INSTITUTIONAL COSTS OF RESEARCH: RECOVERY AND DISTRIBUTION
May 22, 2012
May 22, 2022
Board of Governors
President delegated to Vice-President (Research and International)
Director, Office of Research Services
External Parties: Research Sponsors; Employees: Faculty, Adjunct Appointments, Nil-Salaried Appointments, GFTs, Department Heads, Deans and Directors
1.0 Reason for Policy
1.1 To acknowledge that Institutional Costs are attributable to all research conducted at the University; and to provide a mechanism for the University to recover these Institutional Costs through clearly established Institutional Cost rates.
1.2 To establish a consistent distribution of Institutional Costs revenue in a manner that reflects an appropriate recognition of the costs of conducting research.
2.0 Policy Statement
2.1 Introduction and Scope
The cost of conducting research at the University includes not only the Direct Costs of the research project, but also the Institutional Costs, which indirectly support the research of University researchers, but are often not included in the budgeting process. Institutional Costs cannot be attributed directly or easily to a research project, but are real costs incurred by the University to provide the infrastructure and support required for the conduct of research. If Institutional Costs are not recovered in research project funding, the University must cover these costs from other revenue sources, which can negatively affect other University operations. It is therefore important when requesting research funding from sponsors to include Institutional Costs in the Budget.
This Policy applies to all Agreements (as defined in subsection 2.2.2) except:
2.1.1 Research Grants from the Tri-Councils (Canadian Institutes of Health Research, Natural Sciences and Engineering Research Council, Social Sciences and Humanities Research Council); and
2.1.2 the associated annual allocations provided by the Tri-Councils towards the indirect costs of research because of its unique eligibility and reporting requirements.
2.2.1 “Academic Unit” means any University faculty or school, with the exception of schools within a faculty; such schools shall be treated as a department for the purposes of this Policy.
2.2.2 “Agreement” means, collectively, a Clinical Trial Agreement, Research Contract, Research Grant and Technical Services Agreement.
2.2.3 “Budget” means the detailed statement submitted to the sponsor outlining the estimated research project costs to support sponsored research.
2.2.4 “Clinical Trial Agreement” means an agreement between the University and a sponsor to perform, on behalf of the sponsor and in exchange for payment of costs, prospective biomedical assessments on human subjects, predominantly patients, designed to answer specific questions about biomedical or behavioral interventions.
2.2.5 “Direct Costs” means the budgeted expenditures for carrying out a research project at the University except, normally, for the salary of the researcher(s). Direct Costs may include per diem payments to the researcher, the salaries of research assistants and stipends for graduate students, equipment and supplies costs, travel and publication costs and other costs allowed by the sponsor.
2.2.6 “Institutional Costs” means University expenditures incurred to benefit and support research for which it is not possible to provide an exact itemization of the cost attributable to an individual research project. Institutional Costs are real costs to the University, and include, without limitation, building use and depreciation, utilities, maintenance and upgrade of library resources, computer and network support, management and administration of research, financial services (including purchasing and accounting), legal services, human resource services, technology transfer office services, regulatory and research compliance (including research ethics, human ethics, animal ethics, and biohazard certification), hazardous waste disposal, controlled goods, radiation safety, occupational safety, campus security and liability insurance.
2.2.7 “Research Contract” means an agreement between the University and a sponsor to perform research and research-related activities on behalf of the sponsor, in exchange for payment of costs. For the purpose of the Policy, Research Contracts do not include Clinical Trial Agreements, which are addressed separately.
2.2.8 “Research Grant” means funds that are awarded by a sponsor to perform research and research-related activities without contractual terms or obligations.
2.2.9 “Technical Service Agreement” (also known as a Fee-for-Service Agreement) means an agreement that does not involve the undertaking of research but rather the use of existing knowledge, skills or expertise to provide a service for a sponsor.
2.3.1 Funding for research projects must cover all of the costs of doing research, except, normally, the salary of the researcher. Since the total cost of research is made up of both Direct Costs and Institutional Costs, researchers must include in the Budget an allowance for Institutional Costs at the rates established by the University in this Policy.
2.3.2 Reducing or omitting Institutional Costs in a Budget with the expectation that the University will absorb the costs is inappropriate, since the University does not have the financial resources to subsidize sponsored research.
2.4 Institutional Cost Rates
Institutional Costs will be recovered at the following rates:
2.4.1 Research Contracts: 30%
2.4.2 Clinical Trial Agreements: 30%
2.4.3 Technical Service Agreements: 40%
2.4.4 Research Grants: 15%
2.5 Calculation of Institutional Costs
Institutional Costs are charged as a percentage of the total Direct Costs.
2.6.1 The University will accept modified Institutional Costs rates from government and non-profit agencies, provided the modified rates are published and there is sufficient evidence that the modified rates are applied to all Canadian universities.
2.6.2 In all other instances, approval of the Vice-President (Research and International) is required for any exception to the Institutional Costs rates set out in this Policy. Requests for exceptions must be made in writing to the Director of the Office of Research Services, with support from the Dean or Director of an Academic Unit and from the Department Head for Academic Units with Departments. Requests for exceptions must include an explanation as to why the exception should be considered. The Director of the Office of Research Services will in turn forward the request to the Vice-President (Research and International) for consideration.
2.7 Distribution of Institutional Costs Revenue
In order to support and promote sponsored research, and to assist Academic Units and researchers in offsetting Institutional Costs in connection with research, Institutional Costs revenue will be distributed as follows:
2.7.1 The distribution of Institutional Costs recovered from Research Contracts, Clinical Trial Agreements, and Research Grants shall be as follows:
a) Academic Unit: 50% to be distributed as follows:
(i) Researcher: 50% (or 25% of the total)
(ii) Researcher’s Dean or Director: 20% (or 10 % of the total)
(iii) Researcher’s Department Head: 30% (or 15% of the total)
For Academic Units without departments: 30% (or 15% of the total) shall be distributed to the researcher’s Dean or Director so that the total amount distributed to the Dean or Director under this subsection 2.7.1(a) shall be 50% (or 25% of the total).
b) University Administration: 30%
c) Vice-President (Research and International) to support research development: 20%
2.7.2 The full amount of the Institutional Costs revenue recovered from Technical Service Agreements shall be distributed to the researcher’s Dean or Director to be used only for the maintenance, repair and upgrade of the research infrastructure and equipment in the researcher’s laboratory.
2.8 Use of University Resources for Outside Professional Activities
When University researchers engage in outside professional activities, such as consulting, involving the use of University facilities, supplies or services, the researcher must inform the relevant Department Head, or Dean or Director for Academic Units without departments, and enter into a written agreement to pay the University the costs of the use at prevailing rates set by the University.
3.1 The University Secretary is responsible for advising the President that a formal review of the Policy is required.
3.2 The Vice-President (Research and International) will be responsible for the communication, administration and interpretation of this Policy.
4.0 Secondary Documents
4.1 The Vice-President (Research and International) may approve Procedures which are secondary to and comply with this Policy.
5.1 Formal Policy reviews will be conducted every ten (10) years. The next scheduled review date for this Policy is May 22, 2022.
5.2 In the interim, this Policy may be revised or rescinded if the Approving Body deems necessary.
5.3 If this Policy is revised or rescinded, all Secondary Documents will be reviewed as soon as reasonably possible in order to ensure that they:
(a) comply with the revised Policy; or
(b) are in turn rescinded.
6.0 Effect on Previous Statements
6.1 This Policy supersedes the following:
(a) all previous Board/Senate Policies, Procedures, and resolutions on the subject matter contained herein;
(b) all previous Administration Policies, Procedures, and directives on the subject matter contained herein;
(c) Recovery of Indirect Costs Policy; and
(d) Distribution of Indirect Cost Income Policy.
7.0 Cross References
Research Agreements Policy
Research Agreements Procedures