What are indirect costs and how are they charged?
A. Indirect costs represent IIT’s costs of administering grants and contracts that are not easily identifiable. It includes costs such as equipment and building depreciation, operation and maintenance of facilities, departmental administration, library usage, and general and administrative costs. The federal indirect cost rates are negotiated periodically with the Department of Health and Human Services, in accordance OMB Circular A-21, based on a proposal that IIT submits. Federal agencies generally use the negotiated rates, except for programs with lower rates that are congressionally mandated. Non-federal sponsors may use rates different from the negotiated rates. If a sponsor does not allow for IIT’s negotiated indirect cost rate, OSRP will need a copy of sponsor guidelines to determine the indirect cost rate allowed on a proposal. Indirect costs are automatically recorded in FRS at the end of each month by multiplying the indirect cost rate incorporated in the award by the monthly
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