Budget & Payroll

20.07         Distribution and Use of Indirect  Cost                                       Issued: November 16, 1998
                                                                                                                        Updated: May 15, 1998

1.     Purpose

        The University earns indirect cost on grants and contracts. The purpose of indirect cost is to
        help pay for the associated overhead costs incurred by the University.

2.     Distribution Methodology

        Indirect Cost will be distributed as follows:

        2.1    Academic Department

        2.2   Centers

  
        2.3   Non-Academic Departments

3.     Distribution Date

        The University makes the distributions on a monthly basis.

4.     Use of Indirect Cost

        4.1     Generally, indirect cost funds can be spent for any Educational & General purpose.
                  Essentially this means that they can be spent for anything that state funds can be
                  expended for.

        4.2     The above not withstanding, the Federal Government has defined in OMB Circular
                  A-21 (Section J) specific expenses it has determined to be allowable or
                  non-allowable. These restrictions must be adhered to.

        4.3     Indirect cost funds may not be used to supplement the salary of the Principal
                  Investigator.

5.     Accounting for Indirect Cost Funds

        5.1     Indirect cost funds used to support the E&G budget are deposited in the state
                  treasury along with tuition and lab fees and are used to support all E&G operating
                  accounts.

        5.2     Indirect cost funds held locally are put into separate designated fund accounts
                  specifically earmarked for indirect cost use. These funds may not be transferred to any
                  account, except for another indirect cost account.

Contact Person:     Controller