Fraser Health investigators are responsible for creating or negotiating a budget to cover all expenses related to the conduct of a clinical research, which includes both the direct costs and indirect costs.
Updated October 28, 2022
Full Cost of Research = Direct Costs + Indirect Costs
Direct cost is the cost that is attributable to a specific research project (e.g. staff salary, materials and supplies, equipment, departmental fees, consultant fee, publication costs, etc.).
Indirect cost, also known as overhead, is the central, and/or department, and/or facility cost that Fraser Health incurs to support research but that is not attributable to specific research projects. Overhead fee may or may not be attributable to specific project activities. This is a real cost to the institution to maintain the infrastructure and support the Department of Evaluation and Research Services (DERS) to allow research project to proceed at Fraser Health Authority. Indirect cost includes but is not limited to usage of space, accounting (invoicing, research account maintenance, preparation of financial reports), and research administration (reviewing contracts, review of research proposals etc.).
In order to recover institutional indirect costs, an institutional overhead charge is incorporated into the research project budget. This applies to all funded research where indirect costs are not recovered via alternative mechanisms.
See Clinical Research Overhead Rates policy for the overhead rates.
How is overhead calculated?
Overhead is calculated as a percentage of applicable direct cost.
Overhead = Direct cost x overhead percentage
For example, if direct cost of the screening visit is $100, the overhead fee is $100 x 40% = $40. The total cost of the screening visit will be $100 + $40 = $140.
Are there exceptions to the overhead rate?
The only exceptions to the rate specified in the policy are funds from tri-agencies like Canadian Institutes of Health Research (CIHR) (which provides indirect cost payments annually through the Federal Research Support Fund) and certain grant funders where they clearly state a different indirect cost recovery rate.
Additionally, regarding waiving the indirect cost recovery requirement (Research Policy section 1.10): Indirect cost recovery is a responsibility of DERS. DERS will collect the indirect cost of research from government granting agencies under the authority of the Fraser Health vice president (VP) of Patient Experience. Indirect cost is not borne by the Fraser Health researcher but by the granting agency. Where the funding agency does not allow for the institution to collect indirect cost in their policy, Fraser Health VP of Patient Experience may waive this requirement. Therefore, the waiver is on the granting agency and not on the Fraser Health researcher who may or may not negotiate a payment for indirect cost on behalf of the institution.
Does this mean I will get less money for my research project?
No. Researchers are to apply overhead rates to the direct costs of the research. The full cost will include both the direct cost and indirect cost.
Which items should I apply the overhead to?
You must ensure that overhead is applied on items such as:
- Start-up payments (including pharmacy start-up, lab start-up, medical imaging start-up fees)
- All per subject costs (including patient visits, unscheduled visits, conditional procedures)
- Research staff activities (e.g. principal investigator hourly fees, research assistant/coordinator time spent on submitting protocol amendments, SAEs, preparing for a monitor visit or inspection, re-consenting)
- Screen failure reimbursements
- Medical procedures (including biopsies, radiological services, blood draws)
- Pharmacy fees (including dispensing of study medication, on-call pharmacist services)
- Close up fees (including research staff time)
- Service fees (including consultant services, laboratory analysis services)
- Traveling fees (including transportation, accommodation, subsistence)
Please consult with firstname.lastname@example.org during the budget negotiation if a sponsor does not agree to include overhead on any of the items above.
You should try to negotiate to apply overhead to the following items:
- Patient reimbursement
- Archiving/storage fees
- Equipment fees
The following items are not subject to overhead:
- Initial review fee for Research Ethics Board
- Annual renewal fee for Research Ethics Board
- Other fees for Research Ethics Board
- Patient partner honorarium
- RealTime eDocs module fee
Are sub-awards or sub-grants to Fraser Health from other institutions subject to indirect cost recovery?
Yes. The main site is responsible to negotiate on behalf of the sub-sites sufficient funds so that the appropriate indirect costs are included in the transfer of funds to each institution. Sub-contracts are usually charged the same overhead rate as the main site.
How are institutional indirect costs collected from my research funding?
See the Institutional Research Overhead Collection Process Q&A.