If Stanford is to maintain long-term financial stability, restricted and designated funds must contribute to the cost of the University’s infrastructure. Activities supported by designated and restricted funds represent a significant percentage of the University’s total activity. General funds alone cannot bear the full burden of the infrastructure and administrative costs required to support these activities. The purpose of the infrastructure charge is to recover a portion of these costs.
For designated funds, the infrastructure charge will be applied at the time funds are received from all external revenue sources. For restricted funds (expendable gift funds, endowment income funds and sponsored project funds that carry an F&A rate of 0%), the infrastructure charge will be applied at the time funds are expended or transferred.
Gifts for building projects are waived from the infrastructure charges. Gifts of donated capital equipment are waived from infrastructure. However, restricted funds used to purchase capital equipment will be assessed ISC.
The infrastructure charge collected from non formula schools will be credited 75% to a central university PFOO (controlled by the budget office) and 25% to a central PFOO owned by the budget unit involved in the transaction. The infrastructure charge collected from formula schools and auxiliaries will be credited directly to a central PFOO belonging to the formula school or auxiliary.
Any exceptions to the policy require approval of both the Provost and the Chief Financial Officer and are to occur rarely, if at all.
This guide provides additional detail implementing Administrative Guide Memo 37.3 Infrastructure Charges.
The Infrastructure Charge
Designated funds are assessed the infrastructure charge on revenue in General Ledger codes 43xxx, 44xxx and 46xxx. The charge will appear on the fund statement only in General Ledger codes 48990 or 48992.
Expendable gift and endowment income funds are assessed the infrastructure charge on expenditures and fund transfers including transfers to operating budgets and designated funds. The charge on expenditures will appear in expenditure types 58915 or 58935 on the expenditure statement. The charge on fund transfers will appear in General Ledger codes 49710 or 49720 on the fund statement only.
Expendable gift and endowment income funds marked "Donor Exempt" prior to September 1, 2005 are waived from infrastructure. All other expendable gift and endowment income funds are subject to the revised infrastructure policy.
Non-government and foreign government sponsored project awards are assessed the infrastructure charge on expenditures. The charge on expenditures will appear in expenditure types 58915 or 58935:
Operating budgets, budget pools, service centers, auxiliaries, miscellaneous receivables, reserves, pending funds, US government sponsored projects, University research, plant, student loans, agency and living trust funds/awards, and the SLAC National Accelerator Laboratory are waived from infrastructure by the revised policy.
- The utility charge has been discontinued.
See Related Links section below for schedules defining the infrastructure policy in detail.
Infrastructure Exemptions and Waivers
Exemptions and waivers of infrastructure are given by the Provost and CFO and are expected to occur rarely, if at all. If the source of funds, typically a donor or sponsor, will not pay the infrastructure charge, the department or office may request to pay the charge themselves by applying to the Budget Office for permission to use an alternate PTA (project/task/award). Departments must use the "Request for Infrastructure Exemption" form. The alternate source of funds must be able to support an expense of this nature. Designated, endowment income or expendable funds may be used. Sponsored projects may not be used. See additional guidelines concerning sponsored projects and exemptions below. If the exemption is not granted by the Provost and the Chief Financial Officer, the funds must be refused.
Any questions about requesting a waiver to the revised ISC Policy should be directed to Dana Shelley in the Budget Office at extension 5-1256.
A waiver of F&A (indirect costs) granted by the Dean of Research does not waive infrastructure.
Infrastructure and Sponsored Projects
The revised Infrastructure Charge Policy applies to sponsored project awards assessed an F&A rate of 0%. Awards with F&A rates between 0% and 8% are not charged infrastructure but instead are charged their negotiated F&A rates.
Sponsored project awards are subject to the revised Infrastructure Charge Policy as follows:
The infrastructure charge is waived on all US government -- funded sponsored project awards. This includes awards directly funded by a federal, state, or local governmental agency and awards that are funded on a “flow-through” basis using government monies.
The infrastructure charge is exempted (e.g., an alternate PTA is provided by the PI/department to pay the ISC charge) on all non-government sponsored project awards where the sponsor has a written policy stating that it does not pay indirect costs.
Effective 9/1/05, if a sponsor/program is not waived or exempted under the rules listed above, the PI/administering department must include the infrastructure charge in their proposal/budget request to the sponsor. Institutional officials are responsible for reviewing proposals to make sure that the charge has been included prior to endorsing the proposal on behalf of Stanford, or that an approved “exemption” (see below) is on file.
If a sponsor/program is not exempted as outlined above, the department may request to pay the infrastructure via an alternate PTA by submitting a "Request for Infrastructure Exemption" form to the Provost Office. Exemptions must be approved in advance of submission of a proposal.
Obligated funds remaining at the expiration of a fixed price sponsored project that are transferred to a departmental PTA on or after September 1, 1999, are not subject to the infrastructure charge provided the funds were assessed an F&A rate of 8% or greater. These funds are transferred to a departmental PTA, less the facilities and administrative costs (formerly referred to as indirect costs) that would have been assessed on additional project expenditures.
Institutional allowances associated with fellowships are exempt from infrastructure. Best practices recommend the institutional allowance should be spent on the sponsored award. However, the schools and departments may transfer the allowance to an existing PTA where the expenditure will not be assessed infrastructure. Please contact your OSR representative for additional guidance.