I. General Comments

These guidelines are applicable to indirect cost pool programs for which an external funding source reimburses the indirect cost pool for some or all of the expenditures related to a new or an existing indirect activity.

II. Definitions

Direct Cost: A cost that can be identified specifically with a particular final cost objective.

Indirect Cost: Any cost that is not a direct cost or one that benefits more than one final cost objective, and thus must be allocated equitably to each benefiting cost objective.

Indirect Cost Pool Program: A program/account key used to group similar indirect costs incurred for the same general indirect cost pool. UCAR currently has six indirect cost pools to account for Benefits, Occupancy, UCAR G&A, NCAR G&A, UOP G&A, and WORI G&A.

III. Special Requirements

Because all external funding sources must pay their fair share of indirect costs, all reimbursable indirect cost activities (other than reimbursed Occupancy Cost Pool Activities) will be allocated UCAR G&A. In cases where the applicable UCAR G&A is not provided by the external funding source, the receiving division/program must provide for co-sponsorship or cost sharing of the UCAR G&A from another source. UCAR G&A cannot be waived on external funding.

IV. Procedures

When an administrator becomes aware of potential external funding for an indirect cost activity, a new Account Key Set Up Form must be completed and sent to Finance through the appropriate Budget Office. A written description of the type of indirect activity that will be funded should be attached to the Account Key Set Up Form. The Finance Office will work with the Administrator and the applicable Budget Office to ensure adequate justification and documentation for the reimbursable indirect cost pool designation. A complete list of Reimbursable Indirect Cost Pool Programs will be subject to a quarterly review by the Cost Accounting Committee.

All reimbursable indirect cost pool programs are accounted for in a separate account key. Because reimbursable indirect cosst pool programs are direct funded versus funded by indirect cost recovery, the funding source on the Account Key Set Up form should be labeled "OTHER" rather than "INDIRECT". Furthermore, because each reimbursable indirect cost program will be set up as a self-balancing account key (self-balancing contract) to facilitate the tracking of funds, each key will be labeled with a distinct contract such as "REIMB##".

V. Specific Examples:

NCAR Journal Editorships: Approximately 10 account keys have been approved by the CAC to be appropriately labeled Reimbursable Indirect Cost Programs. The rationale is that these programs would continue to exist, and be paid for out of the indirect cost pool recovery if they were not otherwise reimbursed. The entire NCAR direct funding base benefits from the Journal Editorship Programs.