Office of Sponsored Programs - 300.09 - Indirect Costs

Title

Office of Sponsored Programs - 300.09 - Indirect Costs

Purpose

In assisting the University's departmental research administrators, this operating standard provides guidelines for budget planning of indirect costs in accordance with Federal regulations.

Policy Statement

Indirect costs or Facilities and Administrative (F&A) costs are real University costs that are associated with the performance of a sponsored project. They are incurred for common or joint objectives, which cannot always be specifically identified with a particular sponsored project. F&A costs are recovered by application of a rate that is applied to a direct cost base.

All grants, contracts, and other sponsored agreements accepted by the University will be charged the maximum allowable Federally-negotiated F&A cost rate or other published University F&A rate as determined by the type and location of the sponsored activity.

The University will fully recover its allowable and appropriate direct costs and F&A costs in the budget of every proposal that is submitted for sponsored funding, using the appropriate rate. In accordance with 2 CFR §200.414, the negotiated F&A rate in effect at the time of an initial award will be used throughout the life of each competitive segment even if the F&A rate subsequently changes.

Exclusions

Non-Profit & Governmental Sponsors

The University will grant an exception to charging full F&A costs for non-profit sponsors and governmental agencies that have explicit, published policies limiting F&A recovery. A copy of the published restriction or their F&A rate must be attached to the proposal in Research Administration Management System and eSubmission (RAMSeS). The reduced F&A rate will be applied to total direct costs unless the sponsor’s published guidance states otherwise.

For-Profit Sponsors

For-profit sponsors are charged the full F&A rate appropriate for the project activity. A subsidy of any cost of the project would constitute a use of public funds for private benefit and would be an improper use of University resources.

Other Exclusions and Exceptions to the full recovery of F&A costs will be made on a very limited basis.

Requesting an F&A Waiver

When an F&A exception is requested for a sponsor who does not have a published restriction, the submitting department should adequately explain and justify the request using the Office of Sponsored Programs (OSP) F&A waiver forms. The request must be attached to the RAMSeS IPF, and the request must be signed by the Principal Investigator and deans, directors, or department heads of the School, Center, or Institute. The Executive Director of OSP will consider the justification and approve/disapprove the waiver request.

Related Requirements

• Research Administration Glossary at Carolina
• 2 CFR 200 Subpart E - Cost Principles
• 2 CFR §200.414 - Indirect (F&A) Costs

Unit Policies, Standards, & Procedures

• OSP Operating Standard 300.06 - Direct Costs
• OSP Operating Standard 300.07 - Direct Costs, Personnel

Contact Information

For questions regarding this operating standard and its related procedure, please contact SponsoredPrograms@unc.edu. 

For questions regarding Pre-Award management or Post-Award administration, please contact the assigned Sponsored Projects Specialist (SPS).

For invoicing, reporting and other financial matters, please contact the assigned Sponsored Projects Accountant.
OSP Staff assignments may be found in RAMSeS or on the OSP website.

History

The operating standards in the Office of Sponsored Programs Operating Standards & Procedures Manual supersede any OSP operating standards, procedures and appendices previously included in the University Business Manual, a publication of UNC-Chapel Hill’s Division of Finance.