NOTE: PEN & INK CHANGES EFFECTIVE SEPTEMBER 1, 2001
AT PARAGRAPH NUMBER'S 1, 4, 9, 12, 14, & 16

1. The Texas Education Code, Chapter 145.001, Grants and Research Expenses, provides that specified state institutions shall retain and deposit or invest any funds received from a funding entity designated for paying overhead expenses of conducting research. The Code states that no more than 50% of funds received for paying for overhead costs may be applied to the general revenue funds to be appropriated to an institution in such a way as to reduce the general revenue to be appropriated to it. In addition, the Code states that no less than 50% of the funds that are retained, but not applied to reduce general revenue appropriations, shall be expended under guidelines approved by the institution's governing board for projects encouraging further research at the unit, agency or department level at which the research was conducted. The following policy provides the procedural guidance by which the Office of Sponsored Programs (OSP) and the Office of Grants Accounting (OGA) at Texas State will distribute up to 50% of the recovered indirect costs (overhead costs) in support of research.
   

2. The State of Texas encourages incentives to increase research activities through the dedication of a portion of the recovered indirect costs (RIDC) to the unit responsible for generating the IDC. Distribution at the college, department, and principal investigator level meets this objective.
   
3. Although the State's current policy is to use 50% of the recovered IDC to reduce general revenue appropriations, the intent of the University is to apply 100% of the total IDC recovered by the University in support of research efforts.
   
4. If the total IDC recovered by the university is equal to or less than $500,000, all of the recovered IDC in excess of the $200,000 to be distributed as indicated in this PPS will be used to support the operations of the Office of Sponsored Programs (OSP) and the Office of Grants Accounting (OGA). When the amount of recovered IDC exceeds $500,000, 40% of the total recovered IDC will be distributed according to the guidelines of this PPS, and the balance will be used to support the operations of OSP, OGA, and other support offices identified by the President 's Cabinet as needing special funding because of the impact that research support activities place on ongoing office operations.
   

5. The term indirect cost (often referred to by the federal government as Facilities & Administration Cost) refers to those costs that cannot be charged to a grant or contract as a direct cost. These costs include, but are not limited to:
   
   1. Depreciation and use allowances
      
   2. General administration and general expenses
      
   3. Sponsored projects administration expenses
      
   4. Operation and maintenance expenses
      
   5. Library expenses, departmental administration expenses and student administration expenses
      
6. Texas State must, on a periodic basis, negotiate an indirect cost rate with the federal government. This rate allows the university to collect a predetermined percentage of a grant or contract, to offset the actual cost of conducting the proposed research. The term “recovered indirect costs” (RIDC) refers to those indirect costs that have been recovered to date from a funded grant or contract.
   

7. It is the intent of Texas State and a requirement of the State of Texas that RIDC funds be expended to enhance the university's research efforts and include, but are not necessarily limited to, the following purposes:
   
   1. Conducting pre-grant feasibility studies
      
   2. Preparing competitive proposals for sponsored programs
      
   3. Providing carry over funding for research efforts to provide continuity between externally funded projects
      
   4. Supporting new researchers pending external funding
      
   5. Purchasing capital equipment directly related to expanding the research capability of the institution
      
   6. Research or project administrative costs

8. Institutes or centers may be established at the department, college, or university level in accordance with PPS 1.14.
   
9. No distribution of RIDC will be made by OSP and OGA to institutes or centers operating at the department or college level. Any return of RIDC to these entities will be determined by the appropriate Chair and/or Dean.
   
10. For a center or institute to participate in distribution of RIDC, the steps listed below must be followed:
    
    1. The center or institute must be formally established and approved by current Texas State policy.
       
    2. The center or institute must have a scope and mission that extends beyond the boundary of any one department or college and should serve the needs of at least two, and preferably more colleges. The director of the center or institute should report to the level of an Associate Vice President or higher.
       
    3. Proposals for external funding will require the signature of the PI(s), center or institute director, the appropriate Associate Vice President and, if applicable, the signature(s) of the Dean(s) of any collaborating college(s) and department chair(s).

DISTRIBUTION OF RECOVERED INDIRECT COSTS

11. If the total IDC recovered by the university is equal to or less than $500,000, the amount of IDC distributed will be $200,000. When the amount of RIDC exceeds $500,000, 40% of the total amount recovered will be distributed as per policy guidelines.
    
12. Forty percent (40%) of the total indirect costs recovered during the fiscal year (September 1 through August 31) will be distributed in October of the following fiscal year by the Office of Sponsored Programs and the Office of Grants Accounting as per the following methods:
    
    1. When a single investigator, department, and college are involved:
       
       1. 35 % to the college
          
       2. 25 % to the department
          
       3. 20 % to the PI
          
       4. 20 % to OSP
          
    2. When multiple investigators, departments, and colleges are involved:
       
       1. 35 % to the college(s) on a pro rata basis determined at time of proposal submittal
          
       2. 25 % to the department(s) on a pro rata basis determined at time of proposal submittal
          
       3. 20 % to the principal investigator(s) on a pro rata basis determined at time of proposal submittal
          
       4. 20 % to OSP
          
    3. When a university level center or institute as defined in Paragraph 10 is the generating unit:
       
       1. 20 % to the center or institute
          
       2. 20 % to the principal investigator (PI)
          
       3. 35 % to college, if applicable; if not, distributed equally to PI and center or institute
          
       4. 25 % to department, if applicable; if not, distributed equally to PI and center or institute
          
13. Forty-five percent (45%) of the total indirect cost recovered from funded projects submitted by a doctoral granting department will be returned to that department.
    
14. Ten percent (10%) or for the case of doctoral programs five percent (5%) of the total RIDC will be used to support SWT's federal legislative research agenda and other research related needs as determined by the Associate Vice President for Research.
    
15. Records of RIDC and distribution thereof will be kept on an annual basis by the Office of Grants Accounting.
    

16. A written report to the Associate Vice President for Research will be made annually (due October 30, one year after receipt of funds) from each unit that received RIDC. The report will describe how funds were used and how this funding has benefited research at SWT. OSP will make this information available for campus-wide review.