Policy Relating to the Distribution of Indirect Costs Recovered
Through External Grant Awards
Effective: February 7, 2003
Amended: May 7, 2004 , January 7, 2005, May 22, 2006, September 2010, and September 2011
Section I: Purpose
This policy codifies the distribution of indirect costs recovered in connection with external grants awarded to the University
of St. Thomas on behalf of faculty and staff certified as qualified to serve as principal investigators. In so doing, it strives to
import a coherent and transparent allocation process that fosters rational, accountable, and well-informed institutional
investments into projects and infrastructure that significantly enhance research and scholarship pursued at the University.
Section II: Definitions
Costs incurred by the University relating to externally-funded projects can be understood as “direct costs” or as “indirect
costs.”
“Direct costs” are those costs that can be linked directly to a particular sponsored project with a high degree of accuracy.
Direct costs must be reasonable in the context of the sponsored project and clearly allocable to that project.
“Total direct costs” is the sum of all direct costs relating to a sponsored project.
“Total modified direct costs” is the sum of all direct costs relating to a sponsored project minus the following: equipment,
capital expenditures, tuition remission, rental costs, scholarships and fellowships, and the cost of each subgrant in excess
of the first $25,000.
“Indirect Cost Recovery” (ICR) or “Facilities and Administrative” (F & A) costs, are costs incurred by the University for
common or joint projects and cannot be specifically attributed to an individual project. Some examples of indirect costs
include accounting staff, the maintenance of physical facilities, building depreciation, libraries, operations, affirmative action
monitoring, animal and subjects protection, computer infrastructure, custodial services, environmental health and safety,
employee benefits, purchasing services, and security services.
Section III: Charging Indirect Costs
Indirect costs are recovered from the funding agency—when allowed—in recognition of the real and unallocable costs
incurred by the University when it hosts a sponsored activity. Typically, indirect costs are charged at a flat rate against total
modified direct costs anticipated in connection with the sponsored activity. The default rate is negotiated between the
University and a cognizant federal agency every 3 to 5 years, and the University of St. Thomas’ current indirect cost rate is
41% of total modified direct costs (expiring June 30, 2017). This rate applies to all federal grant programs and many state
programs as well.
Some funding agencies allow complete recovery of indirect costs on a program-to-program basis, while others publish a
hard cap on the rate at which institutions are allowed to capture these costs. Still others forbid the collection of any indirect
costs at all.
Section IV: Rationale
There are no federal or state restrictions on how recovered indirect costs can be used by the receiving university. These
funds need not be allocated in the same categories and proportions used in determining the institutional ICR rate.
Accordingly, the University of St. Thomas has complete latitude to determine how these funds are distributed.
This policy redirects the allocation of indirect costs captured in connection with externally-funded grants in ways that 1)
enhance institutional support for research and scholarship; 2) increase faculty competitiveness in statewide and national
grant competitions; 3) magnify the impact of current internal and external investments in faculty-driven research and
scholarship; 4) provide direct and significant incentive for faculty, academic departments, and collegiate units to invest in
faculty research and scholarship; and, 5) enhance the national profile of the University of St. Thomas.
Section V: Policy
Subsection 1. Distribution of Recovered Indirect Costs. Effective February 7, 2003, in cases where the funding agency
commits funds for ICR and there is no commitment of matching cash from the University of St. Thomas (see below, Section
V, Subsection 4), captured funds will be distributed as follows:
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Please note: This distribution matrix has been replaced as described in Amendment VI below.
Receiving Unit
Allocation
General Operating Fund
50%
Principal Investigator’s
Dean
30%
Notes
In recognition of the unallocable costs incurred by the University of St. Thomas in
connection with externally-funded grant initiatives.
In order to provide resources necessary to strengthen the research enterprise pursued
within the dean’s area of responsibility.
Principal Investigator’s
Chair
10%
In order to provide resources necessary to strengthen research undertaken by faculty
in the principal investigator’s department.
Grants and Research Office
10%
In order to create additional resources for allocation to faculty seeking external
support for institution-building grants.
Subsection 2. Co-Principal Investigators. In the case of a sponsored project that has one or more co-principal
investigators, the distribution of recovered indirect costs will be directed to the dean and departmental chair of the principal
investigator of record only.
Subsection 3. Disbursement of Funds. Units scheduled to receive disbursements of indirect cost recovery will receive
their funds in the same fiscal year as the funds are recovered from the external grant according to procedures established
by the University of St. Thomas’ Controller’s Office.
Subsection 4. Cash Matches. In cases where the University commits any cash match to a sponsored project, 100% of
indirect costs captured by the University from the funding agency shall be allocated to the General Fund.
Section VI: Amendments
Amendment I (effective May 7, 2004). Non-Compliance. Should a faculty member submit a grant proposal to an external
funding agency without obtaining the necessary signatures on the internal Proposal Routing Form prior to submission, the
distribution of ICR will be as follows:
Receiving Unit
Allocation
General Operating Fund
75%
Principal Investigator’s Dean
0%
Principal Investigator’s Chair
0%
Principal Investigator’s Incentive Account
0%
Grants and Research Office
25%
Please note: This distribution matrix has been replaced as described in Amendment VI below.
Amendment II (effective January 7, 2005). Change in Distribution of ICR. In an effort to encourage external
grantseeking and to provide additional opportunities for faculty and staff to pursue professional development and research
that will enhance their competitiveness in future grant competitions, the distribution of ICR will be changed as per the
following table:
Receiving Unit
Allocation
General Operating Fund
50%
Principal Investigator’s
Dean
30%
Notes
In recognition of the unallocable costs incurred by the University of St. Thomas in
connection with externally-funded grant initiatives.
In order to provide resources necessary to strengthen the research enterprise pursued
within the dean’s area of responsibility.
Principal Investigator’s
Chair
5%
In order to provide resources necessary to strengthen research undertaken by faculty
in the principal investigator’s department.
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Deposited into a “Principal Investigator’s Incentive Fund” to be used at the discretion
of the principal investigator for professional development and research expenses.
Principal Investigator’s
Incentive Account
5%
Grants and Research Office
10%
In order to create additional resources for allocation to faculty seeking external
support for institution-building grants.
Use of the Principal Investigator’s Incentive Fund is subject to administrative policies established by the Grants and
Research Office in collaboration with Academic Affairs and the Controller’s Office.
Amendment III (effective May 15, 2006). Compliance with Internal FGO Deadlines. In the event that a principal
investigator does not meet the requirements of the policy on Internal Deadlines for the Submission of Grant and Contract
Proposals, the distribution of ICR will be changed as per the following table:
Receiving Unit
Allocation
General Operating Fund
50%
Principal Investigator’s Dean
0%
Principal Investigator’s Chair
0%
Principal Investigator’s Incentive Account
0%
Grants and Research Office
10%
Academic Affairs
40%
Please note: This distribution matrix has been replaced as described in Amendment VI below.
Amendment IV (effective September 9, 2010). Change in Distribution of ICR. In an effort to enhance the research
environment at UST, the distribution of ICR will be changed in the following ways. This amendment replaces all previous
distribution matrices.
Receiving Unit
Allocation
General Operating Fund
50%
Grants and Research Office
20%
Deans
20%
Institutional Review Board
10%
Compliance with Internal GRO Deadlines. In the event that a principal investigator does not meet the requirements of
the policy on Internal Deadlines for the Submission of Grant and Contract Proposals, the distribution of ICR will be changed
as per the following table. This amendment replaces all previous distribution matrices relating to non-compliance.
Receiving Unit
Allocation
General Operating Fund
50%
Grants and Research Office
40%
Deans
0%
Institutional Review Board
10%
Amendment V. (effective September 9, 2010). Revocation of Section V, Subsection 4. Indirect cost recovery will be
distributed as iterated below in Amendment VI even in cases where the University contributes a cash match to a proposed
sponsored project. This amendment negates the terms of Section 5.,Subsection IV above.
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Amendment VI. (effective September 1, 2011). Change in Distribution of ICR. In an effort to enhance the research
environment at UST, the distribution of ICR will be changed in the following ways. This amendment replaces all previous
distribution matrices.
Receiving Unit
Allocation
General Operating Fund
50%
Grants and Research Office
30%
Deans
20%
Compliance with Internal GRO Deadlines. In the event that a principal investigator does not meet the requirements of
the policy on Internal Deadlines for the Submission of Grant and Contract Proposals, the distribution of ICR will be changed
as per the following table. This amendment replaces all previous distribution matrices relating to non-compliance.
Receiving Unit
Allocation
General Operating Fund
50%
Grants and Research Office
50%
Deans
0%
4