(1) The purpose of this document is to outline the application and management of the indirect costs applied to externally funded activities to ensure Charles Sturt University (the University) meets the requirements of the Competition and Consumer Act 2010. (2) This revised procedure replaces the previous competitive neutrality levy (CNL) and research infrastructure levy (RIL). (3) The University operates in an environment where cost recovery principles are applied, including indirect costs (previously levies). (4) This procedure supports the Finance Management Policy. (5) The ‘Infrastructure Levy Policy’ was implemented in 1999 in response to the Commonwealth Government’s Policy of Competitive Neutrality and the recommendations of the National Federation Reform Council, which seeks to ensure that government businesses do not gain an advantage over private sector competitors. (6) The Research Infrastructure Levy was implemented in September 2020 to replace the Infrastructure Levy Policy for Research. The intention of the change was to bring the University in line with the university research sector and ensure sufficient funding is available to enable the University to continue to provide a high-quality research environment. (7) Advantages arise from a range of sources, such as the University's tax-free status, shared infrastructure, and resources (i.e. payroll, finance, legal services, and IT) which typically underwrite the direct costs of activities. (8) Commercial activities within the University are required to recognise and charge a competitive amount for services, rather than at a reduced-price base that arises from being part of a large, government-funded institution. (9) An activity’s total cost is the sum of the full direct and indirect costs. Total cost principles are established to inform price settings for all external activities. (10) Instances that do not include the total cost (direct + indirect) implicate the University by not meeting our obligations under the Competition and Consumer Act 2010 and devalue the activities which impact the financial viability and quality. (11) The University’s activities can be divided into discrete areas for the application of indirect costs and contributions. Refer to attachment table 1 – University Activities. (12) Staff engaged by the University may undertake private consultancies subject to the provision of the Employment Conditions Procedure - Additional Employment and University Consultancies. (13) The University indirect cost (UIC), previously infrastructure levy, recovers the indirect costs (overhead or infrastructure costs) of the institution that cannot be easily allocated to single projects but must be recognised in line with competitive neutrality principles. (14) The UIC incorporates an allocation for faculty/institute indirect support referred to as program and faculty administration cost (PFAC). The PFAC accounts for the management of externally funded activities through indirect costs of the faculty office, school staff time and resources consumed during the life of the program (i.e. Faculty Executive Officer, Strategic Projects Officer, Faculty Operation Team, School Executive Support Officer). (15) Refer to attachment table 2 - Non-research activity - University Indirect Cost (UIC) for rates. (16) The UIC must be added to non-research activities at the time of costing (program cost (direct) + UIC). (17) The UIC does not apply to reimbursements, donations, or research activities covered in the ‘Research activities’ heading in this procedure. Refer to the ‘In-kind and indirect cost recovery reduction’ heading below. (18) When entering a new commercial arrangement or renegotiating existing agreements with a partner institute, the maximum UIC is to be included. (19) The following applies to activities that meet the definition of research. Refer to ‘Non-research – University Indirect Cost (UIC)’ heading for all other activities. (20) Refer to attachment table 3 - Research Activities for rates. (21) Where laboratory and high-cost facilities are identified as not required, the administering unit may apply a percentage greater than the minimum of 25%. (22) Where funding guidelines restrict the percentage chargeable to less than 25%, the funding guidelines take precedence. Under these circumstances, the indirect costs percentages will be recovered in the above order (first to Deputy Vice-Chancellor (Research), then to the project administering organisational unit), up to the maximum allowable. (23) Indirect costs will apply unless one of the following exemption categories are met: (24) In instances where the indirect cost recovery rate of the funding provider is less than the University’s minimum indirect cost recovery rates stipulated in the ‘University indirect cost (UIC)’ and ‘Research activities’ headings, the difference is considered an in-kind contribution by the University. (25) All program costings are to recognise the equivalent dollar value of in-kind where external project funding for indirect costs is equal to or below 51% of direct costs. This recognises the University’s subsidisation of indirect costs from alternate funding sources (the costing tool will auto-calculate). (26) An application to request approval of in-kind is only required for relevant activities when the cost recovery rate is below the minimum % of direct cost (refer to attachment table 4 - In-kind and indirect cost recovery reduction). (27) Requests for in-kind are to be submitted seeking prior approval in line with Delegation Schedule C - Finance, on the application template (refer to Section 4 below): (28) An in-kind request may not be approved if submitted to the University after a funding application has been provided to the funding body. This may result in a reduction to the budget available to fund project direct costs. (29) Approved in-kind is to be stipulated clearly in reporting and submissions as a ‘University in-kind contribution.’ This recognises the total cost and subsidisation from University funds. (30) The following principles are established as a minimum (direct or in-kind) for all programs (for Research, these are to be considered in line with research activities in 23 and funding guidelines): (31) The appropriate percent set at or above the minimum threshold is to be applied to the total direct cost during the costing process. (32) This will inform the price setting, is included as part of the total invoiced amount, and ensures that the correct allocation occurs in line with the applied calculation methodology. (33) A costing tool will be developed to assist with this process (Refer to Section 4 below) and used as supporting evidence when the indirect costs are transferred to the relevant GL codes. (34) Please refer to attachment heading 5 - Applying indirect cost recovery for the flow chart which outlines the process for distribution and an example in calculation of in-kind under the section of UIC. (35) The following resources support this procedure (36) For additional information, please contact the relevant area below: (37) For the purpose of this procedure:Finance Procedure - Cost Recovery
Section 1 - Purpose
Section 2 - Policy
Section 3 - Procedure
Background
University activities
Non-research activity - University indirect cost (UIC)
Research activities
In-kind and indirect cost recovery reduction
Other costing principles
Applying indirect cost recovery
Section 4 - Guidelines and other resources
Non-research activities
Contact email
Faculty of Arts and Education
FinanceFOAE@csu.edu.au
Faculty of Business, Justice and Behavioural Sciences
FinanceFOBJBS@csu.edu.au
Faculty of Science and Health
FinanceFOSH@csu.edu.au
Divisions and general queries
FinanceMS@csu.edu.au
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Research activities
Contact email
Grant development (research)
research-preaward@csu.edu.au
Research (Finance Business Partner)
Financersch@csu.edu.au
Research institutes (Finance Business Partner)
Fininstitute@csu.edu.au
Section 5 - Glossary
collective term for research grants, contract research, and consultancy.
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