User-Submitted Question: Calculating Indirect Cost Recovery

VUMC requires grant applicants to include indirect cost (IDC) recovery in accordance with sponsor guidelines. It is important to carefully read the sponsor’s funding opportunity announcement (FOA) regarding its budgetary guidelines when determining your budget calculation with IDC recovery. Calculating IDC recovery will look different depending on what method you use to determine your budget. The two main types of calculations used to determine budgets include: Modified Total Direct Cost (MTDC) Total Direct Cost (TDC) MTDC is the calculation used for almost all federal grants. This budget method omits some direct costs from the indirect cost calculation: these are known as “exclusions.” Exclusions include the following items: capital expenditures, equipment, tuition remission, each subcontract portion over $25,000, rental costs of off-site facilities, participant support costs, patient care charges, and fellowships/scholarships. VUMC’s IDC federal rate agreement can be found on the homepage of OSP’s website under “Forms” or by clicking here. Calculating MTDC to determine IDC recovery: While the total direct

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