Chapter 8: Indirect Costs

Research Policy Analysis and Coordination (RPAC), in coordination with Costing Policy and Analysis and the campus C&G/SPO offices, maintains this chapter about indirect cost recovery as it pertains to sponsored research at the University of California. Chapter 8 provides background information and guidance on the application of indirect cost agreements and the process for indirect cost exceptions.

Revision History

  • Archive of Chapter 8 prior to May 17, 2024: Chapter 8-700 was republished on May 17, 2024 to reflect current campus delegations of authority to clarify the federal definition of equipment in the computation of direct costs.
  • Archive of Chapter 8 prior to May 25, 2023: Chapter 8-500 was republished on May 25, 2023 to reflect current campus delegations of authority to approve indirect cost exceptions under DA 2254/2292, which were revised on August 24, 2022.
  • Archive of Chapter 8 prior to October 26, 2017Chapter 8, specifically 8-500, was republished on October 26, 2017 to reflect changes to how indirect cost exceptions are categorized and provide revised guidance on intramural funding. 
  • Archive of Chapter 8 prior to November 28, 2016Chapter 8 was republished on November 28, 2016 to reflect substantial changes in University practices around indirect cost recovery. 

Table of Contents

8-100 General Policy

8-100 Indirect Costs

8-110 General Policy on Indirect Costs

8-120 Duties of Principal Investigators and Administrators to Seek Full Cost Recovery

8-130 Duties of the President

8-140 Duties of the Regents’ Committee on Finance

8-200 Background on the Indirect Cost Rates Used at the University

8-200 Federally-Negotiated Rate Agreements and Federally-Negotiated Rates

8-210 Cognizant Agency for Indirect Costs

8-220 UC Rates

8-230 Types of Sponsored Projects

8-230.1 Instruction

8-230.2 Organized Research

8-230.3 Other Sponsored Activities

8-230.4 Other Institutional Activities

8-240 Distinguishing between Extramural Project and Sales & Services

8-250 Overview of Indirect Cost Components or Pools

8-250.1 Depreciation

8-250.2 Interest on Debt

8-250.3 Operation and Maintenance

8-250.4 Library

8-250.5 General Administration

8-250.6 Departmental Administration

8-250.7 Sponsored Projects Administration

8-250.8 Student Administration and Services

Chapter 8-300 Computation of Indirect Costs

8-300 Introduction to Indirect Cost Rates

8-310 Applying Rates

8-310.1 Applying the Federally-Negotiated Rates

8-310.2 Applying the UC Rate

8-320 Application of Rates Based on Project Type and Location

8-320.1 Project Type

8-320.2 Determining an Off-Campus Rate

8-330 Applicable Rates for Multiple Campus Awards

8-340 Applicable Rates for Agreements between Campuses and Lawrence Berkeley National Laboratory

8-350 Applicable Rates for University Extension Awards

8-360 Applying the Base and the Calculation on the Indirect Cost Amount

8-360.1 Total Cost

8-360.2 Total Direct Cost Base

8-360.3 Modified Total Direct Cost Base for Indirect Cost Calculation

8-370 Exclusions for Calculating the Modified Total Direct Cost base

8-370.1 Equipment

8-370.2 Capital Expenditures

8-370.3 Patient Care Costs

8-370.4 Tuition Remission

8-370.5 Rental Costs

8-370.6 Scholarships and Fellowships

8-370.7 Subawards and Subcontracts

8-370.8 Genomic Array

Chapter 8-400 Indirect Cost Rates in Proposals and Awards

8-400 Indirect Cost Rates in Project Budgets

8-410 Changes in Rates

8-420 Awards Transferred to a UC Campus

8-430 Moves from Off-Campus to On-Campus

Chapter 8-500 Indirect Cost Exceptions

8-500 Exceptions to Approved Indirect Cost Rates

8-510 Delegation of Authority to Approve Exceptions to Approved Indirect Cost Rates

8-520 Indirect Cost Exceptions and Cost Sharing

8-530 Procedures and Documentation for Indirect Cost Exceptions

8-540 Verified Sponsor Policy List

8-550 Case-by-Case Exceptions

8-560 Types of Case-by-Case Exceptions

8-560.1 Sponsor Policy

8-560.2 Campus Determination

8-560.3 Agricultural Interest

8-560.4 Special Approval

8-570 Special Approval Exceptions for Federal Funding

8-580 Special Approval Exceptions for State of California Funding

8-590 Intellectual Property Provisions and Indirect Cost Exceptions

8-591 Administrative Fee or Institutional Allowance in Lieu of Indirect Costs

8-592 Intramural Funds

8-593 Treatment of Pass-Through Funds

8-594 Applicability and Duration of Approved Exceptions

8-595 Retroactive Indirect Cost Exceptions for Overdrafts, Sponsor Default, or Disallowed Costs

8-596 Collection and Analysis of Data