Overhead Charging Guidelines


Application


All staff members and researchers  at the University dealing with the financial management of research projects 

Purpose


To provide further guidance and support to the University’s research community regarding the expectation of the overheads which will be charged to research projects.

These guidelines are intended to support the implementation of the Overhead Charging Policy

Guidelines


The importance of charging overheads

  • Overheads, or indirect costs, include the costs associated with providing central services that cannot be assigned to any one particular project. These include services such as UniServices Business Development, Contract Negotiation and Commercialisation,  and University Finance, Research Operations Centre, Human Resources, Information Technology, Property Services, Scholarships office, Library, Offices of the VC and DVC(R), faculty and department research support services, including the dean’s office, and some specific research-related charges such as depreciation costs of buildings and utilities charges (but not user charges that are directly attributable to a research project)
  • As a result researchers at the University benefit from receiving access to world-class facilities and equipment, including:
    • High quality research facilities such as laboratories, major items of equipment and other research platforms and the associated staff and resources to run and maintain these
    • High quality research support services such as from the Library and Learning Services, the Scholarships Office, the Centre for e-Research, ITS, Finance, UniServices and HR
    • High quality research management systems, project reporting and access to faculty and departmental support services
  • If the University did not recover the indirect costs or “overheads” there would be a growing gap each year in funding for support services.  As research is now generating an increasing proportion of the University’s revenue, this gap would dramatically impact the ability of the University to provide researchers with the support services and facilities needed to perform at the highest level. Such a gap would require that funds be reprioritised from other parts of the University’s budget and thus create funding gaps elsewhere. In fact, since grants from some Charitable Foundations and international funders do not pay the full cost of research, there is already a significant “gap” of overhead revenues foregone. This means there is already some internal cross- subsidisation of research occurring

In the context of research budgets overheads are commonly expressed as a % of UoA staff (excluding casual staff) salaries

 

What % for overheads should be included in the research project budget

  • This depends on:
    • What category does the funder fall into?  There are 5 primary funder categories as detailed in Table 1 of the Overhead Charging Policy
    • What has been the prior history and agreement?
    • What overhead costs can the total project budget bear?

Note - The associated Overhead Charging Policy sets out a table showing the Funding Category and Sub-Category and the expected overhead rate. 

  • Submitting a budget with an overhead rate below the expected rate may be appropriate in certain circumstances but requires justification and prior approval

Definitions


The following definitions apply to this document:

Staff member refers to an individual employed by the University on a full or part time basis

University means the University of Auckland and includes all subsidiaries

Key relevant documents


Document management and control


Owner: Chief Financial Officer

Content manager: Office of Research Strategy and Integrity

Approved by: Vice-Chancellor

Date approved: 25 May 2018

Review date:25 May 2021