Indirect Cost Exceptions

An indirect cost exception is the official authorization to accept indirect cost recovery other than what would be recovered under the appropriate federally-negotiated rate agreement or UC Rate for a given award.

Authority for Indirect Cost Exceptions

The authority to allow exceptions lies with the President of the University of California. That authority has been delegated to the Chief Financial Officer, who has delegated that authority to campus chancellors for most sponsor types. Each campus has developed its own process for granting exceptions. Only those administrators who have been delegated authority to approve an indirect cost exception may authorize less-than-full indirect cost recovery for a proposal or an award. Principal Investigators are not delegated this authority and are not authorized to negotiate with or to accept reduced indirect cost rates from any sponsor.

Indirect Cost Exception Workflow & Documentation

To aid in the exception workflow and collect data on instances where indirect cost exceptions have been authorized, UCOP maintains the Research Enterprise Management System (REMS). REMS provides information and guidance about the sponsors of externally funded projects and supports the review, approval and tracking of indirect cost recovery exceptions. It also serves as the data repository for all approved exceptions. Collected data on indirect cost exceptions is used for further analysis of UC's contract and grant activity.

Chapter 8-500 of the Contract and Grant Manual provides specific guidance on UC's practices and procedures for indirect cost exceptions.

More Background