Certified Research Administrator Practice Exam

What is the overhead rate to which NIH restricts foreign organizations?

1. 8%

2. 20%

3. 0%

4. Their negotiated rate

The correct answer is: 8%

The correct answer aligns with the National Institutes of Health (NIH) policies regarding the allowable overhead or indirect costs for foreign organizations receiving grant funding. The NIH has established specific guidelines that limit the overhead rate for foreign institutions to a maximum of 8%. This policy is designed to create consistency and ensure that more of the funding directly supports the research activities rather than getting allocated to indirect costs. In contrast, the options indicating either a higher overhead rate or a negotiated rate do not reflect NIH's restrictions on foreign entities. The 20% rate exceeds the caps set by NIH and would not be applicable. Additionally, while organizations may have negotiated overhead rates applicable for domestic funding, the NIH specifically limits foreign organizations to the 8% maximum under its policy framework. Thus, understanding these policies is essential for complying with funding requirements and effectively managing grant budgets when working with international partners.