APPENDIX TO POLICY
Scenarios for Allocating Indirect Cost Recovery (ICR) Funds
ICR sharing is required when researchers from different colleges collaborate on an externally-sponsored project.
- Although this policy does not apply to sharing ICR between departments in the same college and how to accomplish that task is the prerogative of the collegiate dean, the scenarios below provide ideas for allocating ICR to individual units.
- Reaching agreement on how to equitably divide the ICR can take time and consideration of differing perspectives. To the extent possible, it is preferable to discuss allocation and reach agreement prior to the proposal submission.
- Presently there are two ways that the agreement can direct Sponsored Projects Administration to handle ICR distribution. One way is for grant administrators to set up separate accounts in the different colleges involved. In the other method, they set up ICR in one of the accounts and the college that receives the funds distributes them according to the agreement it has with the other colleges. Although the distributions do not need to be decided prior to submitting the PRF, the method for handing it must be chosen.
Scenario 1: Researchers from two colleges have conducted multiple projects together over many years. Data collected by the colleges over the past years indicates ICR that each college receives balances out in the long run.
Possible allocation method: ICR for each project could be divided according to the effort of the individual PIs who collaborated on the project. It would be awarded to their college regardless of the support provided by the other college.
Reason: Because ICR will balance out in the long run, it makes sense not to split it out for each project.
Scenario 2: Two researchers from different colleges are working on a five-year project putting in equal amounts of time in the long run. Each college is providing approximately equal support although the amount differs from time to time.
Possible allocation method: ICR could be split equally between the colleges even though the exact amount of researcher effort provided by each college each year might differ.
Reason: The revenue will balance out over the five years.
Scenario 3: Two researchers from different colleges are collaborating on a project that involves a product. One researcher is leading focus groups about the product and the other researcher is conducting a chemical analysis of the product. The college for the researcher with the focus groups is providing office space and conference rooms for the groups. The other college is providing laboratory space, office space and personnel appointments, etc. for the chemical analysis.
Possible allocation method: Each unit could have its own separate budget with ICR streams associated with that budget.
Reason: Because it is easy to separate the different types of costs, it is relatively easy to allocate the ICR.
Scenario 4: Researchers from a number of colleges are working on a joint project. The project is housed in a center which provides administrative support, space, personnel appointments, etc.
Possible allocation method:The ICR associated with each of the researchers’ salaries on the grant could be returned to their colleges. The balance of the ICR would go to the center.
Reason: Because the departments are still incurring costs of an ongoing nature (personnel, technical, and administrative) to support the absent researchers and they need to replace the immediate teaching contribution of these individuals, it is fair to reimburse them for these costs. In addition, if the colleges do not receive this ICR support, they may not be willing in the future to share the expertise of their faculty and staff on other intercollegiate projects. The center is included as an independent unit to ensure that the contributions made by the center (personnel, space, or equipment) are acknowledged.
Scenario 5: Numerous researchers from different colleges are conducting a project. Most of the direct funds support their salaries and other types of expenditures are minimal.
Possible allocation method: Separate accounts could be set up to allow ICR to follow the direct expenses, primarily salaries. Each faculty member's own budget must be spent appropriately.
Reason: Because it is relatively easy to split ICR fairly according to salaries, ICR is credited to the collegiate unit and this will allow appropriate return of the funds.
Scenario 6: Numerous researchers are individually conducting parts of a research project but the project also requires extensive collaborative work. Each college is providing some space for the researchers from their college but one college is also providing space and personnel appointments for the project overall. Another college is providing access to specialized equipment and observation rooms (not covered in direct costs).
Possible allocation method: ICR could be allocated by calculating the total cost of the project and returning the percent of the total support being provided by each college to that college. For example, one college might get 10% of the ICR while another got 30%.
Reason: The total costs of the project are not covered by ICR and some colleges are paying these uncovered costs while others aren’t. It is fair to calculate all of the costs and allocate ICR according to the percent of total support.
Scenario 7: Researchers from different colleges are collaborating on a project. Most of the direct funds support salaries in separate colleges, but the project is reliant upon the use of equipment that is housed and maintained by one of the colleges involved.
Possible allocation method: The cost of the use of the equipment is calculated by averaging actual operational and acquisition cost of the equipment, using the percentage established in the development of the University's negotiated F&A rate; or developing another way of estimating cost that is acceptable to the units involved. The expected ICR is divided so that this cost is recovered by the unit providing the equipment.
Reason: Because one college has an additional expense for the project, this college should be reimbursed appropriately.
Scenario 8: Researchers from different colleges are collaborating on a project that primarily supports salaries. However general administrative services are provided by one department or center and these the costs cannot be captured through direct charge to the sponsored account.
Possible allocation method: Calculate these administrative costs by figuring the actual administrative costs, using the percentage established in the development of the University's negotiated F&A rate; or developing another way of estimating cost that is acceptable to the units involved. Divide the expected ICR so that this cost is recovered by the unit providing the administrative services.
Reason: This situation is similar to the shared use of equipment: consideration and ICR should be given to the unit providing a disproportionate share (relative to direct expenses) of the administrative support.