Reallocation of Overhead
(Last Updated 10/05/2004)
To assist departments with administrative costs related to endowments, gifts and privately sponsored grants and contracts paying full overhead, the Dean’s Office rebates to the department half of the overhead collected from these accounts each month. Qualifying accounts are in fund series 26xxx, 3xxxx, and 4xxxx with an overhead rate of 50% of total direct costs. Note that sponsored projects from nongovernmental sponsors (4xxxx fund series) that are subcontracts of federally funded projects will have federal F&A rates, based on modified total direct costs and varying from year to year, and are excluded from the reallocation process. Rebates are posted to LC 12 “Reallocation of Overhead” accounts (95xxx fund series) as credits on budget/object 98-85. Rebates lag the overhead charges by one month. That is, credits are posted mid-month based upon the previous month’s overhead charges. Funds from these rebates are considered general operating funds of the department and may be used for any purpose.
For example, a private grant expense account 22-3999-40999 with an overhead rate of 50% may incur $2,000 in total direct expenses in August. Overhead of $1,000 will be charged in August. In September, a credit of $500 will be posted to the “Reallocation of Overhead” account, e.g. 12-3999-9885-95999.
For further information, please contact your Budget Office representative.