How Facilities and Administrative
(Indirect) Costs are Applied to
Subcontracts
Definition/Background
Subcontracts typically are charged Facilities &
Administrative (indirect) costs on the first
$25,000 of each subcontract, per project period.
Applies to:
Subcontracts
Process Overview
- The portion of a subcontract that is subject to indirect costs
is indicated on each Notice to Establish Account
(NEA), if the grant includes indirect costs.
- Grant and Contract Accounting encumbers indirect
costs when the award is established. (This encumbrance is shown on
your budget with the code: BCSmmddyy, where mmddyy is the
date of the
NEA).
- Note: When the budget is established, what seems
to be a "double" encumbrance appears on your budget. The encumbered
amount is shown in both the Restricted Funds category (37-99) and in the
Indirect Cost category (25-99). As charges are posted to your budget,
both encumbrances are liquidated at the same time.
- On a quarterly basis, GCA manually charges indirect costs based upon
actual subcontract expenditures and reduces the encumbrances as the
subcontract is charged indirect cost.
- Note: If the indirect cost rate assigned to a budget changes
during the life of a subcontract, the rate charged is the rate in effect
at the time the charge is posted to the Budget Activity Report (BAR).
Department Responsibilities
To ensure that Notice to Establish Accounts (NEAs) are prepared
correctly:
- Be sure to include accurate information about subcontracts in your
budget proposal
- Regularly monitor and verify indirect cost adjustments posted on the
monthly Budget Activity Reports (BAR)
Departments should regularly monitor and verify indirect cost
encumbrances related to subcontracts by reviewing monthly Budget Status
Reports (BSRs). Discrepancies should be emailed to
gcaques@u.washington.edu
References/Regulations
Contacts
- Indirect cost policy and indirect costs
on proposals: osp@u.washington.edu
- Indirect costs charges and journal vouchers:
gcaques@u.washington.edu
