Many new grant writers lack understanding of indirect and direct costs. Please read this section carefully. Indirect costs–also known as Facilities & Administrative (F&A) costs or IDC are the costs associated with university operations as part of university infrastructure. These are real costs that are not readily assignable to one particular project. IDC include facilities charges such as electricity, sewer, water, maintenance, support staff, equipment and other services. The University is entitled to indirect costs as the recipient of a grant as it usually provides the venue for the sponsored project as well as proper oversight. Marian University indirect cost rates for federal grants are determined by agreement with the federal government and the University. IDC rates are also applicable to non-federally funded projects. Currently, IDC rates are as follows:
- 8% for Educational programs, TRiO
- 35% for Research (e.g. NSF, NIH)
- 25% for non-federal sponsored projects
PLEASE NOTE THAT THESE RATES ARE SUBJECT TO NEGOTIATION AND MAY CHANGE YEAR TO YEAR. BE SURE TO CONTACT THE ORSP FOR UPDATES.
Direct costs (DC) are tangible costs associated with the sponsored project. The RFP will provide guidelines regarding which items listed below can qualify as DC. Whenever the following items meet the definition of an allowable cost under Section 200.403 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200) (link is external), you may treat them as direct costs to your sponsored project:
- Consumable supplies
- Telephone toll charges and other project-specific communication costs
- Laboratory animals
- Animal care
- Specialized shop services
Your RFP narrative must justify each and every consumable item. Each and every item that constitutes a direct cost must be used only for the awarded project and not for other purposes. Furthermore, if you include a supply that is not justifiable in your grant narrative you risk losing the funding opportunity. Furthermore, a consumable item is used completely in the course of the project. Consumable items may include laboratory supplies and materials, paper, ink cartridges, etc. If such items are purchased to support multiple activities outside of the sponsored project they are considered office supplies and cannot be charged directly to federal funds. Such items would include University stationary, pens, tablets, file folders, staples, paper clips, and so forth. Marian University defines non-equipment consumables as items which cost less than $1,000. The federal government defines equipment as items which cost over $5,000. In determining whether or not your item is "equipment" the University policy trumps the federal government.
Telephone line charges
The grantee can charge these costs to federal funds only where the line can be shown to be completely dedicated to the awarded project. Telephone line charges to interrelated projects must be pro-rated.
If the RFP allows for postage, then mailing and courier services, can be budgeted as a DC
Some grants allow computer costs to qualify as DC; others do not. Generally, hardware, software, supporting technology services, and other related costs that enable University personnel to share software or data or to communicate electronically with other individuals, are considered to be part of the physical infrastructure of the University. This is why the University is entitled to IDC. All Operation and Maintenance (O&M) expenses are considered to be indirect costs.
If specialized software and hardware are required for the awarded project they may be able to be justified as DC.
All PIs are encouraged to contact their Program Officer when in doubt.
Equipment and Furniture
Most grants exclude acquisition of equipment and furniture from allowed costs. Exceptions are allowed depending on the grant agency. Once again, all PIs are encouraged to contact their Program Officer when in doubt.
Marian Gives Back-IDC Returned to Program,
School and PI
The University recognizes that
obtaining funding for research and sponsored programs is no easy task and that
some essential costs cannot be covered in the budget. For this reason a portion of the IDC will be
returned to the PI for discretionary use.
Please review the distribution of IDC in the pie-chart depicted below: