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For any questions please send e-mail to: NDSU.Policy.Manual@ndsu.edu

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SECTION 813: FACILITIES and ADMINISTRATIVE COSTS

SOURCE: NDSU President

1. The University has established indirect cost rates with the cognizant federal audit agency. The rate charged to a sponsored agreement depends upon the function of the work performed. Before deciding which rate applies to each program, carefully review the definitions of research, instruction, and other sponsored activity as defined below.

   1.1

   ORGANIZED RESEARCH. Organized Research means the critical and exhaustive investigation or experimentation having for its aim the discovery of new facts and their correct interpretation; the revision of accepted conclusions, theories, or laws, in light of newly discovered facts; or the practical applications of such new or revised conclusions. This category includes all activities specifically organized to produce research outcomes, whether commissioned by an external agency or separately budgeted by the institution. It also includes activities involving the training of individuals in research techniques.

   1.2

   INSTRUCTION. Instruction means the teaching and training activities of an institution. Except for research training, this term includes all teaching and training activities, whether they are offered for credits toward a degree or certificate or on a non-credit basis, and whether they are offered through a regular academic session, summer school division, an extension division, or a continuing education division.

   1.3

   OTHER SPONSORED ACTIVITY. Other sponsored activities means programs and projects financed by federal and non-federal agencies and organizations which involve the performance of work other than instruction and organized research. Examples of such programs and projects are health service projects, and community service programs.

2. The current approved indirect cost rates are as follows:

   FROM	TO	RATE	LOCATIONS	APPLICABLE TO
   7/1/04	6/30/05	41.5%	On-campus	Organized Research
   7/1/04	6/30/05	26.0%	Off-campus	Organized Research
   7/1/05	6/30/07	42.5%	On-campus	Organized Research
   7/1/05	6/30/07	26.0%	Off-campus	Organized Research
   7/1/04	6/30/07	49.4%	On-campus	Instruction
   7/1/04	6/30/07	26.0%	Off-campus	Instruction
   7/1/04	6/30/07	20.3%	On-campus	Other Sponsored Activity
   7/1/04	6/30/07	16.4%	Off-campus	Other Sponsored Activity

   Indirect cost is calculated as follows:

   Indirect Cost = (Total Direct Cost minus Equipment in excess of $5,000 minus Subcontract Payments Exceeding $25,000.) x Rate above.

3. In most cases the activities of the University will be considered to be on-campus activities. Off-campus rates for indirect cost will be used only if the project will be conducted in a remote location for an extended period of time. A project that would qualify for off-campus rates would be one that would not be using University facilities for any of the work performed, including the administration of the project.

4. If the indirect cost rate assigned to a particular project is scheduled to change during the life of the project, the budget should include that change in rate when the proposal is submitted. The base should be split in proportion to the number of months that each rate is in effect. This applies to all agencies allowing for indirect cost.

5. Unless specifically prohibited by the Sponsoring Agency, the inclusion of indirect costs is required in every grant and contract budget. If a proposal is submitted without the inclusion of indirect cost, the Office of Sponsored Programs Administration reserves the right to renegotiate the agreement for the inclusion of indirect cost, either by an increase in the award amount or by reallocating the award amount to cover both direct and indirect costs.

6. INDIRECT COST ALLOCATIONS. In order to provide an additional incentive for faculty and staff participation in sponsored activities at NDSU, it shall be the University's policy to directly support such activity with a portion of the indirect cost payments received by the University under all sponsored agreements.

   Allocation of the indirect cost collected by the University will be completed at the end of each fiscal year. Final calculations and allocations should be received no later than August 31st of any given year.

   6.1

   Of the indirect costs 42.0% will be allocated back to the generating colleges or units; 16% will be allocated back to Research Administration; and 42.0% to the Office of the President.

HISTORY: July 1990; Amended April 1992; December 1996; August 1997; January 2000, October 2004, August 2007.