Policy Relating to the Distribution of Indirect Costs ...



Policy Relating to the Distribution of Indirect Costs Recovered Through External Grant AwardsEffective: February 7, 2003Amended: May 7, 2004 , January 7, 2005, May 22, 2006, September 2010, and September 2011Section I: PurposeThis policy codifies the distribution of indirect costs recovered in connection with external grants awarded to the University of St. Thomas on behalf of faculty and staff certified as qualified to serve as principal investigators. In so doing, it strives to import a coherent and transparent allocation process that fosters rational, accountable, and well-informed institutional investments into projects and infrastructure that significantly enhance research and scholarship pursued at the University.Section II: DefinitionsCosts incurred by the University relating to externally-funded projects can be understood as “direct costs” or as “indirect costs.” “Direct costs” are those costs that can be linked directly to a particular sponsored project with a high degree of accuracy. Direct costs must be reasonable in the context of the sponsored project and clearly allocable to that project.“Total direct costs” is the sum of all direct costs relating to a sponsored project.“Total modified direct costs” is the sum of all direct costs relating to a sponsored project minus the following: equipment, capital expenditures, tuition remission, rental costs, scholarships and fellowships, and the cost of each subgrant in excess of the first $25,000.“Indirect Cost Recovery” (ICR) or “Facilities and Administrative” (F & A) costs, are costs incurred by the University for common or joint projects and cannot be specifically attributed to an individual project. Some examples of indirect costs include accounting staff, the maintenance of physical facilities, building depreciation, libraries, operations, affirmative action monitoring, animal and subjects protection, computer infrastructure, custodial services, environmental health and safety, employee benefits, purchasing services, and security services.Section III: Charging Indirect CostsIndirect costs are recovered from the funding agency—when allowed—in recognition of the real and unallocable costs incurred by the University when it hosts a sponsored activity. Typically, indirect costs are charged at a flat rate against total modified direct costs anticipated in connection with the sponsored activity. The default rate is negotiated between the University and a cognizant federal agency every 3 to 5 years, and the University of St. Thomas’ current indirect cost rate is 41% of total modified direct costs (expiring June 30, 2017). This rate applies to all federal grant programs and many state programs as well. Some funding agencies allow complete recovery of indirect costs on a program-to-program basis, while others publish a hard cap on the rate at which institutions are allowed to capture these costs. Still others forbid the collection of any indirect costs at all. Section IV: RationaleThere are no federal or state restrictions on how recovered indirect costs can be used by the receiving university. These funds need not be allocated in the same categories and proportions used in determining the institutional ICR rate. Accordingly, the University of St. Thomas has complete latitude to determine how these funds are distributed. This policy redirects the allocation of indirect costs captured in connection with externally-funded grants in ways that 1) enhance institutional support for research and scholarship; 2) increase faculty competitiveness in statewide and national grant competitions; 3) magnify the impact of current internal and external investments in faculty-driven research and scholarship; 4) provide direct and significant incentive for faculty, academic departments, and collegiate units to invest in faculty research and scholarship; and, 5) enhance the national profile of the University of St. Thomas.Section V: PolicySubsection 1. Distribution of Recovered Indirect Costs. Effective February 7, 2003, in cases where the funding agency commits funds for ICR and there is no commitment of matching cash from the University of St. Thomas (see below, Section V, Subsection 4), captured funds will be distributed as follows:Please note: This distribution matrix has been replaced as described in Amendment VI below.Receiving UnitAllocationNotesGeneral Operating Fund50%In recognition of the unallocable costs incurred by the University of St. Thomas in connection with externally-funded grant initiatives.Principal Investigator’s Dean30%In order to provide resources necessary to strengthen the research enterprise pursued within the dean’s area of responsibility.Principal Investigator’s Chair10%In order to provide resources necessary to strengthen research undertaken by faculty in the principal investigator’s department.Grants and Research Office 10%In order to create additional resources for allocation to faculty seeking external support for institution-building grants.Subsection 2. Co-Principal Investigators. In the case of a sponsored project that has one or more co-principal investigators, the distribution of recovered indirect costs will be directed to the dean and departmental chair of the principal investigator of record only.Subsection 3. Disbursement of Funds. Units scheduled to receive disbursements of indirect cost recovery will receive their funds in the same fiscal year as the funds are recovered from the external grant according to procedures established by the University of St. Thomas’ Controller’s Office.Subsection 4. Cash Matches. In cases where the University commits any cash match to a sponsored project, 100% of indirect costs captured by the University from the funding agency shall be allocated to the General Fund.Section VI: Amendments Amendment I (effective May 7, 2004). Non-Compliance. Should a faculty member submit a grant proposal to an external funding agency without obtaining the necessary signatures on the internal Proposal Routing Form prior to submission, the distribution of ICR will be as follows:Receiving UnitAllocationGeneral Operating Fund75%Principal Investigator’s Dean0%Principal Investigator’s Chair 0%Principal Investigator’s Incentive Account0%Grants and Research Office 25%Please note: This distribution matrix has been replaced as described in Amendment VI below.Amendment II (effective January 7, 2005). Change in Distribution of ICR. In an effort to encourage external grantseeking and to provide additional opportunities for faculty and staff to pursue professional development and research that will enhance their competitiveness in future grant competitions, the distribution of ICR will be changed as per the following table:Receiving UnitAllocationNotesGeneral Operating Fund50%In recognition of the unallocable costs incurred by the University of St. Thomas in connection with externally-funded grant initiatives.Principal Investigator’s Dean30%In order to provide resources necessary to strengthen the research enterprise pursued within the dean’s area of responsibility.Principal Investigator’s Chair5%In order to provide resources necessary to strengthen research undertaken by faculty in the principal investigator’s department.Principal Investigator’s Incentive Account5%Deposited into a “Principal Investigator’s Incentive Fund” to be used at the discretion of the principal investigator for professional development and research expenses.Grants and Research Office 10%In order to create additional resources for allocation to faculty seeking external support for institution-building grants.Use of the Principal Investigator’s Incentive Fund is subject to administrative policies established by the Grants and Research Office in collaboration with Academic Affairs and the Controller’s Office.Amendment III (effective May 15, 2006). Compliance with Internal FGO Deadlines. In the event that a principal investigator does not meet the requirements of the policy on Internal Deadlines for the Submission of Grant and Contract Proposals, the distribution of ICR will be changed as per the following table:Receiving UnitAllocationGeneral Operating Fund50%Principal Investigator’s Dean0%Principal Investigator’s Chair 0%Principal Investigator’s Incentive Account0%Grants and Research Office 10%Academic Affairs40%Please note: This distribution matrix has been replaced as described in Amendment VI below.Amendment IV (effective September 9, 2010). Change in Distribution of ICR. In an effort to enhance the research environment at UST, the distribution of ICR will be changed in the following ways. This amendment replaces all previous distribution matrices.Receiving UnitAllocationGeneral Operating Fund50%Grants and Research Office 20%Deans 20%Institutional Review Board10%Compliance with Internal GRO Deadlines. In the event that a principal investigator does not meet the requirements of the policy on Internal Deadlines for the Submission of Grant and Contract Proposals, the distribution of ICR will be changed as per the following table. This amendment replaces all previous distribution matrices relating to non-compliance.Receiving UnitAllocationGeneral Operating Fund50%Grants and Research Office40%Deans0%Institutional Review Board10%Amendment V. (effective September 9, 2010). Revocation of Section V, Subsection 4. Indirect cost recovery will be distributed as iterated below in Amendment VI even in cases where the University contributes a cash match to a proposed sponsored project. This amendment negates the terms of Section 5.,Subsection IV above.Amendment VI. (effective September 1, 2011). Change in Distribution of ICR. In an effort to enhance the research environment at UST, the distribution of ICR will be changed in the following ways. This amendment replaces all previous distribution matrices.Receiving UnitAllocationGeneral Operating Fund50%Grants and Research Office 30%Deans 20%Compliance with Internal GRO Deadlines. In the event that a principal investigator does not meet the requirements of the policy on Internal Deadlines for the Submission of Grant and Contract Proposals, the distribution of ICR will be changed as per the following table. This amendment replaces all previous distribution matrices relating to non-compliance.Receiving UnitAllocationGeneral Operating Fund50%Grants and Research Office50%Deans0% ................
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