Why are indirect costs charged on grants?
All research institutions have an indirect costs assessment on grants (called “facilities and administrative costs”—F&A—by the federal government). This covers the overhead involved in administering sponsored projects–from library costs, to personnel costs involved in processing grant-related paperwork, to heating/cooling/lighting of the labs and offices used for grant projects. In practice, most universities, including SIUC, subsidize some of these overhead costs so that a portion of the recovered indirect can be used to support research activities on campus, such as seed grant programs, travel funds, and college/departmental research support. Any waiver of indirect means that the institution is subsidizing more of the project than it otherwise would. F&A rates are set by the federal government. SIUC’s rates are lower than those of most comparable research institutions, which may run to 60% or more.
