Research Policy Analysis and Coordination
State of California
In coordination with the California State University (CSU), UC gradually increases the indirect cost (IDC) recovery rate for on-campus projects funded by State of California agencies. The CSU and UC originally established a base rate of 25% increasing 5% until 40% of the Modified Total Direct Costs (MTDC) is reached. For projects performed off-campus, the indirect cost recovery rate will not escalate and is capped at 25% MTDC.
The table below represents current rates as of February 2023. The original rate schedule (since modified) was established in RPAC Memo 16-01. Exceptions and additional information on federal pass through funds is provided below.
|July 1, 2022 through June 30, 2023||30%||25%|
|July 1, 2023 through June 30, 2024||35%||25%|
|After July 1, 2024||40%||25%|
California Department of Food and Agriculture (CDFA)
Consistent with other State of California agencies, IDC on funding from CDFA should recover indirect costs at the Rate Schedule indicated above. However, Agricultural Marketing Orders and Commodity Boards established and overseen by CDFA are subject to differing rates.
For "training" activities, a reduced rate of 8% MTDC will be accepted, consistent with NIH's F&A limitation for institutional training grants. This rate may be used for training grants that are in support of UC's educational mission, and does not apply in instances where a UC campus provides training to a state agency.
Federal Pass-Through Funding from State of California Agencies
An appropriate F&A rate agreement, rather than the UC Rate, must be applied when a State of California agency is acting as a pass-through entity (PTE) of federal funding to UC. A PTE, a non-Federal entity that provides a subaward to a subrecipient to carry out part of federal project, is not authorized to make unilateral restrictions of indirect cost recovery.
- If a "subrecipient already has a negotiated F&A rate with the Federal government, the negotiated rate must be used (PDF)" in a subaward, according to Q-134 of the Chief Financial Officers Council's Frequently Asked Questions (May 3, 2021).
- Reduction of the campus F&A rate may not be "encouraged or coerced in any way by the Federal awarding agency or pass-through entity (PDF)," according to Q-132 of the CFO Council's FAQ.