategy. As such, any such request must be submitted by a College Dean, or equivalent, to the Vice President for Research and Creative Activity, at least 60 days prior to internal routing deadline in writing for consideration. Reductions are rarely considered to be justifiable.
Indirect Cost Methods
The indirect cost rate is applied to the grant or contract using one of the following methods:
Modified total direct costs (MTDC), consisting of all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and sub-grants and subcontracts up to the first $25,000 of each sub-grant or subcontract (regardless of the period covered by the sub-grant or subcontract). Modified total direct costs shall exclude equipment, capital expenditures, charges for patient care, student tuition remission, rental costs of off-site facilities, scholarships and fellowships, participant support costs and the portion of each sub-grant and subcontract in excess of $25,000. Rates negotiated between the University and the Department of Health & Human Services for the federal agencies in accordance with OMB Uniform Guide 2 CFR 200.
Total direct costs (TDC), consisting of all direct costs with no exemptions.
Refer to the sponsor guidelines to determine which method is applicable.
Indirect Costs on Subrecipient Budget
Subawardees on Ohio University grants will use their federally negotiated rate calculated with the same method as the prime. Subawardees that do not have a federally negotiated rate may elect to use the de minimis rate of 15% for proposals submitted on or after 10/1/2024.
Questions
Questions regarding this procedure can be sent to orsp@ohio.edu .
Forms/Templates
Contact your Sponsored Programs Manager for the appropriate budget template
Roles and Responsibilities
OWNER: PI
CONTRIBUTOR: ORSP, CFAO/BUM
APPROVER: VPR