Policy 143: Policy in the Indirect Costs Associated with Scholarly, Research and Creative (SRC) Funding

1. Purpose

Toronto Metropolitan University encourages and supports faculty, staff and students to undertake scholarly, research and creative (SRC) activity, and to apply for funds to support that SRC activity from external sponsors including the Canadian federal, provincial and municipal governments, foreign governments, foundations and community agencies, and from the private sector.

The costs of conducting SRC activities at Toronto Metropolitan includes not only the direct costs of the project but also indirect costs incurred by the University to provide the productive and operational infrastructure required to allow an SRC project to proceed. Indirect costs are a necessary and substantial component of support for SRC Activities.

To ensure sustainability of the University's SRC enterprise, the University is committed to the principle of recovering the full costs incurred in the support of SRC activities, including both direct and indirect costs through established rates, and to provide an equitable mechanism for the University to distribute the indirect costs within the University.

2. Application and Scope

This Policy applies to all SRC Activity conducted or proposed to be conducted at, or under the auspices of, the University using University personnel, students, premises, resources, services, facilities, and/or equipment.

While all SRC funding is subject to Indirect Costs, funding received from the Tri-agencies are supported by the federal Research Support Fund and as such the Indirect cost rates and distribution indicated in this Policy are not applied unless explicitly permitted in the relevant program.

The Policy does not apply to Gifts.

The Vice President, Research and Innovation is responsible for the administration of this Policy, is authorized to approve guidelines, regulations and procedures pursuant to this Policy and may, in unusual circumstances, approve modifications to the application of this Policy if they are satisfied that it is in the best interests of the University to do so.

3. Definitions

3.1. Direct Costs  are the costs of a project that can be identified and easily attributed to a particular activity including but not limited to salaries and benefits of project personnel, student stipends, materials and supplies, equipment, travel and publication and knowledge translation costs.

3.2. Indirect Costs are those costs that are necessary for maintaining an environment and infrastructure for conducting research and are incurred at the University, Faculty and Department levels for purposes common to multiple research projects, programs, or activities of the University, but which cannot be identified and charged directly to individual projects, programs, or activities with a reasonable degree of accuracy and/or without an inordinate amount of accounting.

They include:

• Building costs, maintenance and depreciation (including renovations required for specific laboratories, heating, cooling and lights);
• Maintenance, upgrading and depreciation of equipment purchased that enable faculty to undertake SRC activities;
• Faculty salaries and benefits, where these are not charged directly to an SRC project;
• University, Faculty and Departmental/School administration including but not limited to SRC grant support, payroll, human resources, accounting, purchasing and accounts receivable, insurance/risk management, occupational health and safety, legal;
• Library and other research resources, including research data, management support, dissemination and translation supports, information and data resources;
• Central computing services;
• Financing (e.g., payment, prior to the billing and receipt of revenue from a sponsor, of student or research technicians salaries or purchase of materials and supplies);
• Intellectual property assessment, management and advice.

3.3. Gift means financial or in-kind support of a charitable nature that is eligible for an official donation receipt as defined by the Canada Revenue

3.4. Grant means a mechanism for providing funding for SRC Activity where the sponsor provides the funding for a specific project. In determining whether SRC funding is provided as a Grant, the specific terms of the agreement or award must be considered regardless of the title of the agreement or award. The terms of such agreements or awards typically require minimal reporting, conditions or restrictions, including any terms respecting publication of the project results, disposition of intellectual property arising from the project, indemnities or liability. In other words, the researcher maintains responsibility for all aspects of the Grant.

3.5. SRC Activity  in this Policy means funded creative, scholarly, and/or knowledge-generating activities, whether fundamental or applied, whose primary objective is discovery, problem-solving, or to achieve some desired result that can be specified to a significant extent but that cannot be produced with existing knowledge. SRC Activity is undertaken in the course of an individual’s role at the University, and is made, discovered or developed using the University facilities, support personnel, support services, equipment, materials or funds, or otherwise under the auspices of the University.  

4. Policy

4.1 Recovery of Indirect Costs of SRC Activity

4.1.1.  The Indirect Cost rate applied to a specific SRC project should conform with the following rates:

4.1.1.1.  The rate for a Grant will be 10% of total Direct Costs.

4.1.1.2. The rate for industry and not-for-profit supported contract research will be 40% of total Direct Costs.

4.1.1.2.1.  The rate for partner (industry/not-for-profit) funding that is provided as a required match to government funding programs is 25% of total Direct Costs.

4.1.1.3.  Where an external partner (non Tri-agency) prescribes a different recovery rate in established terms or policy, the University will, as standard practice, follow those terms or policy.

4.1.1.4.  Funding received from the Tri-agencies are supported by the federal Research Support Fund and as such the Indirect cost rates indicated above should not be applied unless explicitly permitted in the relevant program.

4.1.1.5.  The applicable Indirect Costs rates are set regardless of the dollar value of the research agreement, nature of the partner organization, or intended use of funds. 

4.2 Distribution of Indirect Costs

4.2.1.  Recognizing that the University, Faculties and Departments/Schools all incur indirect costs related to SRC activities, SRC Indirect Costs received by the University as per section 4.1 of this Policy, shall be distributed as follows

4.2.2.  Notwithstanding the forgoing, Indirect Costs derived from SRC Activity obtained through or associated with Faculty or University research centres will be distributed as follows:

4.2.3.  Indirect Costs received in respect of a project will not be distributed until all costs associated with the project are paid, all funds are received from the sponsor, and all technical, scientific, financial or other reports have been submitted to and approved by the sponsor as required by the funding agreement

5. Related Documents

Policy 144: Research Centres

Related FAQs on Indirect Costs (OVPRI webpage)