Direct Cost Categories

University Laboratory Animal Resources (ULAR) has oversight responsibility for all vertebrate animals used in research projects. Animals are generally purchased through ULAR and are maintained in ULAR approved facilities. When budgeting for animal purchase or housing, check with ULAR for the appropriate rates.

Consultants bring a particular expertise to a project that is otherwise not available within the institution. Some federal agencies have specific limits and guidelines regarding the use of consultants and the reimbursement rates for consultants. Appropriate costs for consultants include travel and housing costs as well as professional fees.

Generally, Ohio State faculty and staff cannot be paid as consultants on sponsored projects; they should typically be listed as project personnel for an appropriate percentage of time. If the project activity falls outside their normal university responsibilities, Ohio State personnel can be paid supplemental compensation. Supplemental compensation must be approved by the department and college; Office of Sponsored Programs staff determine if additional approval is needed from the sponsor.

Fringe benefits include employer-paid contributions for retirement, health care, life insurance, etc. The cost of these benefits is calculated as a percentage of salary. Since benefits differ for different categories of personnel, there are a number of different fringe benefit rates.

For an item to be considered equipment, it must meet all three of the following criteria:

• Cost $5,000 or more
• Have a useful life of at least one year
• Be stand-alone and function independently

Some replacement parts and fabricated equipment are treated as exceptions to the standard definition of equipment. Consult a sponsored program officer for additional information. Anything that does not meet the criteria for equipment should be budgeted in the supplies category.

Equipment for on campus research and development projects is excluded from the modified total direct costs (MTDC) base and facilities and administrative (F&A) charges if a project recovers the current negotiated F&A rate. If the sponsor pays less than the appropriate negotiated rate, then the F&A rate is applied to all costs, including equipment (unless specifically prohibited by sponsor policy).

This category includes items that are expended or consumed in the conduct of a project. Typical items would be chemicals, glassware, computer supplies, data collection materials, etc.

This category includes costs that do not fit readily in any of the defined cost categories, e.g., publication charges, duplication costs, subject fees, radioactive waste disposal, project related long distance phone calls, computer time for data analysis, purchased services (e.g., statistical consultation billed at an hourly rate). Maintenance contracts are generally only allowed for equipment purchased as part of the project. Contracts for equipment owned by colleges or departments cannot normally be charged to a project.

Participants

Uniform Guidance (2 CFR 200.1) defines a participant as “an individual participating in or attending program activities under a Federal award, such as trainings or conferences, but who is not responsible for implementation of the Federal award… Examples of participants may include community members participating in a community outreach program, members of the public whose perspectives or input are sought as part of a program, students, or conference attendees.”  Participants perform no work or services for the project or program other than for their own benefit.

Individuals committing effort to the development or delivery of program activities under a Federal award (such as consultants, speakers and trainers, project personnel, or staff members of a recipient or subrecipient) are not considered participants, nor are research subjects/participants. 

NSF’s Research Experience for Undergraduates (REUs) program supports a special subset of participants. REUs provide training opportunities for undergraduate students to develop their research skills while being mentored. REU supported students are considered participants rather than student employees in a PI’s lab.  

Participant Support Costs

2 CFR 200.1 identifies Participant support costs (PSC) as “direct costs that support participants and their involvement in a Federal award, such as stipends, subsistence allowances, travel allowances, registration fees, temporary dependent care, and per diem paid directly to or on behalf of participants.” 

PSC does not include costs for individuals responsible for the development or delivery of the programs; conference/workshop support costs such as facility rental, catering, supplies, or media equipment rental; or payments to research subjects/research participants. 

This category includes costs for tests and procedures that are required only because the patient is participating in a research project – they are not a part of routine medical care. The cost of such tests, performed at The Ohio State University Wexner Medical Center and billed by the hospitals, are patient care costs. Professional fees or costs collected by private billing agencies are not considered patient care costs.

Patient care costs for on-campus research and development projects is excluded from the modified total direct costs (MTDC) base and facilities and administrative (F&A) charges if a project recovers the current negotiated F&A rate. Generally, clinical trials sponsored by the pharmaceutical industry do not recover the appropriate negotiated rate, so all charges are subject to F&A costs.

Types of personnel frequently involved in projects include:

• faculty members, academic year and off-duty appointments
• research assistants and associates
• postdoctoral associates
• graduate associates
• undergraduate assistants
• technicians and other support personnel
• interviewers and evaluators

For each person involved in the project, list name (if known), position and percentage of time on the project. Unless prohibited by sponsor policy, it is OSP’s practice to include an annual escalation rate of 3% to cover salary costs beyond the current fiscal year. However, this procedure only provides an estimate of future personnel costs and is neither a commitment to nor a constraint on future individual salaries. When projects are charged for personnel salaries, the associated fringe benefits are also charged.

Academic Year Appointments/Off-Duty Pay
Funds to cover the cost of faculty and staff time spent on a project can be requested from most sponsors. When necessary, this cost can be contributed, with department concurrence. Always check sponsor policies about allowable personnel costs. Faculty members should check with their chairs for department policy.

During the academic year, when a faculty member is appointed to a project, the appropriate salary and fringe benefit amounts are charged to the project rather than to the usual university funding source.

Faculty with nine-month appointments may receive up to 3/9ths of their academic year salary during their off-duty periods, from university and/or external grant and contract funds. The university funds portion cannot exceed 2/9 and the external funds portion cannot exceed 2.5/9 of base salary. Nine-month faculty earning 3/9 during the off-duty period are expected to be on duty during the entire three months. All faculty receiving ODP from sponsored projects will receive and must certify, an effort report for the period.

Salary Cap
NIH caps the salary that can be charged to grants (the NIH Salary Cap) at Executive Level II of the Federal Executive pay scale. The value typically changed in January of each year. Investigators should use the cap in effect at the time they are creating their proposal budgets. 

Some other sponsors also have salary caps, which may or may not change over time and investigators should use sponsor guidance when generating proposal budgets.

On November 24, 2021, the Department of Labor published the final rule implementing Executive Order 14026, which establishes a minimum wage for workers performing work on covered federal contracts, to be evaluated annually. The minimum wage on federal contracts effective 01/01/2024 is $17.20/hour.

This rule does not apply to grants or cooperative agreements, only to federal contracts. If you are not sure if an award is a grant, cooperative agreement, or contract, check the field ‘Award Type’ in Workday on the Award Overview, or ask your sponsored program officer.

A subcontract may be required if part of the research effort under a grant or contract is to be performed by another organization. If the subcontract is part of a proposal to a federal sponsor or from federal funds, work with the sponsored program officer to determine whether the subcontractor should be treated as a vendor or subrecipient. Making the appropriate decision before proposal submission can avoid problems after the project is funded.

Subcontracts are always awarded to an organization or institution, not to an individual. Ohio State project employees cannot have financial interests in any organization receiving a subcontract.

If an individual not affiliated with an organization is doing part of the work, that individual must be paid as a consultant.

Describe who will be traveling, where, and for what purpose. The university’s Travel Policy specify reimbursement rates for mileage, meals, lodging, and other expenses. When computing travel expenses, include transportation, accommodations and per diem, registration, and all other allowable expenses.