What are Facilities & Administrative (Indirect) Costs?

Project budgets for externally funded projects should include all costs required to accomplish the objectives in the proposal or agreement. These costs are categorized as either direct or indirect costs:

• Direct Costs are expenses that are directly and uniquely allocable to, and necessary for, the completion of a sponsored program, including, but not limited to, salaries and wages, fringe benefits, consultants, travel, equipment, supplies, and participant-support costs (2 CFR 200.413). Some direct costs – capital equipment, participant costs, and tuition – may be exempted from direct cost calculations, depending on the sponsor of the award.
• The revenue resulting from the recovery of Facility and Administration (F&A) costs, also called indirect costs (IDC), allowed on sponsored research and public service projects is recognized by the University as "unrestricted" funds. The F&A rate that determines the amount of these funds is negotiated with the Department of Health and Human Services based upon the level of research-support infrastructure MTSU provides our scholars.  MTSU's current F&A rate is 31.3% of modified total direct costs.  University guidance for investment of F&A funds holds that the funds will assist in the expansion of research and scholarly activities at MTSU.  (2 CFR 200.414)

It should be noted that budgets for sponsored projects may use indirect cost rates that are less than the federal negotiated indirect cost rate with prior approval under one or more of the following conditions: the sponsor limits or disallows the allowable indirect cost rate or the university voluntarily reduces or waives the indirect cost rate to meet cost-share requirements.

MTSU’s F&A rates are determined by an agreement with the federal government in accordance with the federal Uniform Guidance. In July 2020, MTSU negotiated its current Cost Rate Agreement (available here).

You can read more about MTSU's indirect in Policy 401, Section VI.

How are Indirect Costs distributed?

It is MTSU’s policy to distribute recovered indirect costs across University units in order to strategically maintain and expand MTSU’s competitiveness and capacity for sponsored projects. It is the intention of this policy that recovered indirect costs will be used to support further expansion of research and scholarly activities at MTSU. This practice represents a significant recurring investment by the MTSU in sponsored projects.

The following list serves as a guide to investment strategies of these allocated funds:

• Seed new research initiatives
• Provide cost sharing or matching funds on individual projects
• Support MTSU's technology commercialization efforts
• Pay salaries for research support personnel
• Develop new core facilities
• Build the University's sponsored research and public service programs
• Purchase capital equipment directly related to expanding the research capability
• Fund bridge programs to provide continuity between externally funded projects
• Provide incentives and support in preparing competitive proposals
• Distribute seed funding for interdisciplinary, multidisciplinary, or center proposals
• Provision of start-up funding for new hires
• Support research related expenditures (e.g., computers, software, travel, publication costs, training, certification, consumables)
• Reward units that are successful in attracting funds
• Support the University's efforts to increase extramural funding

The Vice Provost for Research, in consultation with the Provost, is responsible for the indirect cost recovery distribution pursuant to guidelines published by the Vice Provost for Research and available from ORSP.

How We Spend Our Indirect

 

 

Total Indirect Expenditures FY23	Percentage
Matching Funds	21%
Salaries -ORSP	17%
Salaries - GRA's for startups	33%
Salaries - Other research employees	17%
Research supplies - startups	6%
Corrections on grant closeout	6%
Total	100%

 

Cayuse Instructions

Personnel completing the Proposal Request Form in Cayuse are asked to list all members of the research team on the budget page. They are asked to identify which the department or center the team members are representing and their colleges, along with the amount of total effort they are expected to contribute to the project. These estimates will be used to equitably divide the indirect costs between the team members, their departments, centers, and colleges. See below for MTSU’s indirect distributions.

Indirect Costs Distribution

Standard Indirect Distribution
Account Description	Index #	Percentage
General Fund	221999	10
Faculty Research	222040	20
ORSP	222050	40
College	varies	10
Department	varies	10
PI (split if multiple PIs or co-PIs)	varies	10
Standard Center Distribution
General Fund	221999	10
Faculty Research	222040	15
ORSP	222050	30
College	varies	10
Center	varies	15
Department	varies	10
PI (split if multiple PIs or co-PIs)	varies	10
If no department, percentage rolls into center.