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Procedure for Requesting Unit for Laboratory Animal Medicine Overhead^ Recovery
All animal care expenses being charged to sponsored projects are subject to the standard indirect cost rates established by the University. Prior to July, 2010, these expenses were excluded from the indirect cost rate recovery under a Modified Total Direct Cost (MTDC) base, but were instead charged a Specialized Service Facility Fee of 39.5% (federal) or a Quality Assurance Fee of 45% (non-federal). As a result of the change of indirect rate recovery, projects that began under the previous rate structure may request “forgiveness” of overhead recovery to account for the difference in expense. Projects are eligible if 1) the newly applied rate is higher than the awarded rate for the costs and 2) the project results in a financial shortfall due to this change.
This PDF of the PowerPoint Presentation that was shared in June, 2010, summarizes the changes.
Steps to Request “Forgiveness” of Overhead Recovery Due to the Calculation Change:
- During the financial close-out process, confirm the project has an overdraft.
- Verify that the indirect cost rate charged to the project is higher than the former SSFF/QAF rate. You may wish to double check the calculation of indirect (or F&A) rate in the award document to be sure that the project was not negotiated to recover the higher rate at time of award.
- Do the following calculation:
- Multiply all animal care expenses (account codes 618271 & 618272) by the indirect cost rate = A
- Multiply all animal care expenses (account codes 618271 & 618272) by the former SSF/QAF rate = B
- A – B = Maximum Recovery
- Send an email to email@example.com providing the following information:
- The parent P/G and each impacted sub P/G
- A statement that the project was awarded with an SSFF/QAF lower than the project indirect cost rate
- Provide the total amount of animal charges (by P/G) on or after 7/1/2010
- Provide the figure from step 3.
The request will be reviewed within a week. The original proposal documents and subsequent award documents will be verified that at time of award, NIH did not include animal housing in the IDC calculation and a Specialized Service Facility Fee (SSFF) was used instead. Projects that meet these qualifications will be eligible for the program.
As appropriate, a response will be sent with the approved amount of overdraft. And the email will contain instructions on what to give to Sponsored Programs for their handling. We recommend monitoring the formula over the life of the project to calculate the expected overdraft that is specifically from the animal care rate change. Any overdraft as a result of other overspending will not be “forgiven”.
^The terms “Overhead”, “Facilities & Administrative Costs (F & A)”, and “Indirect Costs” are all synonymous and used interchangeably.
Questions? Contact Grant Review & Analysis at firstname.lastname@example.org or 734-763-4272.