Facilities and Administrative Costs
These costs are also known as overhead or indirect costs. The facilities and administrative (F&A) rate is automatically generated when an expense is charged to a sponsored index. To see the F&A rate charged to your index, refer to the monthly summary statement (FYROR501B). You will see “Indir Cost Rate” on the upper right side.
The rate charged to your index is the lower of either the effective rate at the time of the proposal or the current rate. The university is required to negotiate this rate with the federal government at least every three years. You can review the F&A rates for FY 2007-09.
Cost share is the portion of total project costs that are paid from sources other than the sponsor. Cost share is either dictated by the sponsor in the proposal solicitation (mandatory cost share) or is a voluntary contribution shown to the sponsor in the proposal budget. Once the cost share is shown to the sponsor in a proposal budget, Michigan Tech is obligated to identify and track the cost share expenditures.
Here are the university’s practice for cost share on sponsored projects as well as the sources for cost share. (top)
Principal investigators are responsible for overseeing the proper close-out of sponsored projects, including timely submission of all required reports. The normal close-out period is 90 days, except for federal pass-through projects, which vary from 30 to 60 days.
For projects with a positive balance that are not Fixed Price agreements, the PI is responsible must tell the Research Accounting office what to do with the funds. If no specific advice has been received within 90 days, the project budget will be reduced and the sponsor will not be billed in full, or funds will be returned to the sponsor.
Fixed Price Agreements are based on the best estimate of the funds needed to complete a project. In some cases, a small residual balance may remain at the end of the project. At the time the project is to be closed, the PI may retain a portion of the balance. The indirect cost portion must be transferred to the central indirect cost index and the remainder can be transferred to PI’s incentive index. This is accomplished by the preparation of the Request for Modification form, stating that all deliverables have been met and signed by the PI and department chair/director.
The Research and Sponsored Programs will forward the completed Request for Modification form to Research Accounting, where staff members will verify that the university has been paid in full and the transfer will be made. If the university has not been paid in full the transfer will not be made and the PI will be notified.
Projects with a deficit also need to be closed on a timely basis. See Expenditures Exceeding the Award Amount. (top)
Incentive Accounts – MTU research incentive funds are general funds allocated to deans, chairs, center/institute directors, and researchers to provide resources to colleges, schools, departments, centers/institutes, and researchers for use in enhancing research and graduate studies. The amounts allocated are calculated from Facilities and Administrative reimbursements collected from sponsored research in the respective units or by the respective researchers. Please become familiar with the allowable and unallowable expenses.
Research Excellence Funds are awarded on a competitive basis. See details on the Vice President for Research Internal Awards (REF) .
Faculty
Scholarship Grants are awarded on
a competitive basis. See details on the Vice President
for Research Internal
Awards (FSG). (top)
Guidelines for Expenditures of Research Incentive
Funds
MTU research incentive funds are general funds allocated to
Deans, Chairs, Center/Institute Directors, and researchers
to provide resources to Colleges, Schools, Departments, Centers/Institutes,
and researchers for use in enhancing research and graduate
studies. The amounts allocated are calculated from Facilities
and Administrative (F&A) reimbursements collected from
sponsored research in the respective units or by the respective
researchers.
Allowable Expenses must enhance research and graduate studies
and include, but are not limited to, the following:
- Advertising for recruitment of research personnel, including graduate students;
- Business meals;
- Equipment used primarily or exclusively for research;
- Materials (supplies, purchased materials, and fabricated parts);
- Postage;
- Professional services (consultant and speaker fees);
- Proposal preparation costs;
- Salaries, wages and fringes for faculty, students, technical support staff, administrative staff, and clerical staff other than the account custodian;
- Salaries, wages, and fringes for the account custodian are only allowable if approved by department chair, college/school dean, and provost. Academic year salaries, wages, and fringes for any tenured or tenure-track faculty must be approved by the department chair, college/school dean, and provost.
- Travel costs related to research or graduate student activity.
Unallowable Expenses include, but are not limited to, the following:
- Alcoholic beverages;
- Alumni/development activity;
- Donations and contributions;
- Entertainment (other than allowed business meals);
- Fines and penalties;
- Goods or services for personal use;
- Lobbying;
- Memberships in civic or community organizations, country clubs, or social/dining clubs;
- Personal travel costs.