Overhead Receipts

Executive Overview
UNCG Operating Resources
OVERHEAD RECEIPTS

Overhead receipts reimburse the University for Facilities and Administrative (F&A) costs, which include: laboratory and office space; utilities; administrative services (e.g., purchasing, accounting, research, administration, personnel security); custodial services; and building, grounds, and street maintenance. In other words, they include all those things essential to support sponsored research, which cannot be broken down and directly charged to a specific grant or contract. F&A cost percentages are currently set for a three-year period based on actual cost records audited and approved by the Federal Government. Although the rates may be revised where the sponsor administratively limits F&A cost recovery, they are not subject to arbitrary adjustment either by the University or the sponsor.

Unless prohibited by the funding agency, all requests for extra mural funding must include F&A costs. UNCG is currently on a modified total direct cost base for the F&A cost calculation.

Overhead receipts are currently included in institutional trust funds. Legislation was enacted in 1989 to gradually reduce the transfer to the State Operating Budget over a period of years until 1996-97 when it reached zero. At that point, overhead receipts were shifted to institutional trust funds.

The University adopted an overhead receipts allocation policy in 1985. The allocation policy is based on prior year revenues. The allocation of revenue according to the policy is as follows:

  • Salaries that support centralized contract and grant functions and that are approved by the Chancellor are initially allocated. This represents 12 percent of the total available revenues.
  • Approximately 20 percent is made available to the department generating the contracts and grants. Of this sum, half will be made available to the principal investigator.
  • The remainder (68 percent) is allocated by the Chancellor upon recommendation by the Provost, normally to support the teaching and research aims of the University.

Internally, the budgeting process is initiated early enough to allow a review of the proposed allocations. Projections of F&A cost receipts are made in April, and instructions for preparation of budget requests are distributed. After receipt of the proposed allocation requests, the Chancellor makes allocation decisions in June and the departmental budgets are established in the Financial Records System. Unspent funds remain in the account where they were originally allocated unless redirected by the Provost or Chancellor.