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Indirect Costs (F&A)

It is a goal of the State of Texas to increase research activities within the state. Toward this end, the State allows state colleges and universities to retain earned facilities and administrative (indirect) costs (aka IDC or F&A). It is expected that this return will provide seed funding which will result in greater research activity and funding. UH has a policy of returning a portion of the earned F&A recovery on a pro-rata basis to the college that generated this income.

The following formulas apply to the portion of the funds that are returned to the generating units:

When a single investigator, department and college are involved, the F&A funds returned to operating units are distributed as follows. In the case of multiple principal investigators, multiple departments, or multiple colleges, each unit will participate on a proportionate basis, in accordance with the distribution identified on the transmittal form.

  • 56% to the college
  • 44% to the department

When a single institute, center or laboratory is included on the transmittal form, the F&A returned to the operating units will be distributed as follows. In the case of multiple principal investigators, multiple centers, or multiple colleges, each unit will participate in accordance with the distribution identified on the transmittal form.

  • 26% to the college
  • 74% to the institute

When both a department and formal institute, center or laboratory are acknowledged on the transmittal form, the F&A funds returned will be distributed as follows. In the case of multiple principal investigators, multiple centers, multiple departments, or multiple colleges, each unit will participate on a proportionate basis, in accordance with the distribution identified on the transmittal form.

  • 26% to the college
  • 74% to the institute and department, divided proportionately as identified on the transmittal form.

For an institute to participate in F&A return, the following must have taken place:

  • The institute must have been formally established and approved by the college, Research Council, and by the President.
  • The names of all faculty cooperating in the institute must be provided to OCG.
  • Proposals for external funding have been signed by the appropriate department chair (s), dean(s) and institute director(s) before processing.

Records of earned F&A and the distribution of the return will be made annually by the Division of Research. No annual distributions will be made of amounts under $100; if such instances occur, those funds will be distributed to the next higher unit.

Funds are to be expended to enhance the university’s research efforts. The following are examples of appropriate uses of returned F&A funds:

  • Conducting early pre-grant feasibility studies;
  • preparing competitive proposals for sponsored programs;
  • providing carryover funding for research teams to provide continuity between externally funded projects;
  • supporting new researchers pending external funding;
  • engaging in research programs of critical interest to the general welfare of the citizens of this state;
  • purchasing capital equipment directly related to expanding the research capability of the institution; and/or
  • Research or project administrative costs.