Contracts and Grants Policy 15 – Facilities and Administrative Costs/Overhead Receipts Allocation

Facilities and Administrative (Indirect) Costs

Unless prohibited by the funding agency, all requests for extramural funding must include facilities and administrative costs. Effective November 23, 2010, UNCG negotiated a modified total direct cost (MTDC) method of calculating facilities and administrative (indirect) costs, please see Federally Negotiated Facilities and Administrative Costs Rate. Modified total direct costs includes all salaries and wages, fringe benefits, materials, supplies, services, travel, and the first $25,000 of each subgrant/subcontract. Modified total direct costs excludes equipment, capital expenditures, charges for patient care, tuition remission, rental costs of off-campus facilities, scholarships and fellowships, and the portion of each subgrant/subcontract in excess of $25,000.

Facilities and administrative costs reimburse the University for laboratory and office space; utilities; administrative services (e.g., purchasing, accounting, research, administration, personnel, security); custodial services; and building, grounds, and street maintenance. In other words, they include all those things essential to support sponsored research which cannot be broken down and directly charged to a specific grant or contract. Facilities and administrative cost percentages are determined annually from actual cost records through a detailed cost accounting procedure and are audited and approved by the federal government. Although the rates may be revised where the sponsor administratively limits facilities and administrative cost recovery, they are not subject to arbitrary adjustment either by the University or the sponsor.

There are organizations which, by regulation, limit facilities and administrative cost recovery. If the proposal is being submitted to such an agency, a copy of their policy must be submitted to the Office of Contracts and Grants with the proposal, if a copy is not already on file.

The University has separate facilities and administrative cost rates for research performed on and off campus. Based on the terms of UNCG’s federally negotiated Facilities and Administrative Costs agreement, the off-campus facilities and administrative cost rate applies to all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project.

Overhead Receipts Allocation

The University has adopted an overhead receipts allocation policy that returns 10% of the overhead revenues to the principal investigator. This allocation policy is based on prior year’s revenues. Therefore, 10% of the revenues earned in the current fiscal year will be available to the principal investigator in the next fiscal year. The total allocation is:

10% Principal Investigator

10% Department Head

80% Provost recommends allocation to the Chancellor