Indirect costs, aka facilities and administration costs, are provided by funding agencies to cover the additional expenses that an institution incurs while preparing and entering into a funding agreement. The rates are determined by the Federal Government based upon their review of an institution’s financial statements. Bradley University’s established indirect cost rate is 55% salary and wages. This rate MUST be applied in all proposals and awards where eligible. There are a few agencies which do not allow any indirect costs to be included in a funding request. Because indirect cost payments are literally reimbursement for expenditures already made by the University, such payments should not be considered undesignated income available for discretionary allocation. Any proposal that deviates from Bradley’s indirect cost rate must be approved by the Provost and Vice President for Academic Affairs and the Controller.
The following categories comprise the indirect costs:
- General administration and general expense: accounting, payroll, administrative offices, etc.
- Research administration: personnel and other costs of offices whose responsibility is the administration of research.
- Plant operation and maintenance: utilities, janitorial services, routine maintenance and repairs, etc.
- Library expenses: books, library staff, etc.
- Departmental administration expenses: administrative cost at the college and department level.
- Depreciation or use allowance: for buildings and equipment, excluding those paid for by the federal government.
Although Bradley’s indirect costs are assessed only on wages, many other universities’ rates are assessed on the entire project cost. Most funding agencies understand and expect that indirect costs will be included in funding requests. However, some agency guidelines specify indirect cost rates that are in exception to Bradley’s requirement for full indirect cost recovery. These include:
- Private, non-profit agencies that have a written policy of paying all their grantees a standard rate lower than the University’s negotiated rate.
- Awards from Federal or State agencies that pay all of their grantees an indirect cost rate lower than the University’s negotiated rate.