UCSC Budget Handbook
In addition to providing an overview of funds supporting UCSC, this publication refines and clarifies
the campus's operating budget processes and the principles by which resources are allocated, including
indirect cost receipts. [More]
Interactive ICR Model
A version of the model embedded in this page that opens in a new
window. [More]
Indirect cost recovery funds (i.e., ICR or "overhead") are monies received
by the university in reimbursement for services rendered in support of
grants and contracts. ICR funds are paid to the University by the
granting agencies as reimbursement for indirect support provided to the
grants and contracts. The UC Office of the President (UCOP)
distributes these funds to the campuses, after reserving a portion for
its own purposes. These purposes include the support of
multi-campus research organizations and the cost of operating the UCOP
itself.
Overhead reimbursement is tied to the expenditure of direct costs
associated research awards (primarily federal contracts and grants).
The amount is based on the indirect cost rate, which includes the cost
of facilities (such as equipment, research space, maintenance and
utilities, and the library) as well as departmental administration and
support. The current negotiated rate for the Santa Cruz campus is
51%. The “effective” rate (the amount actually generated as a
percentage of expenditures) is closer to about 27% because not all
federal contracts and grants generate overhead (i.e. equipment grants)
and sometimes the overhead is waived or is reduced. In general,
waivers and reductions are not encouraged and are no longer common.
Overhead is used to promote research, provide flexibility, and to cover
research-related costs. The Santa Cruz campus has adopted formulas
for managing and distributing its overhead receipts from federal and
private contracts and grants:
Off-the-top funds.
Incremental off-the-top funds are used to support activities
directly linked to the administration and support of research;
allocation of these
funds are incorporated into the annual budget process.
Opportunity funds. New
opportunity funds are distributed using the "40/40/15/5" formula.
The academic divisions receive 40%, based on changes in indirect costs
in the division; 40% is provided to the Provost/EVC for building
infrastructure costs, faculty start-up, and other funding needs; the
Vice Chancellor for Research receives 15% to seed further research,
and to support matching fund requests; and the Senate Committee on
Research receives 5% for faculty COR grants.
General Fund support. This
portion of the overhead is budgeted as University General Funds and
is used, along with State General Funds, to help fund the
University's budget.
Use the slider bar in the model below to explore how these formulas work.
Purpose: To help fund costs
associated with administering contracts and grants.
Purpose: To help bolster funding for
research activities, matching funds, infrastructure, capital, debt, etc.
Purpose: To help fund the General Fund
budget and to support fixed costs increases (e.g., inflation, merits,
range adjustments, etc.)
