Policies and Procedures Impacting Sponsored Projects

In addition to UC Office of the President (UCOP) policies outlined in the UC Contract and Grant Manual and any specific sponsor guidelines, including Uniform Guidance (Title 2 of the Code of Federal Regulations (CFR)) and applicable Federal Acquisition Regulations (FAR), the following internal policies apply to sponsored projects submitted on behalf of UC Santa Cruz.

Proposal deadlines

In order to ensure superior quality of service for our faculty and researchers, a manageable workload for our staff, and a streamlined process, internal deadlines have been established for proposal submissions.

Learn more about these deadlines.

Facilities and Administrative (indirect cost) rates

Facilities and Administrative (F&A) costs, also known as indirect costs or overhead, represent project expenses that cannot be easily identified with any specific sponsored project’s scope, but are incurred for common or joint objectives related to all sponsored projects at UC Santa Cruz. It would be difficult to calculate and charge every sponsored project an exact amount for space and utilities used or the amount of staff time associated with processing payroll for project employees, so the university negotiates F&A rates with the U.S. Department of Health & Human Services, the cognizant federal agency overseeing the administration of sponsored agreements at UC Santa Cruz. These negotiated rates are applied, as appropriate, to sponsored projects awarded to the university. Please note: Under Uniform Guidance (§200.414 (c)1), the negotiated rates must be accepted by all federal awarding agencies, unless a different rate is required by federal statute or regulation or approved by a federal awarding agency head or delegate.

Current rate agreement

Rate %On or Off CampusType of RateDates
56%On-campusOrg Research07/01/2024 to 06/30/2025
26%Off-campusOrg Research07/01/2022 to 06/30/2026
57%On-campusInstruction07/01/2022 to 06/30/2026
26%Off-campusInstruction07/01/2022 to 06/30/2026
27%On-campusOther Sponsored Activity07/01/2022 to 06/30/2026
20%Off-campusOther Sponsored Activity07/01/2022 to 06/30/2026
9%Off-campusIntergovernmental Personnel Act07/01/2022 to 06/30/2026
Different rate types

UC Santa Cruz’s negotiated rate agreements include three different kinds of F&A rates, as defined by Uniform Guidance Appendix III to Part 200: Organized Research, Instruction, and Other Sponsored Activity.

Organized Research

  • Defined as all research and development activities of an institution that are separately budgeted and accounted for and are  funded by external federal and non-federal organizations. 
  • Includes the training of individuals in research techniques (“research training”) where such training activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.

Instruction

  • Defined as the teaching and training activities of an institution. 
  • Except for research training described above, includes all teaching and training activities (includes credit and non-credit, academic and non-academic programs) 
  • Includes Sponsored instruction and Training (specific instructional or training activity established by grant, contract, or cooperative agreement). 

Other sponsored activities

  • Defined as programs and projects financed by federal and non-federal agencies and organizations which involve the performance of work other than instruction and organized research. 
  • Examples: health service projects, community service programs, cultural or artistic events or programs.
On-campus vs. off-campus F&A rates

The application of F&A rates allows UC Santa Cruz to recover certain costs (e.g., facilities, utilities, libraries, administration, student services, etc.) associated with externally-funded training and research activity.

On-campus F&A rate  

  • The primary rate that UC Santa Cruz applies to externally-sponsored projects. 
  • Used when the sponsor allows UC Santa Cruz to recover its full negotiated rate (i.e., most government and corporate funders), most or all of the work is being conducted on UC Santa Cruz academic lands or facilities, and/or the work is using UC Santa Cruz resources.

Off-campus F&A rate: 

  • Used when most or all of the project’s activity is conducted throughout the project period at facilities not owned or leased by the university. 
  • Must be used if leased space and leased costs are directly charged to the project.Cannot be used for donated space in an individual’s private residence without approval from campus Real Estate Services.

If the project is conducted partially on and partially off campus, the university will determine which rate to use based on where 75% or more of the work takes place. The university will evaluate the extent to which university systems, resources, facilities, personnel, and students are being used throughout the project to make this determination.

Both on-campus and off-campus rates may be used for a given project under certain circumstances. Contact your OSP proposal administrator for additional guidance.

If a sponsor’s IDC policy does not allow UC Santa Cruz to recover its full rate, a waiver may be requested from the Vice Chancellor for Research or designee.

Application of F&A rates using modified Total Direct Costs or Total Direct Costs

Your proposal administrator will help you determine and correctly calculate the indirect cost rates on a project budget during the proposal preparation process. These calculations are guided by Uniform Guidance costing principles (2 CFR 200 Subpart E) and UCOP policy on multi-campus agreements with other UCs, and will use a Modified Total Direct Cost base, unless an exception has been granted. More about calculating indirect cost recovery.

Modified Total Direct Costs (MTDC), as defined in Uniform Guidance, means indirect costs can be recovered on all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes 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 $25,000.

The MTDC base shall be used when a federal sponsor allows full IDC recovery, or the published F&A rate is less than the current full DHHS-negotiated rate, but does not specify a base.

Total Direct Costs (TDC) represent all allocable project costs that are directly charged to an award (excluding IDC). The TDC base allows for the recovery of indirect costs on all direct costs. The TDC base shall be used when a federal sponsor prescribes use of the TDC base, or when a non-federal sponsor’s published F&A rate is less than the current full DHHS-negotiated rate.

Exceptions to standard indirect cost recovery

PI Exception to Policy

UCOP policy outlines who can serve as principal investigator (PI) on a sponsored project submission. To read more about who may serve as a PI and the process for requesting an exception to this policy from the vice chancellor for research, visit the Office of Research PI Exception to Policy page

Cost sharing/matching funds

What is cost sharing (or matching funds)?

Cost sharing (sometimes also referred to as matching funds) is the portion of a project or program cost borne by the institution, and not paid by the sponsor. It is the university’s share in the cost of conducting the project/program. Cost sharing occurs when a sponsor requires or the university commits in a proposal funds beyond those awarded by the sponsoring agency to support a particular grant or contract.

Cost share in federal proposals

Under federal research proposals, cost sharing is typically not expected. If it is not required by the solicitation, it cannot be used as a factor during the merit review of applications or proposals. Some programs may require cost sharing, if it is in accordance with agency regulations and specified in the notice of funding opportunity. If the sponsor requires cost sharing as part of the proposal, this is considered mandatory cost sharing. If the sponsor does not require cost sharing as part of the proposal, but the university commits it, this is considered voluntary committed cost sharing. Both types of cost sharing become mandatory and committed once the proposal is funded. 

When cost sharing is required by the sponsor, the obligation must be met using non-sponsored funds. Only charges that would be allowable as direct costs to the award are allowable as cost sharing. Other sponsored funds may not be used as a cost sharing source unless prior written approval has been received from both funders.

See 2 CFR 200.306 of Uniform Guidance for more information on cost share and federal proposals.

Types of cost share

The “cost share” commitment may be a fixed amount of money, a percentage of the project costs, or the commitment of a specified level of effort. There are two main types of cost sharing that must be tracked by the university when included in a proposal:

  • Mandatory: Cost sharing that the sponsor requires as a condition of the award.
    • For example, if the total cost of a project is $150,000, the sponsor might award $100,000 and require that the university provide (or find an outside source to provide) the additional $50,000 from non-federal funding sources.
    • The sponsor may require the university to provide either a fixed amount of money or a percentage of the total project costs as cost sharing.
  • Voluntary Committed: Cost sharing that the PI commits in the project proposal budget or the budget justification that is not required by the sponsor. However, if voluntary cost share is committed in a proposal, the cost share becomes mandatory if the proposal is awarded.
    • The university discourages cost sharing commitments when not required by the sponsor.
    • The commitment is quantified as a dollar amount.

UCSC institutional and/or other sources of anticipated project support which are not committed at a fixed amount should be discussed with your proposal administrator to ensure unintentional committed cost share is not included in a proposal.

Cost sharing guidelines

UCOP Chapter 5 outlines policy on cost share for the university. 

The cost share budget template may be used in determining cost share budget totals. Download this .xlsm file and enable macros to use this template.

Firm commitments

In some cases, a sponsor may provide notification of intent to fund an award prior to the release of an official notice of award. A firm comment to establish a fund number can be requested if a PI has, in writing from the sponsor, a start date, the requested dollar amount to be spent (not exceeding three months), and an unrestricted fund with available funds as back-up to guarantee the funding if the award does not materialize. If a PI wishes to request a firm commitment, they should contact their OSP contract and grant officer to discuss.

Foreign currency

Proposals submitted to, and awards funded by, international sponsors may present a challenge when it comes to dealing with the likely fluctuations in the currencies of the two partners. The value of any currency can shift dramatically over time due to a variety of reasons and introduces risk to sponsored projects paid in foreign currency. OSP will attempt to reduce the risk to the university via negotiated award terms or internal informed consent agreements. 

Charging faculty salary to extramural funds

When allowed by a sponsor, and in accordance with UCSC policy, a portion of a faculty’s salary may be charged to extramural funds. However, this does not reduce their teaching, research, or service responsibilities. For more information on this policy, see the memo regarding charging faculty salaries to extramural research funds.

Last modified: Jul 18, 2024