Rules on calculating modified total direct costs clarified

Keys of various sizes from a disassembled calculator are scattered on a woodgrain surface. Keys with discernible text include the square root key, "OFF," "cos," "X," "8," "7," "6," "/', "M in" "MODE," "+," "sin," "[(---," "tan," "+/-," the exponent key, "EXP," "C," "MR," and "K out." Arranged in the center, is are the keys that form the number sentence, "6-2=4."

In an October 7 post on Miami’s new indirect cost rates, it was pointed out that indirect cost rates are applied to modified total direct costs (MTDC). The list of budget items excluded from MTDC that was provided in that post has caused some confusion, and we’d like to clarify.

MTDC are generally calculated by excluding the following: capital equipment, patient care costs, tuition remission, rental cost of off-site facilities, scholarships and fellowships, and that portion of each subcontract in excess of $25,000. The October 7 post indicated that participant support costs are excluded from MTDC, but this is true only in the case of proposals submitted to the National Science Foundation (NSF). All other agencies, unless specified in the agency guidelines, include participant support costs as part of MTDC.

As always, if you have any questions about calculating MTDC, indirect cost rates, or other budget items, please contact your OARS consultant.

Written by Jim Oris, Associate Provost for Research & Scholarship, Miami University.

Calculator key image by Cellular Immunity, via Flickr.  $100 bill image by TaxCredits.net, via Flickr.  Both images used under Creative Commons license.

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