Who ever came up with the accounting system for grants was either a genius or a crook. Maybe both. I spent a lot of yesterday deal with the budget I am putting together for one of my grant proposals. In said grant, I am budgeting a sub-contract so that a student can live at a tropical field station for a year (any takers?). The field station, as a place of research, has an overhead rate that gets charged to any subcontract. Their rate is 55.01% (why the .01, I have no clue). So, the breakdown of costs there goes something like this.
Room 575/month = $6900
food 30/day = $10950
Total = $17850
Field station overhead (55.01%) = $9820
Total with O/H = $27,670
Fair enough, but wait! It gets better. Because the money is being paid as a sub-contract through Employment U, they want their cut too. Do you think that they take O/H on just the cost of room and board? No way. They take O/H on the whole amount, including the field station O/H. Well, because it's a sub-contract only $25K is eligible for O/H, but they are still taking overhead on another institution's overhead. If we do the math on that, it looks like this:
Employment U O/H (49%, but only on the first $25K of a subcontract) = $12,250
GRAND total = $39,920
So, in order to spend $17850 of fed money to pay for room and board, we have to spend $39,920, or 124% more than the original cost. Gotta love academic finances.
58 minutes ago