Indirect Costs Recovery (ICR) policy

Last updated August 2026

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 the unit to support research and departmental priorities.

How ICR is distributed

Units receive an annual ICR distribution from the College of Engineering (COE), typically in October or November, based on indirect costs generated between April 1 and March 31 of the previous fiscal year.

The distribution is allocated as follows:

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

Of the 35% returned to COE:

• 33% is retained by COE to support initiatives such as faculty startups, matching funds, and other strategic investments. 
• 67% is returned to the units.

This results in approximately 23% of the total indirect costs generated being returned to the department. This percentage may vary if alternative arrangements are established for a specific grant or center, such as through a Memorandum of Understanding (MOU). 

Example: FY25 ICR distribution (based on FY24 Indirect Cost Recovery)

HCDE ICR return to Principal Investigators (PIs)

As part of HCDE’s internal ICR distribution policy, the department returns 5% of HCDE’s net ICR to eligible Principle Investigators (PIs). Each PI’s allocation is calculated proportionally based on their contribution to the department’s total indirect cost recovery.

To be eligible, a PI’s calculated ICR return must exceed $500. 

Eligibility 

• Current faculty who meet the minimum threshold are eligible to receive an ICR distribution. 
• Emeritus faculty remain eligible receive ICR distributions for qualifying awards. 
• For other researchers who leave HCDE or the University before the annual distribution is processed, their eligible ICR return will remain with the department and be used to support departmental research priorities and initiatives. 

Timing

Funds will be transferred to the PI’s Faculty Allocation - ICR budget within 5-7 business days after HCDE receives its annual ICR distribution from COE. 

Allowable use of returned ICR funds

Returned ICR funds may be used for business-related expenses, including 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 sponsored awards. 
• Students or research staff support, including hourly wages and travel. 
• Professional development activities. 

Spending guidelines

All University of Washington spending policies and restrictions apply, including:

• Expenditures must comply with applicable UW purchasing and fiscal policies. 
• Food expenses may not exceed UW per diem limits. 
• Alcohol purchases are not permitted.