Federal research funds are generally provided as cost reimbursable awards, i.e., the university bills the sponsor for costs incurred and is reimbursed for allowable costs. It is the goal of the university to maximize research award reimbursement by ensuring that costs incurred follow sponsor policy. The primary source of guidance on all aspects of federal sponsored awards is Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly known as 2 CFR 200 or Uniform Guidance. The Cost Principles, which govern allowable costs are included in Subpart E of the Uniform Guidance.
Some federal awards may have restrictions more specific than the Uniform Guidance. Such restrictions are noted in the Award Overview tab in the PI Portal. Non-federal sponsors may also have specific restriction that will be noted in the PI Portal. If a sponsor does not have spending guidance, the university’s purchasing policy applies.
Cost Definitions
Direct Costs
Direct Costs are costs that can be identified specifically with a particular sponsored award, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
Facilities and Administrative Costs (F&A Costs)
F&A costs (formerly known as Indirect or Overhead Costs) are costs support the sponsored project enterprise but that cannot be identified readily and specifically with a particular sponsored award. Facilities costs include building and equipment depreciation and operation and maintenance expenses. Administrative costs include general and administrative expenses; library expenses; and student administration and services. F&A costs are reimbursed in accordance with the university’s current F&A rate agreement.
Allowable Costs
Costs Generally Considered Allowable as Direct Costs
The following types of costs should be directly charged to federal sponsored awards if they can be specifically identified with the work performed under those awards:
- animal purchase and care
- alterations and renovations when approved as part of the proposal
- computing devices that are essential for, and allocable to the federal award
- consulting services
- delivery charges for equipment and supplies
- equipment necessary for the federal award
- graduate student tuition
- itemized local and long-distance telephone costs
- patient care and subject costs
- publication costs
- salaries, wages and fringe benefits for personnel working on the award
- subcontracts/subawards
- supplies and materials
- travel costs
Costs Normally Treated as Indirect Costs (F&A)
The following costs are usually treated as F&A costs for federal sponsored awards:
- administrative and clerical salaries
- audit costs
- books, institution’s subscriptions for journals and periodicals
- depreciation or use allowances
- general purpose equipment: non-research equipment, which may be used for general office purposes such as computers, printers, fax machines, copy machines, and office furniture
- hazardous waste removal
- legal costs
- local travel costs (meals, parking)
- office supplies
- postage including U.S. Postal Service, Federal Express, UPS
- proposal preparation costs
- routine copying charges that cannot be identified with specific awards
- telecommunications - local telephone service, including phone equipment such as telephones, cell phones, pagers, fax machines, and line charge
As noted above, Uniform Guidance applies to federal sponsored awards and federal flow-through sponsored awards. Costs normally charged as F&A may be charged directly to non-federal agreements if not prohibited by sponsor or university policy.
Unallowable Costs
Costs Generally Classified as Unallowable
The following costs are generally not allowable as either direct or as F&A costs for federal sponsored awards:
- alcoholic beverages
- bad debts
- contingency funds
- entertainment costs
- fines and penalties
- fundraising costs
- honoraria
- lobbying
- salaries and wages for time spent on proposal development/writing
- termination or suspension costs
Additional information on specific costs is provided in the Uniform Guidance section § 200.420.