Implementing Infrastructure
Implementing the Infrastructure Charge (ISC) Policy

May 11, 1998 (Revised March 1, 2004)
To: School and Department Faculty Administrators and Staff
From: Susan Calandra, Controller and Tim Warner, Vice-Provost for Budget and Auxiliaries Management
Re: Implementing the Infrastructure Charge (ISC) Policy

[This implementation guide has been updated for the new Oracle financial system which replaced the legacy financial system in September 03. The implementation guideline addressing the implementation of the Infrastructure Charge Policy prior to September 03 is at http://co.stanford.edu/pp/infrastructure/infracharge.html.]

In order to clarify and refine the application and implementation of the University's Infrastructure Charge (ISC) Policy, the following procedure implements Administrative Guide Memo 37.3 Infrastructure Charges. In general, the Infrastructure Charge Policy states the University's intention and mechanism for recovering certain infrastructure related costs incurred on behalf of activities supported by restricted funds. As restricted funds are used, an assessment is charged to help defray the cost of infrastructure (primarily building-related operating and maintenance costs; e.g., custodial costs, routine maintenance, insurance, fire protection, and other safety costs). The ISC Policy covers all restricted funds and certain other funds administered by Stanford University. This includes designated unrestricted, endowed (income), expendable gifts, and government and non-government sponsored agreements.

Infrastructure Charge

The infrastructure charge is based on expenses per PTA (project/task/award) and appears in expenditure type 56930.

For questions about infrastructure charges related to sponsored projects please call your OSR representative or (650) 723-2883 in the Office of Sponsored Research. For all other inquiries, please call your Fund Accounting representative or Jean DeMartini, Manager Fund Accounting at (650) 723-3013 in the Controller's Office.

General Description of Policy Application

Expenditures in projects/tasks/awards (PTA's) supported by restricted funds (Designated, Endowment Income, and Expendable Gifts) are subject to the charge, with the general exemptions of faculty salary and related benefits expenditures, student aid expenditures, gifts to student organizations and expenditures for building projects and several other categories of expense (detailed below).

Sponsored activity (award range PAAAA - VZZZZ) are not assessed the infrastructure charge, unless they have the facilities and administrative (F&A) cost recovery (formerly referred to as indirect cost) waived to less than 6%. If indicated, the infrastructure charges incurred by expenses on these PTAs may be charged to an alternate PTA. The alternate PTA will reflect these infrastructure charges in expenditure type 56950.

Should a principal investigator wish to send a proposal to a sponsor which grants facilities and administrative costs (formerly referred to as indirect costs) at a rate less than Stanford's current ISC rate, the PI must identify on the F&A cost waiver request a plan for paying the ISC. Alternatives include charging the project directly (assuming the charges are allowable by the sponsor), or designating an alternate source of funds to pay for the ISC. This alternate source of funds must be able to support an expense of this nature. Designated, endowed or expendable funds may be used, but other sponsored projects and operating budgets may not.

The Infrastructure Charge policy exempts all expenditures in service types: Student Aid, Facilities Operations & Maintenance, Expenditure Allocation, Miscellaneous Receivables, Academic Service Centers, Administrative Service Centers, Specialized Service Centers, Auxiliaries, Intercompany, and Operating Budget regardless of which award classification they are in (e.g., Operating Budget, Designated, Expendable, etc.). All direct expenditures against the operating budget are exempt. However, restricted funds supporting the operating budget are assessed the charge through a separate mechanism.

All student aid funds, both endowed (award range K-N) and expendable (award range G-J), and cost sharing funds (a part of award range W) are exempt from the charge. Fellowships which provide a fixed institutional allowance amount are exempt from the infrastructure charge. University Research funds are also excluded (a part of award range W). All designated, expendable and endowed funds subject to the infrastructure charge have had eligible expenditures charged since January 1, 1996.

Unobligated funds remaining at the expiration of a fixed price sponsored project which are transferred to a departmental PTA on or after September 1, 1999, are not subject to the infrastructure charge provided the funds were assessed an F&A rate of 6% or greater. These funds are transferred to a departmental PTA, less the facilities and administrative costs (formerly referred to as indirect costs) that would have been assessed on additional project expenditures. The department should either establish a new PTA exempt from infrastructure or use an existing PTA that is already exempt. The department may not commingle these funds with funds subject to infrastructure in the same PTA. Please contact your OSR representative for additional guidance.

ISC Waivers

Requests to waive the application of ISC must be addressed to the Budget Office. A waiver of F&A (indirect costs) granted by the Dean of Research does not waive infrastructure. Waiver requests should be addressed to Andrew Harker, Director, Budget Office. See Research Policy Handbook section 3.10.

Utility Charge (UC)

The Utility charge is a discretionary mechanism which allow School Deans to recover the cost of utilities from restricted funds. This charge is subject to the exact same policies, guidelines and implementation procedures as infrastructure. Currently only the Dean of Research has chosen to assess the utility charge.

Setting the ISC/UC Rates

Rates are reviewed and set annually by the Budget Office. Click on the Stanford Rate Page for current rates and rate history.

Charging Infrastructure in the Oracle Financial System

Awards are charged ISC based on the burden schedule assigned to the award in Oracle Grants Accounting. The burden schedule defines a list of expenditure types that are subject to ISC, the rate applied and the time period in which the rate is effective. This schedule is applicable to all projects and tasks associated with the award. Burden schedules that charge ISC start with the letters "ISC… in the schedule name. (Burden schedules charging the utility charge include "UC" in the burden schedule name.) Projects and/or tasks that may need to be burdened differently may be assigned a separate burden schedule. The section "List of Expenditure Types Excluded from the Infrastructure Charge on all Burden Schedules" documents the expenditure types excluded from ISC on all infrastructure burden schedules.

Charging the Alternate PTA for Infrastructure (Sponsored Projects only)

For sponsored awards that are assessed the infrastructure charge and the sponsor will not pay the ISC, the department designates an alternate PTA to accept the charge. Oracle Grants Accounting does not support the systematic charging of alternate PTAs therefore alternate PTAs will be assessed the charge manually. This first manual assessment will occur no earlier than May 04 and will be done on at least a quarterly basis thereafter. Expenditure type 56950 is used for the alternate infrastructure. Expenditure type 56960 is used for the alternate utility charge.

Infrastructure Charge - Implementation Dates for Sponsored Awards

The Office of Sponsored Research instructed PIs that proposals with a start date on or after January 1, 1997 were to include the Infrastructure Charge in the budget where full or partial waivers of facilities and administrative costs (formerly known as indirect costs) are requested. All project PTA's with full or partial waivers (less than 6% facilities and administrative cost rate) which have a start date on or after January 1, 1997, are subject to ISC. However, Stanford began charging ISC to applicable expenditures on sponsored project PTAs starting July 1, 1998 because of delays in making the necessary programming changes. ISC was waived on sponsored project PTA's for the period January 1, 1997 - June 30, 1998.

Applicability By Award/Fund and Service Type

The following exceptions apply to above.

Awards/Funds Excluded from ISC Policy

List of Expenditure Types Excluded from the Infrastructure Charge on all Burden Schedules

All Expenses except those in the following expenditure types/categories will accrue the 6% infrastructure charge:

• Restricted Funds Policy approved by the Board of Trustees as of January 1, 1996
• Infrastructure/Utility Charge Rates
• Indirect Cost Waivers (RPH 3.10)