15.2 Indirect (F&A) Cost Waivers

Establishes policy to apply the University's negotiated indirect  (F&A) cost rate to all externally-sponsored projects by categories defined in RPH: Categories of Sponsored Projects. Presents procedures to apply for a waiver of that rate for specific proposals, and criteria on which waiver decisions are made.

Contact

Questions about this policy can be answered by:

Kenneth Merritt

Director of Research Administration and Compliance

Vice Provost and Dean of Research

1. Applicability

Stanford's policy is to apply the University's negotiated indirect (F&A) cost rate  to all externally-sponsored projects.

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2. Roles and Responsibilities

The fiscal management of sponsored projects, including the application of appropriate indirect cost rates in proposed project budgets and management of awarded projects within budget and funding limitations, is the responsibility of the PI.

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3. Waivers

In certain circumstances, the Vice Provost and Dean of Research or assignees may approve full or partial waivers of the indirect (F&A) cost normally incurred by sponsored projects. However, such waivers will not be considered for projects where the sponsor is:

  • a for-profit organization, whether US or international; or
  • an office or agency of a foreign government, including organizations funded by that government

    Indirect (F&A) cost waivers or reductions are not granted to remedy incorrect classifications of costs. PIs may request supplemental funding from sponsors, however such requests are rarely granted.

 

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4. Pre-Approved Exceptions

Some programs or sponsors are pre-approved by Stanford for a waiver of a portion or all of our indirect (F&A) cost recovery. In most cases, these programs or sponsors require such a waiver as a condition of the award. The Office of the Vice Provost and Dean of Research maintains a list of such programs and sponsors. The list can be found in the Stanford Electronic Research Administration (SeRA) system

Stanford recognizes that many non-profit institutions have their own policies regarding the use of their funds for overhead expenses. In the case where the non-profit has an official written and publicly disclosed policy in this regard that is applied on a consistent basis, or where a public solicitation for proposals defines a limit on indirect cost recovery as a condition of the program, Stanford will normally accept those requirements. If not on the list, please send the link to the sponsor's policy and evidence of its non-profit status to: dor_research_compliance_group@lists.stanford.edu, and it might be eligible to add to the pre-approved waiver list.  If it is not a public policy available on the web, a project-specific waiver will need to be requested.

Note: In cases where Stanford's agreement to accept a lower indirect (F&A) rate is based on our understanding of the sponsor's policy, and where Stanford becomes aware of a higher indirect (F&A) cost rate paid by that sponsor to another recipient, the university reserves the right to apply the higher rate to that sponsor's Stanford projects.

Keep the following in mind when preparing a proposal to a non-profit:

  • For some foundations, Stanford requires clearance through the University Corporate and Foundation Relations office prior to submission of any proposal.  
  • In the case of non-profits based outside of the United States, or those established as an arm of a for-profit organization, indirect cost waivers will not be pre-approved; such requests will be considered only on a case-by-case basis (see below). In these cases, care must be taken to determine the non-profit status of the sponsor. The PI should confer with his/her pre-award office or the Dean of Research Office in advance to determine the applicability of indirect costs.
  • Indirect (F&A) costs will not normally be waived solely because a non-profit has expressed a desire to limit the use of its funds for a particular award to Stanford. Unless the program solicitation includes such a limitation for all recipients, or the non-profit has an official written and publicly disclosed policy in this regard, a waiver will not be pre-approved. In such cases, a case-by-case waiver may be requested.

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5. Case-by-Case Exceptions

The Dean of Research Office will consider other requests for indirect (F&A) cost waivers only in very limited circumstances. [NOTE: This approval authority is delegated to the Dean of the School of Medicine for projects to be administered within the School of Medicine.]

Special requests must be approved by the PI and school dean's office before being routed for approval to the Dean of Research Office. The decision whether to grant or deny an exception request is at the sole discretion of the Vice Provost and Dean of Research or assignees, or the Medical School Dean for projects in that school. In determining the institutional costs and benefits of such requests, the Dean of Research may take any or all of the following into consideration:

  • equity of granting the waiver when the projects of other faculty carry full overhead
  • total cost to Stanford
  • likelihood that an award would be seriously jeopardized without a waiver, and the potential effect of the loss on the faculty member's overall research program
  • benefit of the waiver to new or junior faculty members or in support of research efforts in new directions which otherwise might not be sufficiently developed to attract typical peer-reviewed awards
  • effect of a waiver to increase direct costs available for student support

Outside of the School of Medicine,  indirect (F&A) cost waiver requests can be launched from the budget page of the PDRF (Proposal and Development Routing Form) in SeRA.

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6. Infrastructure Charge Policy

A waiver of indirect (F&A) cost recovery under the terms of this policy does not waive the University's infrastructure charge collected on the expenditure of restricted dollars on non-federal sponsored projects.

The application of the infrastructure charge and specific exemptions are discussed in Administrative Guide Memo 3.3.1. See below in Related Items.

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