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INSTITUTION-AFFILIATE AGREEMENTS

The Indirect Costs Program conducted a study of various institution-affiliate agreements reached for the sharing of Indirect Costs grants in order to identify best practices and share them with other institutions.

Key elements for successful institution-affiliate agreements

Provide background information

The institution-affiliate agreement gives the parent institution an opportunity to share information with its affiliate(s) about the Indirect Costs Program and its explicit objectives. Parent institutions should also use this opportunity to explain the program’s funding formula and the calculation of credits to their affiliate(s).

Describe the context

The agreement should clearly indicate the nature of the relationship between the parent and the affiliate. Parent institutions often provide a variety of support services to researchers located at affiliated health research institutes and, for this reason, typically retain a portion of the Indirect Costs grant generated by the affiliate’s research.

It is helpful to have the nature of the services provided by the parent to each affiliate clearly outlined, in order to provide a rationale for the agreed upon distribution of funds. This is especially critical in agreements where the parent has negotiated a different sharing arrangement with each of its various affiliates.

Provide information on how the grant will be shared

The agreement should outline the manner in which the affiliate’s portion of the grant will be calculated and the proportion of that amount that the affiliate will receive.

Outline the conditions

The agreement should outline the roles and responsibilities of the parent and the affiliate with respect to managing the Indirect Costs grant.

Conditions of the agreement may include:

• responsibility for identifying the location of researchers for the purpose of calculating the portion of the grant attributable to the affiliate;


• reporting requirements, including a timeline for the submission of information by the affiliate to the parent for the annual grant request, outcomes report and statement of account;


• agreed-upon timelines for the transfer of funds from the parent to the affiliate; and

The agreement should clearly indicate the length of time it will remain in effect and the conditions under which it may be modified.

Include an appendix with relevant program information

The parent institution may append detailed information to the agreement concerning the objectives and conditions of the program, most notably the program’s list of eligible and ineligible expenditures.

Elements of successful relationships

The best practices study also examined the relationships between parent institutions and their affiliates to identify factors leading to mutually satisfying relationships.

The primary factors identified were communication and transparency. These go hand in hand and lead to a sense of trust between institutions that have frequently found themselves in competition for research dollars.

The study identified two related practices as being especially critical in this regard.

Parent institutions should:

• perform an annual verification exercise to determine the location/primary affiliation of researchers; and


• share the agencies’ calculation of research credits with the
  affiliate(s) on an annual basis.

Together, these practices help ensure that the calculation of the amounts to be transferred by the parent to the affiliate(s) accurately reflects the research credits attributable to the latter.

By sharing all the data with all of its affiliates, the parent institution provides them with an opportunity to detect any errors and makes the calculation process transparent.