Indirect Cost Recovery Funds - Financial Policy - 31110

1.1 The purpose of this policy is to establish guidelines for the appropriate use of indirect cost recovery funds derived from grant funding. Indirect costs are necessary expenses that support the overall infrastructure of the organization and ensure the effective management and administration of grant-funded projects.

2.1 The Director of Finance is responsible for submitting an indirect cost rate proposal to the Department of Health and Human Services as required. Refer to the most recent Colleges and Universities Rate Agreement for the current rates for on-campus and off-campus projects. The Colleges and Universities Rate Agreement also contains current definitions for on- and off-campus activity.

2.2 Whenever allowable by a granting agency, Germanna Community College grant proposals should include the full federally negotiated indirect cost rate. Project leads interested in requesting less than the full allowable indirect cost rate in a grant proposal or omitting indirect costs from a proposal must submit a request for approval to Cabinet. 

3.1 This policy applies to all grants administered by Germanna Community College or wherein Germanna Community College is a subrecipient. It is intended to ensure that indirect cost recovery funds are utilized in a manner that aligns with the organization’s strategic goals and priorities.

3.2 Allocation of Indirect Costs

Indirect cost recovery obtained through grant funding shall be allocated primarily to support equipment and services and key staff involved in the management, administration, and strategic oversight of grants who are not compensated directly by grant funding. These funds will be used to cover: 

1. Materials, equipment and software for grant activity: Items and services that support grant activity may be funded through indirect cost recovery.
2. Principal Investigator (PI) Compensation: PIs are eligible for a stipend in accordance with PI compensation guidance. In cases where PIs are ineligible for compensation through direct grant funds, indirect cost recovery funds may fulfill part or the entirety of the stipends. PI compensation will be reviewed annually, and funds will be distributed in equal proportions to all eligible PIs at the date of review. Indirect Cost recovery shall not be used for PI stipends if PI compensation is allowable through direct grant funds.
3. Salary and fringe for Coordinator of Grants and External Funding: Responsible for overseeing the grant application process, managing compliance and reporting, supporting principal investigators throughout the grant award lifespan, and liaising with funding agencies.
4. Salary and fringe for Strategic Initiatives Accountant: Responsible for the financial management of grant funds, including budgeting, financial reporting, and ensuring compliance with financial regulations.
5. Supplemental Support: Any additional indirect recovery funds exceeding the total cost of salary and benefits for the Coordinator of Grants and External Funding and Strategic Initiatives Accountant; eligible PI stipends; and materials, equipment, and software that support grant activity, will be allocated to support administrative services and activities related to the management and administration of grants, as deemed necessary by the organization’s leadership. Cabinet will review allocation of indirect cost recovery funds annually.

In the event that total indirect cost recovery funds do not meet or exceed the salary and benefits of the Coordinator of Grants and External Funding and Strategic Initiatives Accountant, the total funds will be divided evenly between the two roles and related fringe.

3.3 The use of indirect cost recovery must comply with all applicable federal, state, and local regulations, as well as the specific terms and conditions outlined in each grant agreement.

3.4 Reporting on allocation of indirect cost recovery funds will be conducted annually. Use of funds will be monitored regularly to ensure funds are use appropriately and comply with all applicable regulations.

3.5 The Indirect Cost Recovery Funds Policy will be reviewed and approved annually by Cabinet.

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1. Indirect Costs: Costs that are not directly attributable to a specific project but are necessary for the general operation of the college, such as utilities, administrative support, and facility upkeep.
2. Indirect Cost Recovery (ICR): Reimbursement of institutional overhead costs that is recovered from externally funded grants or contracts.

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Taylor Landrie, Special Assistant to the President for Strategic Initiatives

January 30, 2025