F&A/Overhead and Overhead Distribution Policy

Facilities and Administrative Costs (F&A/Overhead) and Overhead Distribution Policy Indirect Costs (effective for all new grants received after July 1, 2011)

Introduction

Research and other sponsored activities are an integral part of the academic mission of Emerson College. Improving faculty support for research is a goal outlined in President Pelton’s Strategic Plan as approved by the Board of Trustees in May, 2011. As such, the guiding principles of this policy are to recognize faculty and departments who are successful in obtaining externally funded grants and contracts for which F&A is charged, and to incentivize further success by making additional resources available that enhance research, teaching and student or grant activities to those units that generate F&A.

The College’s current federally negotiated indirect cost rate is 49.9% MTDC (Modified Total Direct Cost) Some examples of costs to which you should not apply overhead are equipment, tuition remission, scholarships, renovations and subcontracts over $25,000. Please see Office of Management and Budget Circular A-21 for a complete list of allowable and unallowable costs.

Policy Statement

It is the policy of Emerson College to request the approved federal Facilities and Administrative Costs (F&A) rate on all federal grants and/or contract proposals. Many foundations also allow F&A costs to be added to grants, and the allowed rate for each specific foundation or corporation should be requested.

F&A Revenue Sharing Policy for Grants and Contracts

Emerson College will distribute a portion of recovered F&A from external sponsors as follows:

College General Fund 60%
Principal Investigator (P.I.) 15%
P.I. Home Department/Center/Lab 10%
Office of Research and Creative Scholarship 10%
Relevant Senior Administrator 5%

Guidelines

Changes to these rates will require the re-approval of the policy through normal channels. Exceptions will require the approval of the relevant Vice President, Vice President of Academic Affairs, AVP for Research and Creative Scholarship, and the Director of Budget and Planning. If the sponsor does not provide any F&A, there is no revenue sharing of F&A.

The Office of Budget and Planning and the Vice President for Academic Affairs will have joint oversight of this policy.

The overhead funds that go to the PIs, departments/centers/institutes, or the Dean/Senior Administrator can be used for a variety of purposes necessary for carrying out all research and programmatic projects designed to encourage and support sponsored research at Emerson. Examples include, but are not limited to, seeding new projects, attending conferences, hiring research assistants, related travel, equipment, supplies and materials, to cover budget overruns or disallowed expenditures on grants, or bridge project costs when one grant is ending and awaiting notification of a pending renewal or new grant. Note: These funds are considered internally designated by the College. Please note, any equipment purchased with these funds become the property of Emerson College.

F&A allocations may not be used for faculty salaries, course buyouts or supplements to faculty salary.

Grants that include a College matching requirement, will be reviewed by the Office of Budget and Planning and the respective Vice President before any F&A allocation is finalized.

Where appropriate, PIs are encouraged to discuss with their department chairs how funds to the department and funds to the principal investigator (PI) might be pooled to enhance the overall research infrastructure necessary for the conduct of research or to partner with other organizations to conduct research.

If faculty from more than one department are involved in the research project, the department of the lead P.I. will receive the funds. F&A funds remaining in the account of a PI will be returned to the College’s general fund if the PI is no longer employed by the College.

Procedures

The principles that apply to this process are as follows:  Funds from overhead (indirect costs) must be used to enhance research or grant activities.

Indirect costs charged on grants are intended to reimburse the College for real costs incurred in connection with a grant or contract. These funds are subject to audit and may not be used for other purposes. A portion of these discretionary funds will be used to create a pool of funds for distribution.

At the end of each quarter, an amount that is equal to 40% of the total indirect costs generated from active external grants or contracts that contain overhead will be allocated into a separate “Research Account”. You will be notified individually as you are assigned a “Research Account” and you will be responsible for monitoring and managing that account.

On an annual basis, the Office of Budget and Planning, in conjunction with the responsible Vice President and the Principal Investigator (PI), will review all discretionary accounts of $25,000 or more, or accounts that have had no activity for the prior three fiscal years to determine if the balances should be carried over or reallocated.

Allocations for each award will be made as follows: 15% to the Principal Investigator or Project Director; 10% to the Department Chair or Center; 10% to the VPAA or Relevant Senior Administrator and 10% to the Office of Research and Creative Scholarship. While it is highly recommended that funds be used within a period of three years (and there will be a  three year review), these allocations will be carried forward.

Indirect costs will distributed by the Finance Office after the end of each quarter. For example, indirect costs generated from July-September, 2013 will be distributed in October 2013.

Allocations may be used for any expenditure necessary for carrying out research and programmatic projects and to encourage and support sponsored research, including, but not limited to, seeding new projects, hiring research assistants, related travel, purchase of equipment or software, participation in conferences and workshops, consultants, undergraduate or graduate students, temporary clerical, laboratory or grant-gap support, books periodicals, supplies, or stipends for assistance with proposal development. Where appropriate, PIs are encouraged to discuss with their department chairs how funds to the department and funds to the principal investigator (PI) might be pooled to enhance the overall research infrastructure necessary for the conduct of research. These funds are not to be used for faculty salaries, course releases or fringe benefits. Overhead funds remaining in the account of a PI will be returned to the college's general fund if the PI is no longer employed with the college.

All equipment or property purchased with grant funds, whether from direct or indirect costs, becomes the property of the College at the end of the grant or contract. Distribution of equipment will be reviewed during the close-out process of the grant or contract.

It is the responsibility of the Principal Investigator/Project Director to assure that a grant or contract does not exceed its budget. Consistent monitoring and prior approval of expenditures by the Office of Research and Creative Scholarship should ensure that this does not occur. However, In the case of budget overruns or disallowed expenditures, the indirect cost allocation will be reduced in this order: first to the PI/Project Director, then the Department Chair and the Office of Research and Creative Scholarship. The amount will be reduced by the amount of the overrun or the disallowed cost.

Note that most costs for grant-funded projects must be charged directly to the grant (as direct costs). Such costs include an appropriate percentage of the PI's annual and/or summer salary, course buyouts, consultants, undergraduate assistants, equipment needed for research, travel, subject payment fees, postage, photocopy charges, costs of lab analysis, materials that will be used solely for the conduct of a specific research project, etc.

Questions concerning the application of this policy should be directed to the Office of Research and Creative Scholarship: 617-824-3075.