Northwestern University Indirect Cost Rate Agreement

Northwestern University, a private research institution located in Evanston, Illinois, is known for its world-renowned research programs across various disciplines. As a research-intensive university, Northwestern invests a significant amount of effort and resources in conducting research activities. However, conducting research activities requires more than just funding; it also involves managing indirect costs associated with the research.

Indirect costs, also known as Facilities and Administrative (F&A) costs, refer to the expenses that support research but are not directly attributed to a specific project. These costs include expenses for the maintenance of facilities, utilities, administrative support, and other services that are necessary for research activities. Northwestern University negotiates an Indirect Cost Rate Agreement with the federal government that governs how much indirect costs the university can recover from research sponsors.

A recent Indirect Cost Rate Agreement was negotiated between Northwestern University and the federal government, which went into effect on July 1, 2021. The agreement sets the maximum allowable indirect cost rate that Northwestern University can charge to sponsors of federally-funded research projects. The agreement stipulates that the maximum allowable rate for research projects funded by the National Institutes of Health (NIH) will be 60% of the total direct costs, and the maximum rate for other federal agencies will be 52% of the total direct costs.

This agreement helps to ensure that Northwestern University can recover the indirect costs associated with research activities while still maintaining a competitive edge in terms of research funding. By recovering a portion of the indirect costs, the university can allocate more resources towards research activities that directly impact the quality of research outcomes.

Understanding the indirect cost rate agreement is essential for researchers at Northwestern University. Researchers who apply for federal funding must include indirect costs in their proposal budgets to receive the full funding amount. Understanding the allowable indirect cost rate can help researchers to budget more effectively and maximize their research funding.

In summary, the Indirect Cost Rate Agreement between Northwestern University and the federal government is a critical component of funding research activities. It ensures that the university can recover the necessary indirect costs associated with research while remaining competitive in securing research funding. Researchers at Northwestern University should be aware of the allowable indirect cost rate and include these costs in their proposal budgets to maximize their funding potential.

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