Excluding Expenses from Indirect Costs on Sponsored Project Awards

Issue/Question

Which expenses should be excluded from indirect costs on sponsored project awards?

Environment

• Sponsored Project Awards
• Expenses 
• Modified Total Direct Cost (MTDC

Resolution

1. For federal awards, the negotiated federal IDC rate, called Modified Total Direct Cost (MTDC), excludes the following expense categories:
   • Equipment
   • Capital expenditures
   • Patient care
   • Tuition remission
   • Rental of off-site facilities
   • Scholarships and fellowships
   • Subcontracts in excess of $25k each
   • Participant Support Costs
2. Other Awards
   • For all other awards, the IDC rate and exclusions vary
     •  After receiving the award, Sponsored Projects Finance (SPF) reads the award document and sets up the IDC rate and exclusions in the accounting system
     • Always refer to your award documents for specific exclusions

Note: Award agreements dictate which expenses are exempt from indirect cost (IDC) charges.