Policy: MIT does not waive or reduce the F&A costs of any sponsored research project.
If MIT’s F&A rate is 65% of MTDC and a research sponsor limits overhead charges to 50% of MTDC, there is a 15% UR of full F&A.
If MIT’s F&A rate is 65% of MTDC and a research sponsor limits overhead charges to 20% of TDC, there is likely to be a UR depending on how much spending occurs in F&A-bearing cost elements.
- Confirm that sponsor policy does not permit full recovery of the current negotiated F&A rate
- Prepare the proposal budget in accordance with sponsor guidelines for sponsor-approved rate and base, (generally TDC or MTDC)
- Calculate the underrecovery (UR) of F&A for each year of the project period
- Enter the amount and source of funds that will cover UR in Kuali Coeus (KC). Whether using a summary budget or a detailed budget, the distribution of Underrecovery by year must be entered in KC at the Underrecovery Distribution screen. A description of the sponsor’s cap on indirect costs should also be entered on the Budget Summary page under Comments (for example: “sponsor limits indirect costs to 10% of TDC”. See the documentation at the Kuali Coeus site.
- DLC may use unrestricted funds for the difference between the federally negotiated rate and the sponsor-allowed rate
- If DLC is assuming responsibility for UR but has not yet identified the source, the DLC responsibility code 0000004 should be shown as the “source.” At award, DLC must provide the specific cost object number(s) for the anticipated source(s) of funds
- In KC, the DLC should provide any specific wording to describe the UR plans that need to be included in KC Indirect Cost Comments, to feed the Data Warehouse reports
- If there is more than one investigator or DLC committing sources of funding, those investigators or DLCs must provide, in KC, the separate amount and source of funds information provided by those investigators or DLCs should be included in KC and the proposal should route through the investigator's DLC(s), so they can approve the source of UR funding.
What sources can the DLC use to cover the UR?
- Discretionary cost object(s) identified by the DLC, School, or Provost
- Released general (this source for F&A UR requires approval by a representative of the appropriate Dean)
- Sponsor-funded facility costs in lieu of, or in addition to, F&A (this source requires prior communication with the RAS Contract Administrator regarding the estimate of facility costs to be included in the proposal)
- Vice President for Research’s UR budget (the KC proposal requires an approval by a representative of the appropriate Dean or VPR)