Office of Research and Project Administration
SPONSORED PROGRAMS COMPLIANCE
Allocability Scenarios
The cost principle
of ALLOCABILITY focuses on the relationship between a particular expense
and the project that pays for it. This fundamental principle has been the
focus of significant audit activity at UR and elsewhere.
To charge an expense to a project account because that account has the necessary
funds, or has more money in it than another account, will result in an UNALLOCABLE
CHARGE - unless that expense benefits the project.
Particularly when an expense is being transferred onto a sponsored account -
from another project or from a non-sponsored account - it will be important to
document ALLOCABILITY. This is also true for charges where the benefit to the
project could appear questionable.
Here
are a few examples:
Purchases late in the project period
If the funding for your project will end
in a month, it is questionable that buying a
computer, or any other acquisition, now will
be of BENEFIT to the project. That does not mean
that all such expenses are UNALLOCABLE, but it
does mean that an expenditure late in the project
period, e.g., within 90 days of the project end-date,
will need to be carefully explained, and may
require written approval from the sponsor's grant
or contract officer. (See UR
Guidelines on Determining the Allocability and
Allowability of Equipment Purchased from Sponsored
Programs Funds).
Effort for proposal preparation
The costs of proposal preparation, including time and other related expenses,
can raise allocability questions. Proposal preparation costs may not be charged
to sponsored projects unless the proposal is being prepared for submission
to a current sponsor for a non-competing extension or continuation of its
ongoing project. In those circumstances, it is appropriate to charge those
proposal development costs directly to current projects. Costs for development
of proposals for submission to other sponsors, or for work that does not
relate to ongoing projects, is not allocable to current projects and may
not be charged to those projects.
Effort while absent from campus
OMB Circular A-110 requires that PI's notify the sponsor in writing and receive
prior approval when the PI on a federal grant will be absent from the project
for more than three months (see Establishing
the Groundrules). Whenever a key individual charging salary to
a project will be absent for an extended period, e.g., during extended periods
of illness or personal business, leaves of absence, or sabbatical, the allocability
of salary charges may be questioned. In some cases, the individual may be
continuing to devote effort to the project, and the charges are appropriate.
However, since this could be questioned, it should be carefully documented.
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