Indirect Costs (F&A) Definition

Indirect costs (IDC), or Facilities and Administrative (F&A) costs, are university operational expenses not directly assignable to a specific project. According to the Office of Management and Budget's Uniform Guidance, these costs include:

• Building operations and maintenance
• Capital depreciation
• Departmental and central administration expenses

These costs benefit multiple project objectives and cannot be specifically attributed to a single sponsored project, but are essential for carrying out project activities. In particular, "those costs incurred for a common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefited.  Costs such as the operation and maintenance of buildings, capital depreciation, departmental and central administration which cannot be readily and specifically attributed to any single sponsored project, but which represent the University’s cost for carrying out the activities of the project, are indirect costs."

Indirect Cost Rates on Sponsored Proposals at WSU

Wayne State University negotiates its indirect cost (F&A) rates with the Department of Health and Human Services, which is the university’s cognizant federal agency. The currently approved negotiated rate specifies indirect cost rates for on-campus research, off-campus research, and other sponsored activities. These rates apply to all externally-sponsored projects, with exceptions outlined in the IDC Policy.

The rates are applied to a modified total direct cost (MTDC) base, which excludes expenses such as equipment, capital expenditures, patient care charges, rental costs, tuition remission, scholarships, fellowships, participant support costs, and the portion of any sub-award exceeding $25,000. Other exclusions may be made when necessary to prevent significant inequities in the distribution of indirect costs.

Current WSU Negotiated F&A Rates

IDC Types and Definitions:

Organized Research: All research and development activities including research sponsored by federal and non-federal agencies or other entities. For this purpose, research is defined as the discovery and interpretation of facts, revision of accepted theories, or the application of such new or revised theories, which also require separate accounting and reporting. This includes basic, applied, and developmental research.

Other Sponsored Activities: programs and projects financed by federal and non-federal agencies and organizations that involve the performance of work other than instruction and organized research.

On or Off Campus Determination