Laura:

Here is a pedestrian view of indirect costs calculation:  the indirect cost
rate is a ratio of facilities and administrative costs to the total costs of
doing the "research business". When you provide cost sharing for a project
your contribution is part of the cost of doing research in your organization.
This cost of doing research goes into the denominator in the calculation for
the determination of your indirect cost rate. As a result, every time you
provide cost sharing you increase the denominator, which in turn decreases
your indirect cost rate.

I am sure the indirect costs gurus on this list can add more to this.

Imeh

=====================================================================
Imeh Ebong, Ph. D.
Director, Division of Research Development
960 Renaissance Park
Northeastern University
Booston, MA 02115-5000

Tel: (617) 373-8770
Fax: (617) 373-8866
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I noticed in last week's discussion about FIPSE F&A rates that a number of
colleges and universities indicated that they had used the DoEd suggested
rate of 8% of TDC and showed as part of their cost share the difference
between this figure and the amount they would have recovered for F&A had
they used their federally-negotiated rate.

In several NCURA-sponsored workshops I've attended over the past six
months, however, I have heard several times that doing this will ultimately
bring down an institution's F&A rate.

I'm curious as to whether other institutions have any policies regarding
this issue and how frequently this practice is used when cost sharing is
required and F&A cost restriction are required or strongly encouraged.

And could someone who understands better than I do the issues surrounding
the negotiation of indirect rates explain (again) to me why it might be a
bad idea to do this?

Thanks.
Laura C. Hartley, Ph.D.
Grants Officer/Staff Writer
Office of the Provost
Lesley College
29 Everett Street
Cambridge, MA 02138-2790
Phone: 617-349-8795
Fax: 617-349-8974
email: xxxxxx@mail.lesley.edu

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