To:                   Deans, Directors, Department Heads, Faculty, and Staff
FROM:             Phillip B. Harris, Vice President for Administration
                        William A. Gern, Vice President for Research and Economic Development 
DATE:             November 15, 2006 

RE:                  NEW INDIRECT COST RATES APPLICABLE THROUGH JUNE 30, 2010  

New indirect cost rates have been negotiated with the U.S. Department of Health and Human Services and will remain in effect through June 30, 2010.  While the indirect cost rate is retroactive to July 1, 2006, current projects will continue to be assessed at their current rate.  Proposals submitted prior to this notice will be assessed at the indirect cost rate in the proposal budget. 

Federal cost principles for educational institutions dictate that the recovery of indirect costs be based on modified total direct costs (MTDC).  Indirect costs are assessed against all items in the budget (salaries, fringe benefits, materials, and supplies, services, travel, and subgrants and subcontracts up to the first $25,000)  EXCEPT:   

            1)         individual items of equipment costing in excess of $5,000
            2)         graduate student tuition, fees, and health insurance
            3)         subcontracts in excess of $25,000 (the initial $25,000 of each subcontract must be assessed indirect costs)            4)         rental costs 

The approved rates for the period July 1, 2006 through June 30, 2010 are as follows: 
                        On-campus organized research                          43%
                        Instruction/educational services                          51.1%
                        Other sponsored projects                                   33.5%
                        Off-campus research or instruction                    see note below 

OFF-CAMPUS RATE:  Investigators who propose an off-campus project under these guidelines should contact the Office of Research (6-5320) for the approved rate. 

FRINGE BENEFITS:    Fringe benefits should be estimated at 40% of ALL non-student salaries.  Worker’s Compensation should be estimated at 1% of all student salaries.   Actual costs of employee benefits are charged to project budgets.   

STATE OF WYOMING AGENCIES AND WYOMING-BASED COMPANIES:  The University will continue to charge indirect costs at the rate of 20% of total direct costs for research, educational projects and service activities.