Indirect Costs (F&A) Policy
The 91ÆÆ½â°æâ€™s policy is to apply the University's negotiated indirect
(Facilities & Administrative, or F&A) cost rate to all externally-sponsored projects.
The 91ÆÆ½â°æ sets indirect (F&A) cost rates with the federal government
based on formulas and negotiation processes set forth in the .
An explanation of rate and the current negotiated FA rates can be found here.
Roles and Responsibilities
The fiscal management of sponsored projects, including the application of appropriate indirect (F&A) cost rates in proposed project budgets and management of awarded projects within budget and funding limitations, is the responsibility of the Principal Investigator. The PI is not authorized to negotiate a reduction or waiver of indirect (F&A) costs with the sponsor on any sponsored project. The Principal Investigator shall work with their Research Administrator to submit fully loaded budgets that include both the direct and indirect (F&A) cost of performing research at the 91ÆÆ½â°æ.
Reductions and Waivers
Indirect Cost (IDC) also known as Facilities & Administrative or F&A rates are not generally waived nor reduced at the 91ÆÆ½â°æ (). However, there are exceptions where an IDC reduction or waiver are considered, provided it meets one of the pre-approved exceptions below.
Pre-Approved Exceptions
The following exceptions do not require additional documentation to accept IDC reduction:
- Salary Reimbursement Agreements - Payments to students between partnering institutions that allow a student or post-doctoral
fellow from one university to work at another university will not be assessed IDC,
provided that the award instrument used is a Salary Reimbursement Agreement (SRA)
and not a sub-award agreement. When a sub-award agreement, in which the prime agency's
terms and conditions are passed down to , is used for student's salary reimbursement,
the other university must honor the IDC rate or offer the rate given to them by
their sponsor.
- Required by Non-Profit Sponsor - IDC reductions or waivers required by the sponsor as a condition of obtaining an award (mandatory cost sharing) will be approved without additional justification or exception. The cost-sharing commitment must be included in the proposal to be considered by the sponsor.
- Non-Profit Institutions - The 91ÆÆ½â°æ recognizes that many non-profit institutions have their
own policies regarding the use of their funds for overhead expenses. In the case where
the non-profit has an official written and publicly disclosed policy in this regard
that is applied on a consistent basis, or where a public solicitation for proposals
defines a limit on indirect (F&A) cost recovery as a condition of the program, the
91ÆÆ½â°æ will normally accept these requirements. If it is not a public
policy available on the web, a project specific waiver will need to be requested.
- Consortia - Consortiums (SPCs), commonly known as Industrial Affiliates Programs, have received a reduced IDC (F&A) rate of 20% applied to their sponsored projects. This exception will continue.
Note: In cases where the 91ÆÆ½â°æâ€™s agreement to accept a lower indirect (F&A) rate is based on our understanding of the sponsor’s policy, and where the University of Houston becomes aware of a higher indirect (F&A) cost rate paid by that sponsor to another recipient, the university reserves the right to apply the higher rate to that sponsor’s 91ÆÆ½â°æ projects.