Policy: Indirect Costs to Sponsored Award
Effective Date: May 20, 2020
Overview
- SAi aims to recover from every sponsored award the full cost of the facilities and administrative infrastructure that are required to support it. The Institute recovers these indirect cost rate (IDC or overhead) costs by applying a rate not lower than 20%** to each sponsored award’s direct costs. For example, an IDC rate of 20% means that the total direct costs will be assessed the 20% overhead rate. In general, SAi attempts to recover the maximum possible indirect costs. The rate is modifiable with approval from the Institute Leadership.
The Why
- Indirect costs (or overhead) are operating costs that are needed to support the administrative infrastructure that is needed to maintain the award. These costs include human resources, security, payroll processing, accounting, online platform access, etc.
The Who
- The indirect cost application applies to all awards submitted by principal Investigators (PIs) and administrators at SAi within all divisions.
The Process
- All members are required to submit at a minimum the budget proposal (otherwise the full proposal, budget, and other relevant documents) to the Office of Sponsored Awards and Finance (OSAF) for review no less than 1 week (5 business days) before submission deadline to external agencies, organizations, and foundations. If no budget template is provided by the funder, members should use the approved SAi budget template provided by the OSAF. The budget proposal review will allow record keeping and quality control to take place. The OSAF will then provide the green light to proceed in applying for the award. Ideally, all members should engage the OSAF as soon as they commit to applying for an award.
How to Calculate
- IDC must be calculated to be included in the maximum total grant amount allowed by a funder. To determine how much project money you will have after IDC is deducted, take the total grant amount and divide by 1.X, where X = IDC rate. (e.g., a $50,000 grant proposal with a 20% IDC rate yields $41,666.66 in direct costs for the project.
** Double check the rate with the OSAF.