Budget

Some sponsors request that indirect costs do not exceed a percentage of total project costs. In these instances, the percentage rate of indirect on total project costs will be lower than the standard method method of calculating percentage of indirect costs on total direct costs. To calculate indirect costs on total project costs, use this formula:

Calculation: Direct costs/(1 –allowed indirect rate) = Total Costs
Total costs - Direct costs = Indirect costs

Example:

A sponsor limits Indirect Costs (IC) to 22% of total costs

Assume direct costs (DC) - tuition charge (TC) - equipment costs (E) - dollars over $25K on each subcontract (SubK) = $150,000 (Modified Total Direct Costs - MTDC)

$150,000/ (1-.22) = $150,000/.78 = $192,307 Total costs

$192,307 - $150,000 = $42,307 Indirect costs

Indirect rate = $42,307 IC/$150,000 DC = 28.21% on total direct costs (remember to add TC, equipment costs and dollars over $25K for each subcontract back into total costs after determining indirect costs).


Once the percentage of indirect costs on total direct costs is determined, you can use this rate to apply it as a regular indirect rate on modified total direct costs.

  1. Figure out Direct Costs (DC), and subtract tuition charge (TC) - equipment costs (E) - dollars over $25K on each subcontract (SubK) = $150,000 (MTDC)
  2. (DC-TC-E-SubK) x .2821= Indirect costs
  3. (DC- TC-E-SubK) + Indirect = Subtotal
  4. Take subtotal and add back in TC, E & SubK = Total costs

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Research

Sponsored Research means all research and development activities that are sponsored by federal and non-federal agencies and organizations. This term includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.

Research seeks fuller knowledge of a subject and involves investigation aimed at the discovery of new facts or revision of accepted theories. Research projects may include laboratory work, testing and evaluation, questionnaires, pre- and post-tests, and statistical analysis.

Instruction

Sponsored Instruction means the teaching and training activities of an institution established by grant, contract, or cooperative agreement. These activities may be offered for credits toward a degree or certificate or on a non-credit basis, and may be offered through regular academic departments or through separate divisions, such as summer school or extension. (Research training is not included; it is included under Research above.)

Instruction is used when the primary purpose of the project involves training, curriculum development, instruction, demonstration, or efforts to improve pedagogical methods.  Instructional projects may include some elements of research, particularly if new techniques of instruction or curriculum content are being developed.

Examples

  • Any project for which the purpose is to instruct any student at any location; recipients of this instruction may be UMass students or staff, teachers or students in elementary or secondary schools, or the general public
  • Curriculum development projects at any level, including projects which involve evaluation of curriculum or teaching methods; such evaluation may be considered “research” only when the preponderance of activity is data collection, evaluation and reporting
  • Projects which involved UMass students in community service activities for which they are receiving academic credit.
  • Activities funded by awards to departments or schools for the support of students
  • Dissertation work funded by grants, including grants for travel in relation to a dissertation
  • Programs bringing local students on campus for classes
  • General support for the writing of textbooks or reference books, video or software to be used as instructional materials.

 

Other Sponsored Activities

Other Sponsored Activities are programs and projects sponsored by federal and non-federal agencies which involve the performance of work other than instruction and organized research.

Examples include health service projects, community service programs, non-credit community education, and conferences.

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Cost Share Sources

Types of cost share in order of priority for use:

  1. Tuition Credits. Whenever possible, tuition credits should be used to cover mandatory cost share. 
  2. Academic Year Salary. Academic year salary plus the associated fringe and Facilities & Administration (F&A) may be used to meet mandatory cost share with approval of the dean.  The approval form must be uploaded in Kuali with the proposal.
  3. Unrecovered F&A. When the sponsor requires a lower rate than our federally approved rates, the amount of the F&A reduction from the full rate may be used towards cost share requirements unless disallowed by sponsor. No pre- approval is necessary.
  4. Graduate Student and other non-faculty salary.  Graduate Student research assistant salary, other non-faculty salary and associated benefits can be used as cost share if a University source is available to fund it.
  5. Other cost share. All other requests for cost share of $10,000 or less shall be the responsibility of the department and college and must be comprised of  allowable categories as defined in the University cost sharing policy.    Deans may request contributions from the VCRE towards mandatory cost share when amounts over $10,000 are required to meet mandatory cost share requirements in a proposal.
  6. Equipment.  When purchased as cost sharing, please list the Speedtype on the Institutional Commitment section of Kuali and ensure that the authorized approver is included on the Kuali routing map. The equipment must be purchased within the proposed grant period in time to benefit the project and must be dedicated exclusively to the proposed project or pro-rated based on use for the project.
  7. Third Party Cost Share. If from a source not under subcontract to UMass Amherst, must be approved by the VCRE. Submit requests to vcre@umass.edu with department and school/college recommendations two weeks in advance of the internal deadline. Approval must be uploaded in Kuali with proposal.
  8. F&A Waiver or Reduction. Requests for indirect cost reductions to meet mandatory cost share requirements are based on recommendations from the department and school/college to the VCRE two weeks in advance of the internal deadline.

 

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