What are indirect costs (i.e. F&A / overhead)?
Indirect costs, also known as overhead and officially know as Facilities and Administrative costs (F&A) are costs that are incurred for common or joint objectives and therefore, cannot be identified readily and specifically with a particular sponsored project, instructional activity or any other institutional activity. They are real costs incurred by the institution that cannot be billed to individual projects. Examples of indirect costs include, but are not limited to, utilities to heat, cool and illuminate laboratories, library resources, central purchasing and payroll services, etc. A federally negotiated indirect cost (F&A) rate has been established to cover these expenditures. In addition, OMB Circular A-21 requires that certain costs be normally treated as indirect cost which means that they cannot be charged to a federally sponsored project. These costs include administrative and secretarial salaries, postage, office supplies, local telephone costs, memberships and subscriptions
