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Indirect Costs of Externally Funded Research

  

Principle:

The costs of carrying out externally funded research, whether grant or contract based, fall into two broad categories: direct costs and indirect costs (also known as research overhead). Recognizing the need for institutions to recover both the direct and indirect costs of research, the Government of Canada implemented the Indirect Costs Program to provide payment of the indirect costs of research funded by the Canadian Institutes of Health Research, the Natural Sciences and Engineering Research Council of Canada, and the Social Sciences and Humanities Research Council of Canada (collectively the Tri-Agency). Indirect costs of other externally funded research at the University are recovered through the application of indirect cost rates as outlined in this policy.

 

Purpose:

To provide a mechanism whereby the indirect costs of externally funded research are recovered from sponsors and a portion of the indirect costs are allocated to the Unit managing/overseeing the research and to a research account in the Principal Investigator’s Academic Unit. 

 

Scope:

University-wide with respect to indirect costs associated with externally funded research where the work creates intellectual property which advances the state of knowledge in the researcher’s research area. This policy does not deal with the annual allocation provided by the Tri-Agency towards the indirect costs of research.

The policy also does not apply to externally funded research carried out exclusively by faculty or staff of the Marine Institute. Where other units of the University are involved in funded research administered by the Marine Institute, this research shall be carried out in accordance with the University-wide research policies, including the Indirect Costs of Externally Funded Research policy. 

 

Definitions:

Campus Head - the executive positions responsible for each of the Marine Institute, Grenfell Campus and the Labrador Institute.

Deliverables - include the results of a research project that are explicitly defined in the Research Contract and which may include reports, papers, presentations, models, prototypes and demonstrations. Deliverables may include a license, or a first right of refusal to negotiate a license, to the intellectual property developed during the course of the contract but do not include the underlying intellectual property developed by the University’s faculty, staff, postdoctoral fellows or students.

Direct Costs - include the stipends, salaries and benefits for research personnel, including faculty, staff, postdoctoral trainees and students, materials and supplies, travel, equipment, purchase of specialized services, and subcontracts.

Indirect Costs - include, but are not limited to, building use and depreciation, utilities, equipment depreciation, physical plant and maintenance (including utilities, hazardous waste disposal, security),  insurance,  pre- and post-award research administration, financial administration (including purchasing and accounting), human resources administration, and common resources, including libraries and computing services.

Principal Investigator(s) - the researcher(s) who leads a proposal submitted by the University for external funding and who agrees to undertaking the research in accordance with the terms of the Research Contract.

Research Contract - any formal, legally enforceable agreement signed between the University and an external Organization/Sponsor which, in exchange for payment of Direct Costs and Indirect Costs, sets out a task or tasks to be completed within a specified timeframe to arrive at a research outcome which constitutes intellectual property that advances the state of knowledge in the researcher’s research area.  Deliverables are also defined under the agreement. The research must able to be published in the scholarly literature. In some instances such publication may be subject to an appropriate deferral period in which a review of proposed publications can be carried out to identify confidential or commercially sensitive information and to provide time to secure protection of such information.

Unit - centre, department, division, faculty, program, office or school as the context requires.

Unit Head - Deans, Department Heads, Division Heads, Heads of Schools, Directors, Executive Directors, University Librarian, University Registrar and other senior administrators at a comparable level; Associate Vice-Presidents and Vice-Presidents, as applicable.

University - Memorial University of Newfoundland.

 

Policy:

1) Indirect Costs must be charged on all externally funded research projects at the rate of 25% or more of total Direct Costs. 

2) The Direct and Indirect Costs associated with a faculty member’s time must be included in the contract budget.  These Direct and Indirect Costs may be considered an in-kind contribution by the University to a project only where the ownership of the work remains with the University and the faculty member and there are no restrictions on presentation or publication of the work. The Indirect Cost rate of 25% or more applies to all remaining project costs.  Approval of in-kind contributions of the Indirect Costs will only be given by the Vice-President (Research), or delegate, following consultation with the Principal Investigator and the Unit Head prior to any budget discussions with the project sponsor or submission of a proposal, whichever occurs first.

3) The Direct and Indirect Costs associated with stipends and salaries for graduate students, postdoctoral fellows and undergraduate students must be included in the contract budget. The Indirect Costs associated with student/fellow stipends may be considered an in-kind contribution by the University to a project where the ownership of their work remains with the University and the student/fellow, where the results of the research will be incorporated into a thesis, dissertation, or senior level project, and where there are no restrictions on presentation or publication of their work. In the case of postdoctoral fellows where thesis, dissertation, or senior level project does not apply, the research must be within their planned program of research and scholarly publication. The Indirect Cost rate of 25% or more applies to all remaining project costs. Approval of in-kind contributions of the Indirect Costs will only be given by the Vice-President (Research), or delegate, following consultation with the Principal Investigator and the Unit Head prior to any budget discussions with the project sponsor or submission of a proposal, whichever occurs first.

4) The distribution formula for funds received in payment of indirect costs is as follows:

Central Distribution:

a) 12.5% of Direct Costs (corresponding to 50% of the first 25% of Indirect Costs) to the Office of the Vice-President (Research).

Local Distribution where Post-Award Administration is in a Faculty/School/Campus (total Indirect Cost less the Central Distribution):

b) 30% of the remaining Indirect Costs to a research account to support an approved program of research  by the Principal Investigator(s) carrying out the research associated with the Research Contract.

c) 30% of the remaining Indirect Costs to office of the head of a centre, department, division, or equivalent that is post-award administering the Research Contract. Where no subdivision exists within a Faculty, School or Campus, this portion is distributed to the Office of the Dean/Campus Head. Where Principal Investigator(s) incur additional Indirect Costs because of the absence of services normally provided by a division, department, or centre, this portion is shared between the Office of the Dean/Campus Head and the Principal Investigator based on their approximate share of indirect costs.

d) 40% of the remaining Indirect Costs to Office of the Dean/Campus Head with responsibility for the post-award administration of the Research Contract.

In the case of research projects involving multiple faculty members or Units, the Local Distribution shall be agreed among the Principal Investigators and Units involved prior to the University negotiating a research contract.

Local Distribution where Post-Award Administration is in the Office of the Vice-President (Research) (total Indirect Cost less the Central Distribution):

e) 30% of the remaining Indirect Costs to a research account to support an approved program of research  by the Principal Investigator(s) carrying out the research associated with the Research Contract.

f) 50% of the remaining Indirect Costs to the Office of the Vice-President (Research).

g) 20% of the remaining Indirect Costs to Office of the Dean/Campus Head where the Principal Investigator(s) have academic appointments.

In the case of research projects involving multiple faculty members, the Local Distribution among the Principal Investigators shall be agreed among the Principal Investigators prior to the University negotiating a research contract.

5) It is the responsibility of all researchers to consult with the Vice-President (Research), or delegate, regarding this policy prior to planning project budgets associated with research contracts. All contract or agreement negotiations must be carried out in accordance with the Contract Administration Policy.

6) Indirect Cost rates related to specific sponsors which have been agreed to on an institutional basis will apply, and can be viewed in the Schedule of Special Indirect Cost Rate Agreements. The schedule will be amended as institutional agreements are established or expire.

7) The Vice-President (Research) reserves the right to negotiate depending upon the project circumstances, alternative Indirect Cost rates than those provided under Section 1. Alternative Indirect Costs rates must be approved by the Vice-President (Research) prior to budget discussions with the project sponsor or submission of a proposal, whichever occurs first.

8) For exceptional and compelling reasons, the Vice-President (Research) may agree to variations to this policy as may from time to time be appropriate.

 

Related Documents:

Schedule of Special Indirect Cost Rate Agreements
Contract Administration Policy
Research Contracts and Agreements Policy

 

 
Title: Indirect Costs of Externally Funded Research
Category : Research Approval Date: 2014-07-03
Effective Date : 2014-07-03 Review Date: 2018-07-03
Authority:
Vice-President (Research)
Sponsor:
Vice-President (Research)
Contact:

Office of Vice-President (Research) - 709-864-2530

Previous Versions:
Please contact the Policy Office to view any of the following previous policy versions:

  • 2005-02-01