GOVERNING DOCUMENTS: FINANCIAL

POLICY:	RECOVERY OF INDIRECT COSTS
Effective Date:	April 1, 1986
Revised Date:	June 17, 1993
Review Date:
Approving Body:	Vice-President (Research)
Authority:
Implementation:
Contact:	Vice-President (Research)
Applies to:	All Staff

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All contracts between the University of Manitoba and external sponsors for research and other academic and service programs require the formal approval of the Vice-President (Research and External Programs) and the signature of the Vice-President (Administration).

All contracts with external sponsors for research and other academic and service programs are subject to indirect costs charges as described in Table 1 to recover associated indirect costs.

Table 1

INDIRECT COST CHARGEOUT RATES FOR RESEARCH

AND OTHER ACADEMIC AND SERVICE PROGRAMS

Agency/Sponsor	%	Base	Special Information
Canadian Government	65	on campus labour	all labour
	30	off campus labour	defined as "field", HSC or St. B. facilities not considered "off campus"
	2	travel	administrative fee
IDRC	13	total	under review
CIDA	54	on campus labour	indirect costs are calculated on both the contributed salary and the CIDA paid salary
	35	off campus labour	off campus is defined by CIDA as greater than 4 consecutive months on project site
Province of Manitoba	30	labour	for research and academic service agreements
	10	variable (labour/total)	Health Protection Branch physician and dental services agreements
Industry	30	total direct cost	may be negotiated downwards depending on acquisition of useful equipment/computers, ownership of intellectual property, licensing arrangements
Clinical Trials	30	total direct cost	assistance with clinical trial budgets and agreements can be obtained through the Office of the Vice-President (Research)
US Federal Agencies including NIH, DHHS	46	Salaries + wage base	indirect costs should be included on all applications. Assistance with applications can be obtained at ILO Bannatyne campus.

It is recognized that some awards may not easily be expressed as "grant" or "contract"; the Guidelines for Determining Type of Award should be used as a reference. The Office of the Vice-President (Research and External Programs) is responsible for making this determination.

Where grants for research and other academic and service programs allow for the recovery of indirect costs, faculty members should include them in their proposals. Many charitable organizations and foundations have formal rules against paying for indirect costs while others have guidelines providing for certain indirect costs.

Principles for Developing Budget/Cost Proposals for Research and Other Academic and Service Programs Contracts

1. Full cost recovery of all direct costs including but not limited to total labour cost, materials and supplies, travel and accommodation, external consultants, equipment (purchase, rental, maintenance, taxes and installation), necessary renovations and computer time. Labour costs should include a cost factor for faculty and other staff members' time based on salary (including benefits and payroll levy).

2. Full recovery of indirect costs. The following are amongst those typically included in indirect costs: Comptrollers Office (purchasing, budgets & grants, payroll), Employee Relations, Physical Plant, General Administration (research administration, legal counsel, institutional review committees), Faculty Administration (Dean and Department offices, review committees), and access to general library and computer services.

Research and Other Academic and Service Programs Contracts with Industrial/Private Sector Sponsors (including clinical trials)

Indirect costs may be identified as a separate budget item or expressed as a function of total cost. Other alternative methods of costing can be considered provided that full costs are recovered. These methods are to be approved in advance by the Office of the Vice-President (Research and External Programs).

Variations in Indirect Cost Recovery

It should be recognized that the ability of the University to subsidize contract research or other academic and service programs through the absorption of indirect costs is limited. While the indirect cost recovery rates are standard, the administration of the policy is flexible to cope with the peculiar nature of individual situations. For example, where capital expenditures promote long-term benefits to the University, a reduction in the indirect cost rate may be considered.

In all cases, variations must be requested at the time of submission of the Form 58 (i.e. before submission of proposal to sponsor) and approved through the Office of the Vice-President (Research and External Programs).


Principles of In-Kind Contributions

Some agencies require that the University make "contributions" to the costs of certain projects. In this case, contributions should be calculated to express the cost of the faculty members' time (including associated indirect costs) and shown on the budget as a contribution of cost. This contribution must be approved, in advance of submission of proposal, by the Department Head, Dean and Vice-President (Research and External Programs).

Clarification

Clarification on any of the above can be obtained by contacting the Office of the Vice-President (Research and External Programs).

Note: Effective October 1, 1993

 

INDIRECT COST CHARGEOUT RATES FOR RESEARCH
AND OTHER ACADEMIC AND SERVICE PROGRAMS

The determination of whether a project is grant or contract oriented has to do with the nature of the work to be performed and the conditions under which that work is performed. The following information will be of use to persons preparing research project applications in assisting them to identify the funding nature of their applications.

Grant

A grant is financial support for an investigator, or investigators, or group or centre or institute conducting research in a particular subject area or field, without any formal detailed stipulations as to the direction of such research.

The research funded by a grant can be initiated by the investigator(s), group, research centre/institute conducting it or by the grantor. The following characteristics are also normally present:

1. funds traditionally cover research assistants (students), technicians, equipment, supplies and travel. The funds are not attached to a specific performance outcome and cannot be retracted as a function of performance. Equipment purchased belongs to the University of Manitoba.

2. no direct or indirect remuneration to the principal investigator or co-investigators.

3. objectives are defined in a general fashion.

4. no specific transfer of results to the grantor; however a final report stating the results of the research is usually submitted to the grantor.

5. knowledge created is "transferred" by peer-approved means at discretion of investigator(s): publications, workshops, seminars.

6. investigator(s) and the University of Manitoba jointly own any innovations arising from the project (e.g. software, new drug, new product/process).

7. payment to University of Manitoba is generally made in advance of expenditure.

Contract

A contract is an agreement between legal entities, namely the sponsor and the University, to provide financial support for an investigator or investigators, to conduct research in a particular subject area or field under specific stipulations and conditions. These conditions may:

1. specifically outline the scope and nature of the research

2. set the time period(s) for the activity

3. define the deliverables

4. establish ownership, patent rights and licensing arrangements

5. provide for confidentiality of information supplied and created

6. establish budget approvals and payment schedules (payment may be made as work accomplished is invoiced)

7. establish considerations for acceptance and/or termination

8. limit liability of participants, and other matters that may be appropriate to the circumstances.

References

Corporate Higher Education Forum - "Spending Smarter - Update", May 1986

University of Alberta - "Overhead Policy", September 1987

AUCC (CAURA/CAEDO), 1991