• Section 1 - Purpose
• Background
• Scope
• Section 2 - Policy
• Allocation of Recovered Research Indirect Costs
• Exemptions, Waivers and Discounts
• Advice on this Policy
• Compliance and Breaches
• Section 3 - Procedures
• Section 4 - Guidelines
• Section 5 - Definitions

Section 1 - Purpose

(1) This Policy outlines the principles and procedures governing the allocation, recovery, and distribution of Indirect Costs associated with externally funded research at Macquarie University. The Policy ensures transparency, equity, and sustainability in supporting the goals of the University’s Research Strategy (2035) and strategic research priorities.

Background

(2) Research Indirect Costs are actual costs incurred by Macquarie University (the University) while undertaking and supporting research projects and consultancy services. These costs include access to buildings and research infrastructure, administrative support, and library resources.

(3) Analyses conducted by the University Office of Financial Services team indicated a range of real research project overheads incurred by the University of between 31% and 34% of direct project costs, regardless of the research discipline, project size, or complexity of design. Accordingly, a flat minimum rate of 25% has been set, which is intended to recover as much of the overhead expenses as is practical, with the view that more than this minimum can be requested from partners and funders where circumstances allow.

(4) While recognising the competitive funding pressures facing researchers, the University is a provider of high-quality and high-value research. Externally funded research projects must be appropriately costed and priced to reflect both the high quality of the University’s research, and the actual costs incurred in the conduct of research by including a mandatory contribution towards Research Indirect Costs unless an exemption, waiver or discount applies in accordance with this Policy.

Scope

(5) This Policy applies to all staff, students, Emeritus, Honorary, Adjunct, Visiting and Clinical Academics, and any other personnel involved in the costing, pricing, or conduct of externally funded research on behalf of the University including its controlled entities, including graduate research scholarships funded by external partners/collaborators. Research covered by this Policy includes all research activities administered by the University.

Section 2 - Policy

(6) The minimum Indirect Costs that must be recovered on all Funded Research Projects (see definition for more details) is 25% of the Direct Costs of the Research Project Budget (not including GST), unless an approved exemption, discount or waiver applies.

(7) Where this Policy is not applied correctly, resulting in Research Indirect Costs being omitted or undercalculated, cost recovery will still occur, and research project budgets will therefore be reduced. When calculating project costs and budgets and negotiating with external funders regarding project scope and pricing, researchers and research support staff must apply the minimum 25% Research Indirect Costs to the Direct Costs of the research project, unless the external provider and/or the project is specifically exempt under this Policy (see exemptions listed below).  In instances where an error in budgeting has occurred and thus the application of Indirect Costs has adverse impacts on the potential for success, researchers and research support staff must ensure that they liaise with the relevant Deputy Dean, Research and Innovation for advice. 

(8) In cases where a funding body specifies a fixed rate for Indirect Costs (for example, 10%), staff must ensure that the project budget incorporates Indirect Costs at the rate prescribed by the funder. Where necessary, the scope and scale of the project must be revised to ensure that the project remains viable after the required Indirect Costs have been applied.

Allocation of Recovered Research Indirect Costs

(9) 25% Research Indirect Costs, or whatever percentage is recoverable under the funding body’s rules (see Clause 8), will be distributed 40% centrally to the University’s budget bottom line and 60% to the Faculty of the Primary Chief Investigator (PCI). In cross-Faculty projects, researchers are encouraged to consult with Faculty Executive Directors to negotiate cross-Faculty distribution.

Exemptions, Waivers and Discounts

Exemptions to Recovery of Research Indirect Costs

(10) There are a number of allowable exemptions to Research Indirect Costs contribution requirements. These exemptions are automatic and do not require the submission of a waiver, however evidence of compliance will be required for certain exemptions. No contribution to Research Indirect Costs is required for:

1. any external funding scheme, including those offered by Trusts and Foundations, which specifies (in the publicly available funding rules, guidelines or funding agreement) that no research Indirect Costs or research overheads may be charged;
2. any Macquarie University internal grant scheme, including any partner contributions to support the internal funding scheme such as EPS or Co-funded fellowships;
3. the portion of a collaborative project/contract which is distributed to Macquarie University’s partner university or universities and other partner organisations;
4. project funding secured by Aboriginal and Torres Strait Islander researchers as part of the University’s commitment to building Indigenous research capability and capacity;
5. donations given to the University for research without being tied to a project or specific outcomes/deliverables;
6. funds received from a partner organisation for the sole purpose of a graduate research scholarship (stipends or tuition fees); and
7. partner organisation funding where contributions have been promised for an Australian Research Council (ARC) Linkage Project or NHMRC Partnership (or equivalent schemes that include external partners), which is subsequently unsuccessful, but where the partner wishes to invest some or all of the promised support to fund a preliminary phase of the project with a view to resubmission of the Linkage, or Partnerships Grant in a future round.

(11) Where staff are unsure as to whether an exemption applies, or what documentation is acceptable evidence of compliance, advice should be sought from the relevant research support staff: Grant Development Team; Research Partnerships Team; Trusts and Foundations Team; Faculty Research Office; School or Department Research Directors.  This consultation should occur before commencing partner negotiations or submission of a Grant application.

Waivers

(12) Waivers or reductions in Indirect Costs will be granted only under exceptional circumstances. Such concessions are rarely approved by the Deputy Vice-Chancellor (Research). Faculty Executive Deans have discretion to under this Policy to waive any or all of the faculty allocation, with the understanding that this will affect their faculty budget (net income). 

(13) Should a waiver be sought for the full amount of the Indirect Cost (Faculty + central contribution), both Executive Dean and the Deputy Vice-Chancellor (Research) (DVC(R))  must approve of the waiver request. 

(14) Waivers will not be allowed in instances where the University has provided institutional co-investment or co-funding to support the funded research, unless covered by one of the exemptions listed under Clause 10. 

Advice on this Policy

(15) The Officers responsible for responding to initial enquiries regarding exceptions, waivers or discounts to Research Indirect Costs prior to requesting Deputy Vice-Chancellor (Research) approval, and for providing interpretations of the provisions outlined in this Policy are:

1. for partnerships, contracted research, tenders, and consultancies facilitated by the Research Partnership Managers, email macquarie.partnerships@mq.edu.au;
2. for Grants and other competitive funding opportunities – Director, Research Grants and Awards via grant.development@mq.edu.au;
3. for philanthropic funding opportunities, email philanthropy.grants@mq.edu.au; and
4. for Faculty processes/guidelines to access retained or unspent funding, email:
   1. Faculty of Arts: artsro@mq.edu.au;
   2. Macquarie Business School: mqbs-ro@mq.edu.au;
   3. Faculty of Medicine, Health and Human Sciences: fmhhs.researchsupport@mq.edu.au;or
   4. Faculty of Science and Engineering: sci.research@mq.edu.au

Compliance and Breaches

(16) The University may commence disciplinary action for any proven breach of this Policy.

(17) Disciplinary measures for repeated breaches may include, but are not limited to:

1. refusal to consider any exemption, waiver, or discount under this Policy where the staff member could be reasonably expected to be aware of the Policy. This action would result in a project account being levied for the minimum applicable indirect costs of 25% regardless of whether the cost has been included in the budget;
2. deeming the staff member ineligible to apply for internal funding schemes for a certain period commensurate with the severity of the breaches;
3. deeming the staff member ineligible for internal funding support (e.g. PhD stipends, postdoctoral funding, DVCR Co-funding, administrative support) to enhance external funding applications for a certain period commensurate with the severity of the breaches; and
4. imposing restrictions on submission of Grants and approval of partnerships or research contracts.

Section 3 - Procedures

(18) Nil.

Section 4 - Guidelines

(19) Nil.

Section 5 - Definitions

(20) The following definitions apply for the purpose of this Policy:

1. Direct Costs means all costs incurred over the length of the project specifically for the purpose of the research, such as, but not limited to, staff costs (salary costs plus on-costs and any applicable loadings), travel and accommodation, consumables, maintenance, project management costs, specialized equipment that is purchased for the particular project in question, communications and IT, and subcontractors’ fees and expenses.
2. For the purposes of this Indirect Cost Policy, "Funded Research Projects" are defined as research activities supported by financial resources from external or internal sources. This includes:
   1. Competitive research grants awarded through national or international peer-reviewed schemes;
   2. Other public sector research funding from government departments or agencies;
   3. Industry and private sector research income, including contract research and consultancy;
   4. Cooperative Research Centre (CRC) projects and other collaborative ventures;
   5. Philanthropic, sponsorship, and donation-supported research;
   6. Funds received for a graduate research scholarship that support project costs, noting as per the exemption list, funds related to HDR scholarships (tuition and/or stipend) are exempt from indirect costs and
   7. Internally funded projects where the University provides financial support for research.
3. Grant - In the university sector, the term ‘Grant’ can have two different meanings:
   1. Funding for a project resulting from a formal (generally competitive) application process which is open to more than one organisation. These may be referred to as research projects or program grants. They commonly have rules attached as to how and on what items funding can be spent and generally have financial reporting or auditing requirements associated with them.
   2. A block funding amount provided to a university or research facility to support or defray overheads and infrastructure, equipment, facilities, or joint venture costs.
4. For the purposes of this Indirect Cost Policy, "Research" is defined as the creation of new knowledge and the application of existing knowledge in original ways to generate new concepts, methodologies, inventions, and understandings. Research includes, but is not limited to:
   1. Externally funded research projects and grants;
   2. Research consultancy and contract research undertaken for external organisations;
   3. Applied and translational research activities;
   4. Collaborative research with industry, government, and community partners;
   5. Scholarly and creative works that embody original investigation; and
   6. Supporting activities is essential to the conduct and dissemination of research.
5. Research Indirect Costs (also referred to as Indirect Costs) means overheads and other costs that provide necessary resources for the purpose of the project but are NOT specifically costed items dedicated to the project. Research Indirect Costs applied to a project are extra costs that are incurred to support the research project, and which would otherwise not be incurred if the research project did not exist. These costs primarily relate to the provision of:
   1. administrative and management services;
   2. contract negotiations and management services;
   3. buildings and physical infrastructure (including lighting, electricity, workspaces, stationery, facilities, maintenance and repair);
   4. research equipment and facilities that do not incur per use charges;
   5. information and communication technology (ICT) infrastructure (software, hardware, data storage and management, internet access;
   6. library access and services;
   7. internal research Grant schemes (Faculty and Central); and
   8. research training and development.
   9. Research Indirect Costs may also include costs associated with managing the relationship with the other parties involved in the project.
6. On-costs are defined as the statutory and contractual employment-related expenses that the University must pay in addition to an employee’s base salary. On-Costs include, but are not limited to, superannuation contributions, payroll tax, leave entitlements, workers’ compensation insurance, and other employment-related obligations. On-costs are mandatory costs associated with employing staff and are different to indirect costs.
7. For the purposes of this Indirect Cost Policy, a "Research Project Budget" is defined as the approved financial plan that sets out all direct costs required to conduct a research project. Direct costs are those that can be specifically attributed to the project and include, but are not limited to:
   1. Personnel salaries, stipends, and associated on-costs;
   2. Equipment purchases or usage fees;
   3. Consumables and materials;
   4. Travel and fieldwork expenses;
   5. Access to research facilities and specialist services;
   6. Dissemination and publication costs; and
   7. Other project-specific expenses necessary for the conduct of the research.