Effective: January 27, 2000
Revised: June 2016
Review Date: June 2018
Responsible Party: Chancellor
Purpose and Need
The pursuit of funds from outside agencies to initiate research or to assist in the development of programs and facilities is a high priority of the institution. It is, however, imperative that the ramifications of receiving a particular grant or contract have been fully analyzed before the application is submitted to an outside organization for review. University units which may be impacted by proposals should be consulted during the proposal development stage and, where feasible, fully involved in the writing process.
Proposals must clearly identify institutional benefits and more specifically how individual units will benefit from initiating the activities suggested.
Long-range commitments as well as strategies to deal with those commitments must be addressed.
Grants and contracts having a personal services component will set wages and wage increases (except as provided in Policy 850.2) based upon a best estimate of comparable wages and wage increases. The actual setting of the wages and wage increases will be consistent with wages and wage increases of other similar campus employees. All collective bargaining agreements will be honored.
All proposals must be reviewed by the appropriate Dean or Director, Vice Chancellor of Finance and Administration, Provost/Vice Chancellor for Academic Affairs, and be approved by the Chancellor, or the Chancellor's designee, before being submitted to an outside agency.
Indirect costs are those that are incurred in conducting sponsored activity at an educational institution. At Montana State University-Northern, some examples of indirect charges would be the services provided by offices such as Purchasing, Business Services, Payroll, Registrar's Office, use of office and/or laboratory space, library services, building and facilities maintenance, heat, light, power and janitorial services, administrative time spent by the academic units and administration.
Because indirect costs are specific kinds of costs, not all proposals will allow a request for indirect cost reimbursement from the sponsor. If indirect costs are not allowed by the sponsor, a copy of the sponsor's statement to that effect should be attached to the Proposal Clearance Form when it is submitted for approval. If the sponsor has an indirect cost rate which is different from the MSU-Northern federally audited rate, as is the case with agencies of state government, this too should be noted prominently on the Proposal Clearance Form. Since MSU-Northern's indirect cost rate is a negotiated rate, contact Business Services for the current rate before assembling your proposal budget.
An administrative fee of up to 10% on “Service Contracts” may be applied. These kinds of contracts have some program on campus providing some kind of service in collaboration with the private sector, but are not grants.
The full indirect cost rate will generally be applied on all proposals unless the funding agency prohibits indirect costs or has its own rates. A copy of the agency's rules limiting indirect costs must be attached to the Proposal Clearance Form.
In cases where restricted indirect cost rates are required, the program has a statutory requirement not to use federal funds to supplant state and local funding (See 34 CFR 75.568).
In special circumstances, the university may authorize the use of indirect costs to meet required cost sharing in grants and contracts.
Prior to submission of any proposal requiring matching funds, the principal investigator must have supporting evidence from the prospective grantor of the acceptability of matching funds as proposed.
Procedures for Submitting Proposal
Before a proposal may be forwarded to a sponsor, it must receive administrative approval. Your proposal will be reviewed by appropriate academic and administrative personnel for its compliance with various university, state and federal guidelines.
In order to expedite the administrative review process, the Proposal Clearance Form must be completed and signed to ensure that the proposal is properly routed, documented, reviewed and approved. The Proposal Clearance Form is an internal (MSU-Northern) document and does not necessarily need to be sent to the sponsor. One copy of the proposal, with a final budget, and the completed PCF must be submitted to and be approved by the Chancellor, or the Chancellor's designee, prior to submission to the sponsor.
Procedure for Indirect Cost Recovery Allocation
The following policy on indirect cost recoveries has been adopted by MSU-Northern. Please contact Business Services for details on how to manage the allocation of indirect costs recoveries.
The allocation of indirect costs from Grants and Contracts, where such IDCs are included, shall be as follows: 25% to the College or Program where a grant is administered, if applicable, and 75% to Business Services for financial administrative expenses for institutional expenses related to grant acquisition, and other disbursements deemed appropriate by the Vice Chancellor of Finance and Administration. Funds used should be related to grants or grants work.