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INDIRECT COSTS

INDIRECT COSTS. Aka: General Operating Funds, Administrative Overhead, F&A (Facilities and Administrative), Overhead Costs. Indirect Costs. Covers services and products essential for your overall organization, and consumed, in some small degree, by your projects. Indirect Costs. Examples:

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INDIRECT COSTS

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  1. INDIRECT COSTS Aka: General Operating Funds, Administrative Overhead, F&A (Facilities and Administrative), Overhead Costs

  2. Indirect Costs • Covers services and products essential for your overall organization, and consumed, in some small degree, by your projects

  3. Indirect 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

  4. Indirect Costs • Examples: • Custodial services • Security • Accounting • Payroll • Legal support

  5. Indirect 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%

  6. Indirect 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

  7. Indirect 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!!

  8. Indirect 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

  9. Indirect Costs • Other uses: • Building a fund for special purpose – • Professional development • Grant solicitation travel • Student travel • One-time purchase • Faculty recognition

  10. Indirect 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

  11. Indirect costs • Worksheet website • http://www.ccas.com/ccasrate.html CCAS is a software company, not a government agency • http://www.dau.mil/pubs/gdbks/icmguide.asp Indirect Cost Management Guide, 1998, a whitepaper from Department of Defense

  12. Indirect Costs • Indirect costs are reality – all institutions should negotiate a rate

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