UNIVERSITY OF VICTORIA
Policy on the Indirect costs of Research
Policy
From 1 January 2010 the University of Victoria has a new policy on recovering the indirect costs of
research (or “overheads”). When research is funded externally the university’s policy is to recover a flat
minimum rate of 25% on the value of external research funding to assist with the indirect costs of
research.
Indirect costs of research
The costs of doing research can be separated into direct costs and indirect costs. Direct costs are costs
directly related to a specific project (e.g., salaries, supplies, equipment, travel). Indirect costs are
institutional costs incurred by universities relating generally to research, such as:
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faculty salaries;
the operation and maintenance of research facilities and equipment (e.g., laboratories,
libraries);
administrative processes that support research (e.g., accounting, HR, purchasing, assistance with
funding applications);
the management of intellectual property including commercialization; and
regulation and safety compliance (e.g., human ethics, animal care, environmental assessment).
In a 2009 review, the Association of Universities and Colleges estimated that the indirect costs of
research are approximately 40-60% of the direct costs of research. As a non-profit public institution that
operates on a cost-recovery basis, the university needs to maximize the recovery of indirect costs to
maintain the infrastructure necessary to support externally funded research projects. In the ordinary
course the indirect costs would be incorporated into each line item in a budget, but these costs can,
upon request, or to meet the requirements of the funder, be identified as a separate line item.
Types of research projects covered by the policy
The policy applies to research projects supported by external funds when university resources are used
in the project, and where the funding is coming to the university (rather than directly to the researcher
as a private consulting contract or fellowship/scholarship). University resources include university
infrastructure, personnel (faculty, staff, students), and support services. The policy applies regardless of
the form of the research funding agreement (grant, services contract, contribution agreement, MOU,
etc.).
Negotiated or Approved Indirect Cost Rate
The only exceptions to the flat minimum rate for the indirect costs of research are Tri-Council grants,
where the university already receives compensation for the indirect costs of research from the federal
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government, and alternate standing rates that are established for certain organizations and programs.
These standing rates are considered and approved by the university through the Director for the Office
of Research Services on behalf of the Vice-President Research. Normally standing rates will be consistent
with those provided to other research universities and organizations. To qualify for an alternate standing
rate the funder must be a:
 non-profit organization
 government agency
 university or other public post-secondary institution
 charitable foundation
In order for the university to agree to a standing rate the funder must provide evidence that the rate
proposed is a bona fide established indirect costs rate that the funder consistently applies to all
universities (or, in the case of non-Canadian funders, to all non-domestic universities). Such evidence
might be the statute, regulation or program terms published by the funder. Alternatively, written
confirmation from the funder may suffice provided such communication identifies the indirect rate and
the funder agrees to certify that the rate is a bona fide rate established by the funder and consistently
applied to all universities (or, in the case of non-Canadian funders, to all non-domestic universities).
For assistance
For more information please read the university’s policy on the Indirect Costs of Research and
associated Procedures for the Approval of External Research Funding Agreements which can be found
online at http://www.uvic.ca/shared/shared_usec/docs/policies/FM5400_3930_.pdf. You can also
contact the university’s Research Contracts area, for information and advice at contract@uvic.ca, tel.
250-472-5670.
Howard Brunt
Vice-President Research
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