Modified Total Direct Cost Base & Exclusions
What is MTDC?
Modified Total Direct Cost (MTDC) base consists of all direct costs (expenditures) less certain categories of exclusions (modifications) as specified in 2 CFR Section 200.68. Expenditures for exclusions that are charged to federally sponsored agreements are not included in the calculation of the F&A rate, and are not subject to application of the F&A rate as these expenditures are considered non-overhead bearing.
Even though there are separate F&A rates for different types of activities, in each case the rate is calculated and charged as a percentage of MTDC. To determine the MTDC base to which the F&A rate will be applied, add all direct costs then subtract the exclusions.
Per 2 CFR Section 200.68 (definition of MTDC), standard exclusions include expenditures for:
- Capital equipment
- Capital expenditures
- Participant support costs
- Patient care charges
- Rental of space
- Scholarships and fellowships
- The portion of a subcontract in excess of $25,000
- Tuition remission
For the University of Minnesota, the standard MTDC1 base has the following account codes (requires a UMN account to access).