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REG - 50.03.12 - Indirect Costs Distribution Regulation

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Authority: Chancellor
Responsible Office Sponsored Research and Programs
History: Effective: August 24, 2017
Related Links:
Contact: Sponsored Research and Programs, 919-530-7333

1.         Purpose

The growth in the University's research productivity, along with the expansion of graduate programs, necessitates a policy for allocation of facility and administrative (F&A) overhead receipts. Thus, to further encourage and reward Principal Investigators, Co-Investigators, Project Directors, Departments, Centers/Institutes, and Schools/Colleges and Administrative Units, the university will track the contributions of all investigators that contribute significantly to completion of sponsored programs. The contributions of all significant investigators shall be used to determine allocation of overhead receipts. Use of these overhead funds must relate directly to stimulating increases in sponsored programs and must be consistent with the expenditure rules and regulations of the State Budget Manual.

2.         Scope

This policy is intended to provide for a systematic and equitable set of procedures to allocate overhead receipts to Principal Investigators/Project Directors, Co-Investigators, Centers/Institutes, Departments, Schools/Colleges and Administrative Units as a financial incentive for increased research productivity and increased multidisciplinary and interdisciplinary collaboration. The allocation will be based on total receipts for the prior fiscal year (July l - June 30). A total of seventy percent (70%) of F&A overhead receipts shall be reserved for operation of administrative units that support sponsored programs. The remaining 30% will be allocated to all eligible entities. 

3.         General Principles

3.1       Allowable Charge of Indirect Costs

The account codes within the Chart of Accounts that serve as the basis for charging indirect cost within a sponsored activity are outlined in REG 50.03.12 Allowable Costs to be charged to Indirect Costs on Sponsored Projects.

3.2       Eligible Entities

Indirect Cost Receipts will be allocated to any Principal Investigator (PI), Co-Investigator (CI) and/or their respective affiliated Department, Center/Institute, School/College, and Administrative Unit for projects that generated funds into the Indirect Cost Receipts Budget.

4.         Distribution of Indirect Costs Receipts

4.1.      Seventy percent (70%) will be allocated to administrative units as designated by the Associate Provost/Dean for Research and Sponsored Programs.  Within that allocation, pre-award allocation of a minimum of $100,000 will be used to help bridge funding gaps for projects that are between project continuation (renewal) and award notification.  Pre-award allocation is to be administered by the Associate Provost/Dean for Research and Sponsored Programs.

4.2.  The remaining funds will be allocated to PIs, CIs, Colleges/Schools, Departments, and Administrative Units, with Financial Aid and Human Resources receiving a minimum of $10,000 each as part of the allocation annually. The total distribution amount will equal thirty percent (30%) and is hereafter referred to as the trust funds. The Associate Provost/Deans for Research and Sponsored Programs and the Office of Sponsored Research and Programs is responsible for monitoring this allocation.

5.         Availability of Funds

5.1       Indirect Cost Receipts allocated to units/individuals will be available from July 1 through June 30 of the fiscal year in which the allocation is made.  The Chancellor is responsible for determining if unspent funds will be reallocated to those units/individuals in the subsequent year.

5.2       Cost overruns associated with expenditures in the fiscal year in which the allocation is made will be deducted from the next year’s allocation to the unit/individual at the beginning of the fiscal year.

6.         Allowable Expenditures on Indirect Costs Funds

Allowable expenditure of Indirect Cost funds by units/individuals receiving an allocation will be governed by the policies and procedures of the Office of State Budget, General Administration and the University.

7.           Criteria for Sharing F&A For Collaborative Research

7.1       When personnel from various units make a substantial scholarly contribution to a funded project, those investigators and their academic units shall be rewarded with F&A funding reflective of their effort.

7.2       At the time of proposal submission, the PIs and CIs will determine the level of their participation that aligns closely with the expected 10% or greater effort in RAMSeS. The total percentage effort of PIs and CIs must be equal to 100%.

7.3       In cases where the participants or scope change substantially between proposal submittal and award the listed PIs and CIs and their level of effort shall be updated to match the planned productivity. Similarly, substantial changes during the execution of sponsored programs shall result in updates to the roster of investigators and their levels of effort.

7.4   Each PI and CI will receive a percentage of allocated F&A using a distribution formula giving 60% to the PI and 40% to the CI. For example, if the F&A Generates $10,000, the PI would receive $6,000, and the CI would receive $4,000.