The indirect cost incentive program was originally established to encourage PIs to obtain full indirect cost recovery on awards.
Fifteen percent of indirect costs charged on qualifying awards are credited back to the PI's incentive account established in the
490 fund series.
Awards Qualifying for Incentive
In order to qualify for incentive, the award must have the full allowable indirect cost rate applicable. If the sponsor limits recovery
to a certain percentage, this is considered full allowable recovery.
In addition, if a multi-year project is awarded with the full allowable indirect cost rate, and ISU's negotiated indirect cost rate increases
during the life of the award, the award will continue to qualify for the incentive program even if the sponsor holds the indirect cost rate to
its original level.
Who Qualifies for Incentive Accounts
The person must be listed as a PI or Co-PI on a GoldSheet for a funded proposal.
The following people are not
elibigle to receive an incentive account:
How Incentive is Calculated
- Undergraduate Students, Graduate Students, and Post Docs
- Professional and Scientific (P&S) - P36 and below
- Term Employees whose appointments will not be renewed
- Collaborators who are Federal Employees
- Visiting faculty or visiting scientists
The 15% incentive is calculated based on the amount of indirect costs which post for a month. The actual posting of the incentive funds will appear in eData on the 5th working day of each month as part of the month-end closing process. For example, if $1,000 of indirect costs post in March, then $150 ($1,000 * 15%) of incentive
will post to the PI's 490 account around April 5th as a March period transaction.
If incentive is split among two or more PIs, then the incentive will be distributed based upon the percentages entered on the GoldSheet.
This distribution can be found in eData Financial Reporting: SPA Summary/SPA Financial Reports, RMM ICR Distribution link.
Using the example from above, each PI would receive $75.
If an account has child accounts, then the incentive distribution for the parent account and all of the child accounts will be the same, based on
the RMM IDC distribution entered for the parent account. For example, PI Johnson has a parent account and PI Nelson has the child account.
They have agreed to a 67/33 split on the incentive distribution. Here is how the incentive would be distributed.
Setting Up an Incentive Account
Incentive accounts are set up as 490-xx-xx accounts. Only one incentive account is set up per principal investigator, as the system can only distribute incentive to one 490 account per principal investigator. It may be possible to
have an incentive account set up for a center director, but this is only done on a very limited basis. If you are interested in setting up a
center director incentive account, please contact your SPA accountant for more information.
Managing an Incentive Account
The 490 account must always have a positive cash balance.
Expenditures charged to all university accounts must be both allowable and appropriate.
- Defined by applicable state laws and administrative code, Board of Regents policies and University policies.
- Subject to the policies of a department or college which may be more restrictive than the University's policies.
- Not under the same restrictions as the grant from which it was generated. When the incentive funds are distributed,
they become University funds and are no longer considered sponsored funding.
expenditures include those that are:
- Necessary and beneficial to the University
- Reasonable - would it pass the Des Moines Register test?
- Adequately documented
- Have a University business purpose
Some examples of unallowable expenses on an incentive account include:
- Alcoholic beverages, unless the use is for cooking, research or course study.
- Flowers or gifts of any kind in connection with the illness or death of employees or family members. Flowers used for public
functions, such as retirement parties and convocations, are allowable when they serve a business purpose.
- Employee hospitality functions such as Christmas parties and Administrative Professionals' Day lunches. Annual departmental
retreats and retirement parties with a business purpose are allowable.
- Items for employee use only, such as coffee, coffee pots, refrigerators, microwaves, etc., are unallowable. This does not
preclude a unit from initially charging coffee to a University fund, except for federal sources, and then collecting employee funds to
reimburse the University account.
The department and the college are ultimately responsible for providing information on the business purpose and determining that an
expenditure is allowable and appropriate. For more information, please refer to the
Allowability and Appropriateness training manual,
the Hospitality Guidelines,
and a memo from the Executive Vice President and Provost.
Closing an Incentive Account
A 490 account remains active as long as it has a positive balance and the PI is associated with the University. If a former employee
is given collaborator status or emeritus status, then the 490 account will also remain active. If the PI leaves or retires, the account
balance reverts to the administering department/research unit. The balance may be transferred to a 290 account and
must be approved by the department/research unit chair. You may use this form to process your request.