Collaborative Grant Expenditures

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Policy Number:

UW-3002

Old Policy Number:

MBO100

Responsible Office:

Madison Budget Office

University Policy

Rationale/​Purpose:

This policy provides requirements for the appropriate assignment and allocation of grant expenditures when collaboration between multiple units is involved.

Indirect costs are intended to support facilities and administrative costs. While a significant portion of the facilities and administrative cost associated with research grants are centralized, there are operational, lab maintenance and improvement costs as well as research equipment covered locally. Moreover, proposal preparation and reporting activities most commonly occur within the physical home of the research. For these reasons it is important to accurately reflect the unit providing the space and other support for the project to ensure that they are properly credited for their portion of facilities & administrative (F&A) return as calculated through the overhead allocation (historically referred to as capital exercise).

Moreover, aligning expenditures with the location of the research is generally the most efficient means of ensuring expenditures are allocable, necessary and reasonable for the research project.

Definitions:

Unit

For purposes of this policy, a department, sub-department defined within the university’s accounting structure, or research center.

Scope:

Extramural grant expenditures.

Policy:

1. Requirements

   1. Extramural research grant expenditures should be recorded in the cost center of the unit housing the research.
   2. Multi-investigator grants carried out as separate projects in different units must record activity associated with the respective subproject to the cost center of the appropriate unit.
   3. Annual overhead allocation is calculated based on research expenditures and facilities & administrative (F&A, also referred to as indirect cost or IDC) costs by cost center.
   4. Overhead allocation calculations will credit the divisions identified in cost center hierarchy Level 5 (CCHL5) associated with the grant worktag.
   5. Arrangements for re-allocation of overhead funding outside of this policy is not supported by central campus administrative units.
   6. Grants are applied for and administered through the unit best able to support the needs of the program (e.g., providing the majority of the research space or infrastructure).
   7. The unit serving as primary home (owning unit) for a grant is responsible for overall management of the award, including monitoring subprojects and fiscal management of the overall award.
   8. Campus will determine the owning division based on the CCHL5 associated with grant worktag.
   9. Other units spending on subprojects established through additional grant worktags must adhere to expectations regarding dollar limitations provided by the owning unit (e.g., prompt transfer of inappropriate charges to other fund sources).
   10. The overhead allocation calculation will attribute 10% of the grant expenditures to the principal investigator (PI) home division.
       1. The PI home division is the division identified in the default payroll funding for the PI.
       2. There will be only one home division identified for each PI.
       3. Sub-projects (additional grant worktags) must not be created for the sole purpose of accounting for PI salary (as was required under the previous collaborative grants expenditure policy).
   11. If there is a need to credit a collaborating unit for substantial work on a grant project, the method for doing so is to establish a separate grant worktag in the official university financial system.  
   12. The owning unit is responsible for proper fiscal management of the overall award.
   13. The owning unit may choose to forgo the use of additional grant worktags for collaborations expected to fall below an annual threshold amount of $20,000, inclusive of all costs such as salary, fringe benefit costs, supplies, equipment, and travel.

2. Exceptions

   1. During on-campus faculty relocation or other transitions existing grants may remain in their original administrative home. New grant proposals should be run through the appropriate unit based on where the grant will be housed and administered if awarded. Instructional grants are generally best administered in the tenure home where the faculty teaching responsibility lies.
   2. Some divisions and units have specified expectations regarding the appointment home for their graduate students, particularly during the period of predissertation status (typically the first two years of training). This policy does not overrule those division or unit expectations.
   3. There may be other unique circumstances that should be addressed through exceptions agreed upon by the affected units and dean’s offices with the concurrence of the owners of this policy.

3. Resolution of Disputes

   In cases where the application of this policy is in dispute, the Madison Budget Office will be the final authority.

Policy Administration

Approval Authority:

Vice Chancellor for Finance and Administration

Policy Manager:

Associate Vice Chancellor for Finance

Contact:

Director, Madison Budget Office -- Email the Madison Budget Office at, mbo@vc.wisc.edu

Effective Date:

09-01-2019

Revised Dates:

11-28-2022, 08-14-2025

Reviewed Dates:

08-14-2025

Retrieved:

10-11-2025 18:26:34