Indirect costs are those that are incurred for common or joint objectives to support a sponsored project. They are general costs usually associated with facilities, administration, and other shared services. These costs therefore cannot be identified readily and specifically for a particular sponsored project, an instructional activity, or other institutional activities. This page summarizes Lawrence Tech's indirect cost practices. Refer to the downloadable documents on this page for more detailed information.
Lawrence Tech has negotiated an approved provisional indirect cost rate with the Department of Health and Human Services for use on grants, contracts and other agreements with the federal government. The indirect cost rate agreement establishes a rate of 49% of modified total direct costs, excluding equipment over $5,000 and subcontracts for the portion over $25,000. Some funding agencies restrict or decline to pay indirect costs, and all such proposals must be approved by the Dean and Provost before being submitted.
Indirect Cost Categories
Indirect costs may fall into several categories summarized below. Please see the download documents for more details about each category, and consult with Finance & Administration to accurately incorporate indirect costs into your budget proposals.
- Facilities and Administration - Use allowances for buildings, equipment, capital improvements, and other expenses associated with facilities operations.
- Depreciation - Depreciation expenses associated with facilities, equipment, and capital improvements.
- Interest - Interest expenses associated with certain facilities, equipment, and capital improvements funded in whole or in part by loans.
- Operation and maintenance - Expenses associated with maintenance, janitorial services, utilities, furniture and equipment, insurance, and other related costs.
- General administration - Expenses associated with university administration in support of instruction, research, sponsored activities, or other normal university-wide operations.
- Departmental administration - Expenses associated with department administration in support of instruction, research, sponsored activities, or other normal departmental operations.
- Sponsored projects administration - Expenses associated with university-wide organizations supporting sponsored research.
- Library - Expenses associated with university-wide library services with the exception of expensive holdings of no value to sponsored research projects.
- Student administration and services - Expenses associated with university-wide student services.
Indirect cost revenue generated by sponsored grants and contracts are calculated monthly and transferred from restricted funds as follows:
- 25% - LTU Faculty member’s professional discretionary fund
- 25% - Dean’s discretionary fund for PI’s college
- 25% - Initiatives to support faculty research
- 25% - Lawrence Technological University general fund
Download Indirect Costs Background Information for an overview of how indirect costs are applied to research project.
Download Indirect Cost Disbursement for information on how indirect cost recovery funds are distributed at Lawrence Tech.