Indirect Costs Recovery (ICR) Policy

Last updated August 2025

What is ICR?

Indirect cost recovery (ICR) refers to the portion of Facilities & Administrative (F&A) costs collected from grants and contracts that is returned to academic units.

How ICR is distributed

ICR returns to the unit are processed annually, typically in October or November, and are based on indirect costs generated between April 1 and March 31 of the previous fiscal year.

• 65% of total indirect costs is retained by UW Central Administration
• 35% is returned to the College of Engineering (COE)

From the 35% returned to COE:

• 33% is retained by COE for initiatives such as startups, matching, and strategic projects (e.g., startup packages).
• 67% is distributed to academic departments

This results in approximately 23% of total indirect costs being returned to HCDE. This amount may be different if other arrangements are made for a given grant, such as a Memorandum of Understanding governing a Center.

Example: FY25 ICR distribution (based on FY24 IDC)

ICR return to PIs

HCDE will return 5% of the department’s net ICR to eligible PIs, calculated proportionally based on each PI’s contribution to the total indirect costs.

Eligibility is contingent on the PI’s total net ICR return exceeding $500.

Timing

Funds will be transferred to the PI’s “Faculty Allocation - ICR” budget within 5–7 business days after HCDE receives the ICR transfer from COE.

Allowable use of returned ICR funds

Returned ICR funds may be used for business-related expenses such as (but not limited to):

• Food and refreshments (must comply with UW per diem limits and include the required food approval form).
• Research supplies not covered by grants.
• Student or research staff support, such as hourly wages or travel.
• Professional development support.

Please note:

• All standard university spending policies and restrictions apply.
• No expenditures over per diem limits.
• No alcohol purchases.