All grants and contracts managed through IU are subject to the federally-negotiated Facilities & Administration or "F&A" rate. Also referred to as "indirect costs" or "overhead," F&A is built into every grant budget to help defray general costs that enable research to be conducted at the University: building and equipment depreciation, maintenance, operations, libraries, telecommunications, and utilities. It also funds departmental and central administrative services including PDS, ORA, the ORA Administrative Proposal Preparation Support team, and parts of IU's internal funding programs.
IU's current F&A rate, 57.5% for on-campus research, is comparable to the current rate at other R1 institutions: Northwestern 55%, UCLA 54%, Purdue 55%, UCLA 54%, U Michigan 55%, Stanford 57%, UIUC 58.6%, Columbia 60%, Harvard 59%. The percentage varies from university to university based on factors that include geographic location, the condition of facilities, and more. The federal government adjusts the rate every three to four years after rigorous review and audit to ensure appropriate use of funds.