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Indirect Cost Rate Agreement and Distribution Models

Indirect Cost Rate Agreement

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. Proposals for such funding must budget the appropriate indirect cost rate, when allowed by the sponsor. In limited instances, an Institutional waiver of indirect costs may be requested from the Vice President for Research, Dr. Joseph Shields. 

The current Indirect Cost Rate Agreement was negotiated with the Department of Health and Human Services on September 18, 2015. The following rates remain in effect until June 30, 2019:

 

Indirect Cost Rates

Organized Research: 51% (effective July 1, 2017) 
Instruction: 49.0% 
Other Sponsored Activity: 39.0% 
Off-campus: 26.0%**

 

Applying Indirect Cost Rates

In most cases, apply Facilities and Administrative cost rates to a modified total direct cost (MTDC) base. The rates are applicable to all direct costs with the exception of the following:

  • Equipment items with a threshold of $5000 or greater and a life expectancy of one year or more; Nonexpendable items valued at less than $5000 or with less than a one-year life expectancy should be budgeted as materials and supplies.
  • Participant support
  • Tuition
  • Indirect Cost is only applied to the first $25,000 of each subcontract or sub-award.

In some cases, apply Facilities and Administrative cost rates to a total direct cost (TDC) base. The rates are applicable to all direct costs without exception.

For questions regarding Ohio University's negotiated indirect cost rate, please contact your sponsored program manager.

 

Determining on-Campus vs. Off Campus Rate

Use the off-campus indirect cost rate when the preponderance (50% or more) of work is performed in off-campus space.

Preponderance of work is determined by examining the proportion of time and effort that OHIO project personnel (faculty, staff, and students) spend working on project activities in on-campus vs. off-campus locations. Subawards and vendors are not included for this determination.

On-Campus – activity conducted in space owned and controlled by the University and for which the University is bearing the costs of the space from University sources. Costs associated with the space used for on-campus research and sponsored programs have been included in the facilities portion of the indirect cost rate.

Off-Campus – activity conducted in space not owned and controlled by the University for which the University is not bearing the costs of the space from University sources. Costs associated with the space used for off-campus research and sponsored programs have not been included in the facilities portion of the indirect cost rate.

Rented or Leased Space – space used for research and sponsored programs but not owned or controlled by the University, the costs of which are paid from University, sponsor, or donated sources are considered on-campus except where the space is direct charged to the sponsor through a grant or contract.

Federal Disclosure Statement (DS-2) Section 3.3.0:
For projects (a scope of work or activity with a separate budget and accounting) for which 50% or more of the salary and wages are incurred in facilities not owned and controlled by the University and for which rent is allocated as a direct cost to the project(s), the off-campus rate will apply to the entire project task.

 

Research Incentive Distribution Models

Funded project budgets that include full indirect costs may redistribute a portion of the recovered indirect costs to the investigator. Ohio University has policies (  19.053  and  19.056  ) which direct distribution of a portion of the recovered indirect costs back to the principal investigator, center, department, and college associated with the funded proposal. These funds are deposited into Research Incentive (RI) accounts, specific to the PI/PD, center, department, and college based on the distribution models described below. Allocation of research incentive funds are made available on a monthly basis during the project period.

RI funds are managed directly by the named account holder and are subject to the policies and procedures that govern expenditures in the University financial management system. The use of RI funds is restricted to the enhancement of activities related to the funded project and/or to assist in the development of new projects. Funds may be used for, but not limited to, the costs of writing new proposals, travel associated with the development of proposals for external funding, pilot studies for new projects, equipment, student support, and professional development. Funds unspent at the end of the fiscal year may be appropriated and made available in the subsequent fiscal year.

Submission through an Ohio University Board of Trustees  approved Center or Institute  or through a department or school impacts which distribution model may be employed. In addition, pre-approved modification of the below models may occur if granted by the Assistant Vice President for Research, Mo Valentine, or by the Vice President for Research and Creative Activity, Dr. Joseph Shields. The approved reduction agreement will be reflected in the distribution formula presented in the electronic award letter notification.

 

Department Distribution Model

For awards made to Ohio University (which include indirect costs as a budget line) that declare the project is being administered (at time of submission through the electronic Transmittal Form) through an academic DEPARTMENT of the institution, 100% of the revenues will be distributed as follows:

100% - College 
   18% - Principal Investigator 
     7% - Department 
   18% - VPR Investment Fund


To calculate (using $100,000 as the total indirect cost amount), apply the percentages above to calculate recovery amounts as labeled: Example: To find the PI portion: Take $100,000 x 0.18 = $18,000.

 

Center or Institute Distribution Model

For awards made to Ohio University (which include indirect costs as a budget line) that declare the project is being administered (at time of submission through the electronic Transmittal Form) through a Board of Trustees approved CENTER or INSTITUTE, 100% of the revenues will be distributed as follows:

100% - College 
       14% - Principal Investigator 
         7% - Department 
       30% - Center 
       18% - VPR Investment Fund 

To calculate (using $100,000 as the total indirect cost amount), apply the percentages above to calculate recovery amounts as labeled: Example: To find the PI portion: Take $100,000 x 0.14 = $14,000.

For questions regarding the distribution of recovered indirect costs, please contact ORSP@ohio.edu or call 740-597-ORSP (6777).

 

Fringe Benefits Rates

Rates: Fringe Benefits Standard Benefit Rates