UpDate - Vol. 11, No. 37, Page 2
July 23, 1992
Indirect cost rate reductions meet new guidelines

     In compliance with new federal regulations, the University's
indirect cost on-campus research rate has been reduced by two-tenths
of a percent for 1992-93.
     The on-campus research rate is now 55.8 percent. For the College
of Agricultural Sciences, the new indirect cost research rate will be
45.8 percent, and the new off-campus research rate will be 26 percent.
     Indirect costs are reimbursements to the institution for use of
building space and equipment, maintenance and utilities,
administrative services and library services.
     The changes in rates are in response to two recent decisions by
the  U.S. Office of Management and Budget.
     According to J. Robert R. Harrison, University Treasurer, the
federal government capped administrative costs at 26 percent in
October. "That cap reduced our rate by one-tenth of a percentage
point," Harrison said. "Then the government expanded its definition of
14 unallowable costs and requested that all universities reassess
their charges retroactively using these new definitions.
     "On the basis of a study by the University's external auditors,
KPMG Peat Marwick, the indirect costs for research were reduced by
another one-tenth of a percentage point," he said.
     The federal government does not permit indirect costs to be used
for fundraising, public relations, investment management, fines or
losses and entertainment. Under the expanded definitions, for example,
working dinner meetings for faculty and students will be considered
entertainment unless a federal employee or an outside member attends.
     The University's on-campus indirect cost research rate of 55.8
percent is considered average for schools in the Northeast. According
to the April 24, 1991 Chronicle of Higher Education, rates at 100
institutions ranged from 77 percent at Harvard Medical School to 37
percent at Utah State University.
     In 1990-91, the University expended $47.8 million in external
funds for instruction, research and service. The 1991-92 estimate is
$53 million.
                                        -Cornelia Weil

     New indirect cost rates
     Effective July 1

     RESEARCH               1991-92   1992-93
       ON CAMPUS
         Federal             56.0%     55.8%
         State               41.0%     41.0%
         Commercial          88.0%     88.0%
       OFF CAMPUS
         Federal             32.0%     26.0%
         State               23.0%     23.0%
       COLLEGE OF AGRICULTURAL SCIENCES
         Federal             46.0%     45.8%
         State               31.0%     31.0%

     PUBLIC SERVICE         1991-92   1992-93
       Federal               35.0%     36.9% (1)
       State                 31.0%     31.0%

     (1) The negotiated rate was 37.0%.

     Note: The indirect cost rates for FY93 apply to awards and
renewals after 7/1/92. Existing accounts continue with current rates.
For further information on these rates, call Tom White, Sponsored
Programs Administration, at Extension 8001.