The University’s Indirect Cost Rate Agreement, negotiated with the Department of Health and Human Services and dated 9/27/24: Indirect Cost Rate Agreement.

Indirect costs are those costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project. The recovery of indirect costs reimburses UConn for actual costs incurred by support functions to sponsored programs at the University. The University negotiates its rate, which is based on Modified Total Direct Costs (MTDC), with the Department of Health & Human Services.

It is the policy of the University to collect full indirect costs at the federally negotiated rates from all funding sources whenever possible.  Occasionally, sponsors may specify an indirect cost policy inconsistent with the University’s negotiated rate, and budgets should be prepared using the sponsor rate. Only the Office of the Vice President for Research has the authority to accept a reimbursement rate other than the negotiated rate.

Effective 9/27/24:

• UConn’s Modified Total Direct Cost (MTDC) base has been updated to raise the threshold for inclusion of subaward dollars from $25,000 to $50,000, effective 7/1/25 (see below). As a result, the first $50,000 of the total amount of each subaward budgeted for inclusion after 7/1/25 should be included in the base when calculating indirect costs using an MTDC base (see Definition below).
• Current awards will continue to utilize the IDC rate in effect at the time of the initial award;
• New awards may continue to use the proposed rate (if lower), if allowed by the sponsor.

Indirect Cost Rates

*Indirect costs are calculated on Modified Total Direct Cost (MTDC) which is Direct Costs minus certain exclusions. Direct Costs include salary, fringe benefits, materials and supplies, travel, and the first $50,000 of each subcontract (after 7/1/25).

Exclusions include equipment over $5,000**, rent, fellowships, tuition, participant support costs and subcontract amounts beyond the first $50,000 for each subcontract (after 7/1/25).

**In order to be consistent with State classification standards, the dollar threshold for capitalization of equipment at UConn is $5,000.

Modified Total Direct Cost (MTDC) Base Definition, Awards Beginning 7/1/2025 and Later:

Modified total direct costs, consisting of all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). Modified total direct costs shall exclude equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.

The following language should be used in all proposal budget justifications that include indirect costs using rates listed on the rate agreement, with adjustments for the budget periods being proposed:

“Indirect costs are based on University of Connecticut’s federally negotiated rates and are applied at a rate of 62.5% in Year 1, and 63.5% in Years 2-5 applied to a modified total direct cost (MTDC) base. Any applicable capital equipment, participant support, and subaward costs from the University of Connecticut to other organizations after the first $50,000 are excluded from the MTDC base calculation. The rates and exclusions are consistent with the University’s federally negotiated indirect cost rate agreement (DHHS, 9/27/2024).”

Total Direct Cost (TDC) Base:

When applying the indirect cost rate to a Total Direct Cost base, no exclusions apply; the budget justification language should be revised to correspond.

Off-Campus Rate

For all activities performed in facilities not owned by the institution and to which rent is directly allocated to the project(s), the off campus rate will apply. Grants or contracts will not be subject to more than one indirect cost rate.  If more than 50% of a project is performed off campus, the off campus rate should be applied to the entire project.

The off campus indirect cost rate can be budgeted as follows:

• If rent is directly charged to the project.
• If more than 50% of all program activities are performed off campus.   (with written confirmation from the PI).
• If the sponsor specifically requires the off-campus rate per the solicitation.

The on-campus rate is normally applied whenever the University leases or pays for space costs that are not direct charged to a grant or contract.

If you have questions, please contact your SPS Grants/Contracts Specialist.

Sponsor-Stated Limits

When the University collects indirect costs at less than the full federally negotiated rates,  indirect costs are charged to Total Direct Costs (including equipment, participant support costs, subcontracts, etc.,)  unless otherwise stated in the sponsor guidelines.

Funding from Connecticut State agency appropriations and local municipalities are charged a current reduced rate of 20%.  Indirect costs should be charged to Total Direct Costs.  If the Originating Sponsor is non-State, the full rate allowable by the originating/prime sponsor should be applied.

Reduction of F&A on Projects Having a Total Cost of $50k or Less

To allow for more buying power on small sponsored projects and to help foster smaller awards which may lead to additional funding, indirect costs on new awards received after October 1, 2017 with total costs of $50,000 or less, will be reduced to 20% or the difference between the full indirect cost rate and 20% will be distributed to the investigators indirect cost account.  Indirect costs are charged to Total Direct Costs (TDC) or Modified Total Direct Costs (MTDC),  as required by the specific sponsor or solicitation.

Sponsored Program Services (SPS) has developed guidance and FAQs on how this program is implemented.

Consistent Treatment of Costs:

Costs must be treated consistently.  Consistent treatment means that similar costs must be treated uniformly in the same manner as either a direct cost or as indirect costs.  Certain types of costs, such as the salaries of administrative and clerical staff, office supplies, and postage are normally treated as indirect costs; therefore, the same types of costs cannot be charged directly to federally sponsored agreements.

Definition

Cost sharing or matching on grants and contracts reflects the university’s contribution to the total costs of a sponsored research project. Cost sharing, therefore, represents the portion of the project costs not paid for by the sponsor. Mandatory cost sharing is required to be reported on the financial reports and to be supported through the accounting records.

General Information

Cost sharing should be limited to those situations where it is mandated by the sponsor. In certain circumstances, the University may determine that a contribution is necessary to ensure the success of a competitive award or competition. All cost sharing dollars require written approval from the source of the commitment.

The PI or department should refrain from making commitments voluntarily, as any promised cost share becomes part of the project cost, even if only mentioned in the narrative and not in the budget. Once awarded, the commitment will have to be tracked in the University’s accounting system and is subject to audit. Failure to comply with the cost-sharing commitment may result in a loss of funding.

Types of Cost Sharing

Typical examples of cost sharing include the percentage of personnel effort to be expended on the project; associated employee benefits; Graduate Research Assistant Tuition and un-recovered indirect costs. Costs incurred prior to the award are not allowable matches. Program income earned under an award may not count as cost sharing unless authorized by the sponsor.

Cash contributions are sources of funds from either internal or external sources.  University cost sharing is considered cash, as it can be accounted for from the University’s records. In-Kind contributions are non-cash contributions typically provided from outside sources such as donations of equipment, sub-contractors of time or facilities, or volunteer services.

Required Approval

Identification of the source of cost sharing is to be made at the time the proposal is submitted. Cost sharing/match accounts are to be set up for each grant as required and used to charge the cost sharing expense. These accounts should be established at the time the award is received and set up in the University’s KFS system.

For internal commitments, the “Cost Share Commitments” section on the Internal Proposal Review form should be completed and signed by the appropriate Unit/Department Head or Dean.

For external (“third party”) cost share, a letter of commitment signed by the contributing party’s authorized official is required.

Criteria for Cost Sharing Commitments

The Uniform Guidance  states that contributions, including cash and third party in-kind, are acceptable as cost-sharing contributions.

The cost sharing/match must meet a number of criteria to be accepted. The contribution must be:

• Verifiable from the recipient’s records. You will be asked to specify an account in the University’s accounting system (KFS);
• Not included as a contribution for any other project;
• Necessary and reasonable to accomplish the project’s objectives;
• Allowable under the Cost Principles;
• Not paid by the Federal Government under another award, except where authorized by Federal statute to be used as cost sharing or matching; and
• Provided for in the approved budget.

A periodic review of the financial statements will ensure that cost sharing commitments are being met and that unrestricted funds to cover the cost share commitment have been transferred in a timely manner to the cost sharing/match accounts. Transfers from unrestricted accounts to the cost sharing accounts should be made in the fiscal year in which the costs are to be incurred.

Fringe Benefits

• The University’s fringe benefit rates are negotiated with its cognizant agency (DHHS) and are part of UConn’s Colleges and Universities Rate Agreement.
• Fringe benefits will be charged at the applicable rate at the time the cost is incurred.
• Sponsored Program Fringe Benefit Rates are to be used when developing all sponsor and cost-share budgets (mandatory and voluntary).
• The following language is required in all proposal budget justifications that include fringe benefit costs using rates listed on the rate agreement:
  “The fringe benefit rates used in the proposal budget are based on the rates approved by the Department of Health and Human Services (DHHS, 9/27/2024) through FY25, and proposed for FY26 and beyond.”

Sponsored Program Fringe Benefit Rates and Projections (%)

* Employee rate category includes Faculty, Professional and Classified Staff, and Postdoctoral Associates
**Special Payroll Examples: Summer faculty, other state agency employees, state retirees, summer graduate students

• A 5% annual increase is recommended and should be applied to personnel salary projections for future budget years for all sponsors except NIH.
• A 3% annual increase is recommended and should be applied to personnel salary projections for future budget years for NIH.
• The months of June, July & August should be used for budgeting purposes for the Summer period
• Graduate assistant stipends below reflect annual increases for future budget years for all sponsors for August 2022 through May 2026.

Graduate Assistants

A full time graduate assistant devotes one-half time to studies (approximately 20 hours per week) and one half-time to graduate assistant duties. During the Summer period, graduate assistants are put on special payroll and can work 40 hours per week.  Refer to the Graduate School website for additional information regarding graduate assistants.  If applying for an individual fellowship or training grant from NIH, refer to the NRSA requirements for stipend, tuition, and institutional allowance.

Graduate Assistant Stipends

In accordance with the Graduate Employee Union Contract, the following stipends represent the minimum stipends for graduate assistants.  Estimates are for proposal development only^†

Graduate Assistant Stipend Level Description:

• LEVEL I – Graduate assistants with at least the baccalaureate degree.
• LEVEL II – Experienced graduate assistants in a doctoral program with at least the master’s degree or its equivalent in the field of graduate study. Equivalency consists of 30 graduate level content course credits of appropriate course work beyond the baccalaureate degree completed at the University of Connecticut, together with admission to a doctoral program.
• LEVEL III – For students with experience as graduate assistants who have at least the master’s degree or its equivalent and who have passed the doctoral general examination.

† Please refer to the Payroll website for updated stipend information.

Post Doctoral Fellow Stipends

• Below are the current National Research Service Award (NRSA) Post Doctoral Fellow stipend levels that should be taken into consideration when preparing your proposal budget. These stipend levels must be used when applying to the NRSA for support. Stipend levels can also be found on the NIH website / NOT-OD-25-105 (effective 5/16/25).
• Use of the stipend level which is consistent with the intended postdoctoral years of experience is recommended for use with other support sources, however, in accordance with University policy, the stipend level must at least be equal to the minimum NRSA rate.
• For more information, visit the Graduate School Post Doc Policies.

Student Labor Pay Scale

Student Labor and Work-Study are paid based on an established pay scale determined by the Office of Student Employment. The rate of pay for a position is based on the skills and level of experience required for the position, regardless of whether earnings are paid through the work-study or student labor payrolls. The pay rate is determined by the hiring supervisor and is subject to approval by the student employment staff in the Office of Student Financial Aid Services.

DHHS Salary Cap

Effective January 1, 2026, the DHHS salary limitation for Executive Level II has been increased to $228,000. For additional information, please refer to NIH Notices NOT-OD-26-034 and NOT-OD-26-038. Note this salary cap applies to all DHHS agencies.

We would love to hear from you. Please use the following links to reach the most appropriate staff persons in the Research Integrity & Compliance areas:

• Institutional Review Board (IRB)
• Institutional Animal Care and Use Committee (IACUC)
• Institutional Biosafety Committee (IBC)
• Financial Conflict of Interest (FCOI)
• Export Control
• Stem Cell Research Oversight Committee (SCRO)
• Research IT eRA Help Desk

Reporting Research Concerns

All concerns related to human research, animal research, conflict of interest, research misconduct, research financial accounting, research safety or other research compliance matters should be reported by calling Research Integrity and Compliance Services at 860-679-2230, Office of University Compliance at 860-486-2530, or the specific area.

Concerns can also be reported anonymously through the REPORTLINE by calling a toll-free number at (888) 685-2637 or via the REPORTLINE website. The REPORTLINE is available 24 hours a day, 365 days a year operated by a private (non-UConn) company. You may contact the hotline to report a concern without giving your name. You will be able to re-contact the REPORTLINE to track your report to provide further information at a later date or to obtain general updates about the status of your concern.

The University welcomes and encourages good-faith reporting. As such, individuals who submit a report or participate in a compliance investigation in good faith are provided protection from retaliation per the University’s Non-Retaliation Policy.

Additional information on reporting concerns can be found at the Office of University Compliance website.

Award Management (Post-Award)

Effort Reporting

Subawards

Incoming Contract Contact by Assigned Academic Unit

Email and Phone: preaward@uconn.edu / 860.486.3622

• Do you have a proposal-specific issue? Please contact your SPS assigned proposal reviewer (see below for portfolio assignments) for assistance via email or Teams call, since they will be most familiar with your proposal.
• Not sure who your assigned proposal reviewer is? For this or non-urgent matters, please email preaward@uconn.edu.
• For more urgent assistance, such as when you are unsure who is reviewing or you have been unable to reach your reviewer,
  please email spshelp@uconn.edu, or call 860.486.1023. Both are actively monitored during regular business hours.

Pre-Award Contact by Assigned Academic Unit

Post-Award Contact by Assigned Academic Unit