Indirect Costs (IDCs)
IDCs, a term that is used interchangeably with F&A or overhead, are real expenses incurred by the university to support research activities that cannot be quantified or allocated to a specific project or grant. IDCs provide and maintain the infrastructure that are essential to conduct research effectively at Ohio State. This includes central and college-based personnel and operating costs related to Human Resources, Payroll, Finance, Research Administration, and Legal; physical facility expenses such as electricity, heating, snow removal, custodial, and maintenance services; and shared equipment in labs, offices, and other spaces used for performing research. OSU has a federally approved IDC rate that is reflective of real expenses to support OSU’s infrastructure.
OSU’s Indirect Cost Rate
OSU has two basic rates that are used for most sponsors: On-campus Organized Research and On-Campus Research Related/Other Sponsored Activities. OSU also has a rate for Industry Sponsors. The GM provides guidance on the appropriate rate to use in the budget based on the scope of work, sponsor type, and the FOA or any proposal guidelines outlined by the sponsor. The U.S. Department of Health and Human Services periodically reviews the university’s rates to determine if they need to be modified. The CPH Office of Research informs the college in the event of any changes to the university’s approved rates.
Exceptions
An exception to OSU’s standard IDC rates is granted when the Prime Sponsor, whether Federal, State, Industry, Non-profit, or other, has a published FOA or guidelines that explicitly cap overhead rates regardless of the applicant’s official IDC rate. In these instances, OSU will follow the sponsor’s published proposal guidelines. OSU encourages PIs to prioritize the submission of proposals to sponsors who allow full recovery of OSU’s negotiated IDC rates over mechanisms with lower rates.
If an investigator wants to voluntarily propose a lower IDC rate and request an exception to the OSU indirect cost rate, their GM coordinates a justification for the ADR to review. A brief statement of work, budget, proposal guidelines, and a justification describing how the project would benefit the mission and strategic plan of CPH is required. If the ADR agrees with the PI that a lower rate should be requested for approval from the college, the ADR confers with the Assistant Dean of Finance and Administration and presents the specific situation, including the statement of work and the proposed rate to be used. If the Assistant Dean for Finance and Administration approves, the PI is notified by email. The investigator provides the email approval to the GM to draft the adjusted budget and the approval is documented and attached to the ePA005.
OSU strongly discourages voluntarily lowering the indirect cost rate whenever the sponsor accepts OSU’s negotiated rates. OSU monitors this activity campus-wide. Lower IDC rates have financial implications for the University and CPH.
