Project budgets should include all costs required to accomplish the objectives in the proposal or agreement. These costs are categorized as either direct or indirect costs:

• Direct Costs (e.g. salary, fringe benefits, and materials and supplies) can be identified specifically with a particular final cost objective or can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect (F&A) costs (413).
• Indirect (Facilities and Administrative – F&A) Costs means those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted. These costs include building depreciation, equipment and capital improvement, utilities, custodial services, general administration, research administration, the libraries, accounting, and purchasing. (414).

The University’s F&A rates are determined by an agreement with the federal government in accordance with the federal Uniform Guidance. More information related to the University’s F&A rate is available at URI Controller Sponsored Cost Accounting.

Exceptions Under F&A Procedures

The University of Rhode Island will honor published (e.g. foundations or non-profits) or statutory (e.g. USDA, US Dept. of Education) limitations on recovery of indirect costs. In addition, the University accepts a rate of rate of 25% on Modified Total Direct Cost for projects where the prime sponsor is a State of Rhode Island agency.  

All other exceptions to these F&A rates require a waiver, which is approved by the Vice President for Research and Economic Development (VPR). Requests should be made to the Associate Vice President for Research Administration for the VPR to consider. Requests should include a detailed budget, explanation for the request, and (if required) a draft commitment letter prepared for VPR signature. Requests for IDC adjustments must be routed by the AVP for review and approval at least 7 business days prior to the proposal submission deadline.

F&A Rate Decision Guide

Is it Research?

Organized Research means all research and development activities of an institution that are separately budgeted and accounted for. It includes:

• 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 (research training).
• University research means all research and development activities that are separately budgeted and accounted for by the institution under an internal application of institutional funds. (2 CFR 200 Appendix III Section A.1.b.).

An Organized Research rate may be appropriate if you can answer yes to any of the following:

• Is there a systematic investigation or are there activities including testing and evaluation?
• Will there be a scholarly inquiry, analysis, or critical study, testing, hypothesis, or data collection?
• Will the findings be used to contribute to generalizable knowledge (i.e. meant to have an impact on others within the discipline) inside or outside the Institution?
• Will the results or outcomes be published, archived, presented or viewed in some way as relevant beyond the specific participant population?

Is it Sponsored Training/Instruction?

Sponsored Training/Instruction means all teaching and training activities (except for research training), whether they are offered for credits or through regular academic departments or separate divisions. Also considered part of Instruction is departmental research:

• Sponsored instruction and training means specific instructional or training activity established by grant, contract, or cooperative agreement. For purposes of the cost principles, this activity may be considered a major function even though an institution’s accounting treatment may include it in the instruction function.
• Departmental research means research, development and scholarly activities that are not organized research and, consequently, are not separately budgeted and accounted for. (2 CFR 200 Appendix III Section A.1.a.).

A Sponsored Training/Instruction rate may be appropriate if you can answer yes to any of the following:

• Will the activity support curriculum development?
• Will the activity support teaching/training activities (other than research training)?
• Is the intended audience students enrolled at the University?

Is it Other Sponsored Activities?

Other Sponsored Activities means programs and projects financed by Federal and non-Federal agencies and organizations which involve the performance of work other than instruction and organized research. Examples of such programs and projects are health service projects, community service programs, conferences, travel grants, public events, library collections, archival digitizing or cataloguing. (2 CFR 200 Appendix III Section A.1.c.).

An Other Sponsored Activities rate may be appropriate if you can answer yes to any of the following:

• Is the intended audience the public?
• Is the intended activity a conference whose participants are not students enrolled at the University?
• Is the intended activity travel to a conference (excludes travel related to research)?

Does the Off-Campus Rate Apply?

The off-campus rate will apply for all activities:

• Performed in facilities not owned by the University and where no costs are included in the F&A pools, or
• Where rent is directly allocated/charged to the project

Grants/contracts will not be subject to more than one indirect cost rate. If more than 50% of a project is performed off-site, the off-campus rate will apply to the entire project.