Underrecovery (U/R) of F&A may occur in any research account where indirect costs are established and limited by the sponsor at less than the current federal negotiated rate.
Budget development points:
- During proposal preparation, if a sponsor's policies dictate a rate and/or base that will result in overhead recovery below that which would be produced using the federal negotiated research rates, the Department, Lab, or Center (DLC) must prepare an estimate of the underrecovery of F&A for each year of the project period. This estimate is for internal purposes only and is not submitted to the sponsor with the proposal.
- The underrecovery funding source may be one or more of the following:
- Discretionary cost object(s) identified by the DLC, School, or Provost
- Released general funds (the use of released general funds for F&A U/R requires approval by a representative of the appropriate Dean)
- Sponsor-funded facility costs in lieu of, or in addition to, F&A
- Vice President for Research's (VPR's) U/R budget account 1733000.
Anticipated underrecoveries associated with NIH Training Grants are funded by the Institute and do not need to be analyzed at the proposal stage
See Underrecovery for a comprehensive discussion of underrecovery.