Indirect Costs

Indirect costs (IDC) are those costs incurred for common or joint objectives and, therefore, can’t be identified readily and specifically with a particular project, instructional activity, etc. The terms IDC and F&A (Facilities and Administration) are used interchangeably. Funds paid to the institution by the grantor for F&A costs are reimbursement to the institution for expenditures already incurred and are necessary to support the programs of the institution. Examples of costs covered include general administration, sponsored programs administration, facilities costs, library, departmental administration, student administration and office supplies.

TTUHSC prepares and submits an F&A cost proposal every 3 to 4 years to the Department of Health and Human Services (HHS). The IDC cost rate is negotiated with HHS based on the submitted cost proposal and TTUHSC’s allowable IDC rate is determined. The current F&A rate agreement can be viewed on the Frequently Requested Info Page of this website.

The Office of Sponsored Programs (OSP) is responsible for requesting TTUHSC’s negotiated IDC rate when new project proposals or applications are submitted to granting agencies. The negotiated IDC rate must be accepted by all federal awarding agencies per the OMB’s new uniform guidance 2 CFR 200. A federal awarding agency may use a different rate from the negotiated rate only when required by federal statute or regulation or when approved by a Federal awarding agency head. Many state, local and private entities will not allow the full IDC rate. Once awarded the department and OSP should communicate the negotiated IDC rate to Accounting Services via the New Fund Request in the Fund Maintenance System.

The IDC information is loaded into Banner when the new fund is established. IDC expense is charged at the end of each month via an automated process based on the expenses that posted to the grant fund for that month. When the grant has concluded, Accounting Services reviews the IDC expense to ensure that it has been properly applied and do any true-ups necessary to correct rounding issues.

For more information on how to calculate the IDC expense budget, please see the IDC Budget Grant FAQ.

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