All PIs, DEOs, Administrators, Research Administrators, Accountants.
Policy Purpose and Description
Facilities and Administrative (F&A) Costs, also referred to as indirect costs or overhead: the real costs of university operations which are not readily assignable to a particular funded project. Indirect cost monies are provided by funding agencies in addition to the direct cost of the funded research to cover such operations as central and departmental administration, building and equipment depreciation, utilities, sponsored programs, and accounting services.
For up-to-date information about Facilities and Administrative (F&A) Costs, please visit this Division of Sponsored Programs Facilities & Administrative (F&A) Costs page.
For information on current F&A rates and how indirect funds are utilized and distributed at the University of Iowa, please see the information and the “FA Presentation” slides here.
Each year, the College of Liberal Arts and Sciences receives a significant portion of the indirect cost returns (ICR; also referred to as F&A) generated by its faculty’s grant expenditures as part of its General Fund budget. All of this amount, and typically more, is deployed by the College for research-related expenses such as startup packages, cost shares, bridge funds, renovations, shop subsidies, and its Grant Support Office.
In addition, the College directly returns a portion of its indirect cost returns to grant-holding departments to support, at their discretion, certain research-related costs. Currently, the College returns 8% of the ICR funds received in its budget proportionally to departments based on their yearly research expenditures. Note that to qualify for a distribution, a department’s calculated allocation must be over $500.
Departments should follow these guidelines in utilizing ICR funds:
- Funds must support further research, scholarship, and creative activity.
- Principal investigators whose grants and contracts generated the F&A recoveries, or an appropriate research board or executive committee, may be consulted in preparing the distribution plan.
- Good examples of fund usage include: start-up support; seed grants; offset of existing departmental budgets in the support of funded research projects; shared equipment purchases, including repairs and the purchase of service contracts; support for publication fees or faculty travel to conferences; grant and contract proposal preparation; building maintenance; and salaries and fringe for shared research staff.
Funds must be spent in the fiscal year they are distributed and cannot be carried over to the following year. Deficits in the account will be charged against the departmental general expense allocation. The College no longer requires a report from departments on how ICR funds are spent; however, the guidelines above must be adhered to and CLAS Finance will monitor expenditures to ensure they are research related.
Frequently Asked Questions
Associate Dean for Research, Finance and Operations, Division of Sponsored Programs
Last updated 12/22/22