The following paragraphs will briefly explain what indirect costs are, who audits and approves the rates, and the policy and rate to apply to various types of awards or awards from specific sponsors.
Indirect cost rates for all federal grants and contracts are computed on the basis of actual costs incurred and regulations from the U.S. Office of Management and Budget that define the cost categories that are eligible for reimbursement. Indirect cost reimbursement rates are periodically negotiated with our cognizant federal audit agency, the Department of Health and Human Services (DHHS). A signed agreement, that establishes the allowable rates of reimbursement, is entered into between the university and the government. These federally audited and approved rates are also applied to some categories of nonfederal awards as explained in each section.
All faculty and staff who engage in or propose to engage in sponsored projects; all extramural support received by UW–Madison, including all federal and nonfederal grants and contracts.
Proposals submitted jointly by the university and any of the governmental units in the Grants and Contracts - Other Governmental Units section of this policy to the federal government must include indirect costs on the university portion of the budget at the federal rate currently in effect.
A copy of the agency’s non-profit status as certified by the Internal Revenue Service may also be required.
Extramural funds received by the university that meet all of the following criteria will qualify as "gifts" and are not subject to indirect costs:
Extramurally funded activities that do not meet all of these criteria for designation as a gift will be treated as a Nonfederal grant or contract, subject to assessment of indirect costs as provided in this policy.
08-05-2021, 02-22-2023, 10-14-2024, 11-21-2024, 01-22-2025