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Indirect Costs and Fringe Benefits

Indirect Costs:

Indirect Costs, Overhead, or Facilities and Administrative Costs (F&A Costs) are costs that are incurred in conducting or supporting research or other externally-funded activities that cannot be directly attributed or efficiently charged as direct costs to a specific sponsored project. General categories of these types of expenses are general administration costs (i.e. accounting, payroll, purchasing), sponsored project administration costs, utility costs, depreciation, building maintenance, etc.

The amount of indirect costs charged to an award is based on a rate that normally reflects Wellesley College's current negotiated and federally approved rate. This rate is periodically renegotiated with the Department of Health and Human Services and applied to a specific pool of costs. Occasionally, if the terms of an award require, a different rate will be applied based on negotiations during the pre-award stage of the award.

Our current Federally negotiated F&A Cost Rates are:

* Off-Campus refers to activities performed in facilities not owned by Wellesley College and to which rent is directly allocated to the project. If more than 50% of a project is performed off-campus, the off campus rate will apply to the entire project.

Fringe Benefits:

Along with the Indirect Cost Rate, a Fringe benefit rate can also be applied to a sponsored award. The Fringe Benefit Rate charged to a grant fund will be determined by the source of the funding and the type of employee being paid.

Each year the College revisits the fringe benefit rate it charges to College funds. This rate is based on the actual costs of benefits provided by the College and the amount of salaries paid to benefited and benefited employees. However, the fringe rate we are allowed to charge to Federal awards is only renegotiated periodically at the same time the Indirect Cost Proposal is submitted. In addition, the two rates differ in what benefits can be included in the fringe rate calculation (i.e. the federal rate does not allow for certain tuition benefits to be included). As a result, we are faced with having to use two different Fringe Benefit rates.

The current Fringe Benefit rates charged to Sponsored Awards are:

Government awards include all federal, state, and local government sourced awards.

Questions regarding the Indirect Cost Rate and the Fringe Benefit rate should be referred to Jim Sullivan in the Controller's Office.

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