Overhead Revenue Sharing Policy
Indirect costs are distributed by the Finance Division in October or November of each year for the previous calendar year. For example, indirect costs generated from January – December 2016 will be distributed in October or November 2017.
The Policy
In order to provide faculty and staff with incentives for seeking external grants to support research and other academic and student needs, the University will annually create a pool of funds that will be distributed to Principal Investigators/Project Directors, Department Heads, Deans and the Office of Grants and Sponsored Projects. Such funds will be used to cover expenses that will enhance the University’s research, teaching, and student or grant activities. The principles that will apply to this process are outlined below.
- Since the indirect cost allowance included in grants is intended to reimburse the University for real costs incurred in connection with a grant and is subject to audit, it may not be used for other purposes. Therefore, University discretionary funds will be used to create a pool of funds for distribution.
- At the end of each calendar year, an amount that is equal to 60% of the total indirect costs, net of fringe benefits, generated on each external grant awarded during that calendar year will be allocated for inclusion in the budget for the next fiscal year. These discretionary funds will supplement, not supplant, annual University budget allocations.
- Allocations for each award will be made as follows: 10% to the PI/PD [through the Department], 10% to the Department Head, 10% to the Dean or Senior Area Officer if the grant is not in an academic area and 30% to the Grants Office. Amounts allocated may be carried over for two fiscal years. If they are unspent at the end of that period, they will be transferred to the appropriate Provost for discretionary use.
- The funds allocated may be used for any expenditure that will positively impact research, teaching and student or grant activities. Such costs may include the purchase of equipment or software, participation in conferences and workshops, adjunct faculty, consultants, undergraduate and/or graduate students, temporary clerical, lab or grant support, books, periodicals, supplies, stipends for assistance with proposal development, etc. Fringe benefits relating to compensation in ‘such costs,’ referred to in the previous sentence, will be charged to the overhead share as an additional cost. The appropriate Dean or Senior Area Officer will monitor expenditures for the PI/PDs and Department Heads. The appropriate Provost will monitor expenditures for the Deans and the Grants Office.
- None of the funds allocated may be used to increase or enhance the base salary of any University employee. Also, the funds may only be used for University related activities and may not be used for the direct personal benefits of an individual employee. All equipment purchased with these funds will remain the property of Fairleigh Dickinson University.
- It is the responsibility of the PI/PD to assure that a grant does not exceed its budget. In the case of a budget overrun or expenditure disallowance, the allocation first to the PI/PD, then the Department Head, the Dean and the Grants Office will be reduced by the amount of the overage or disallowance.
- The President, Provosts and Chief Financial Officer will periodically evaluate this policy, but not less frequently than every three years.
- This policy is effective as of January 1, 2000. Based on revenue generated from indirect costs on external grants awarded during the calendar year 2000, the first allocation of revenue will be included in the 2001/2002 fiscal year budget [distributed on July 1, 2001].