PURPOSE

The purpose of this statement is to provide guidelines for the budgeting and application of indirect costs.

Definition: Indirect costs are those costs that are incurred by the University which are not readily assignable to a contract or grant. These are cost such as building and equipment use charges, utilities, general administration, sponsored programs administration and departmental administration.

GENERAL GUIDELINES/APPLICABLE POLICIES

The requirements for including indirect costs on each contract, grant, or agreement and the application thereof is provided by the Office of State Budget and Management. A full or partial waiver of indirect costs can only be made when either of the two following circumstances exists and can be demonstrated in writing:

1. Statutory or administrative restrictions prohibit indirect costs claims.

2. Extraordinary circumstances exist which may jeopardize the State's best interest.

PROCEDURES

All indirect costs awarded to the University will be budgeted and charged to each contract, grant and agreement. The Office of Contracts and Grants will not charge indirect costs in an amount that exceeds the budget unless there are excess direct costs funds available and approval of the awarding agency has been obtained. Further, indirect costs funds may not be used for direct costs unless such funds are available and approval has been given by the awarding agency.