Managing Sponsored Project Funds: Indirect Costs Exclusions

Find out which expenses should be excluded from indirect costs on sponsored project awards.

Award agreements dictate which expenses are exempt from indirect cost (IDC) charges.

Federal awards

For federal awards, the negotiated federal IDC rate, called Modified Total Direct Cost (MTDC), excludes the following expense categories:

• Equipment
• Capital expenditures
• Patient care
• Tuition remission
• Rental of off-site facilities
• Scholarships and fellowships
• Subcontracts in excess of $25k each
• Non-conference-type participants costs (account code 637565)
• Cloud Computing Costs via UCSD Contracts with:
  • Amazon Web Services
  • Microsoft Azure
  • SDSC Cloud
  • Triton Shared Computing Cluster (TSCC)
  • SDSC Project Storage
  • Sherlock Cloud

Other awards

For all other awards,the IDC rate and exclusions vary. After receiving the award, Sponsored Projects Finance (SPF) reads the award document and sets up the IDC rate and exclusions in the accounting system. Always refer to your award documents for specific exclusions.

For more information, see the Contract and Grant manual.