As the Medical School strives to advance groundbreaking clinical and translational research, we recognize the challenge this type of research brings. We have heard concerns from faculty that patient pass-through costs burdened with the full on-campus research indirect cost rate have created a financial challenge on federally funded, multi-site clinical trials. These are situations where funds are provided to U-M with the purpose of sending out per patient reimbursements to various other sites (through a contracted service or Hybrid Purchase Order mechanism).
Having researched the issue, we found that often federal sponsors allowed for full indirect cost recovery on per patient pass through costs consistent with our negotiated rate agreement, but had instituted a cap on the total funds available, making it nearly impossible to meet the work requirements of the announcement and still recover full indirects on the pass through costs.
We do recognize that there remains investment of university resources used to issue checks, establish contracts, and process official agreements, as well as unit overhead costs related to the post-award support of the project. Finally, our negotiated rates on campus are an average rate across all activities, so any change to lower recovery on this activity does depress the cumulative recovery across all projects.
After review, the Medical School is willing to use a waiver allowing indirects to be recovered only on the first $25,000 to each site, for this subset of activity. This waiver will only be allowed when agreed to by the administrative home department of the project.