Sponsored Program Compliance
11. Charging of Direct Costs
Major Changes in the Uniform Guidance Affecting Proposal Budgets and Charging of Direct Costs
The Office of Management and Budget (OMB) has combined many federal circulars into a single guidance document (known as Uniform Guidance [U.G.], or 2 CFR 200) that can be used by all agencies. These new regulations became effective December 26,2014.
Note that specific agency requirements should be consulted. Many agencies have waived prior approval requirements for specific costs.
Charging Administrative/Clerical and Programmatic Salary Costs
Administrative and Clerical Salaries (in certain circumstances) AND programmatic salary costs can be included on competitive proposal budgets.
Administrative and Clerical Salaries
In general, administrative and clerical salaries should still not be directly charged, but the previous rules regarding administrative charges on "major projects or activities" have been replaced by the following criteria, all of which must be met:
- Administrative or clerical serves are integral (services are essential, vital, or fundamental to the project or activity) to a project or activity;
- Individuals involved can be specifically identified with the project or activity;
- Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency; and
- The costs are not also recovered as indirect costs.
If all of these requirements are met, PIs/departments should add a new justification statement to proposals to facilitate the required agency approval. If previously unanticipated need for administrative or clerical support becomes known during the life of the award, the PI must provide ORPA a justification statement and request ORPA contact the sponsor for approval.
Programmatic Salary Costs
Costs related to protocol development and maintenance, managing substances/chemicals, managing and securing project-specific data, and coordination of research subjects are allowable direct costs when they are "contributing and directly related to work under an agreement". Thus, these programmatic costs may be directly charged using the same underlying requirements as other types of direct costs, and are not subject to the extra approval requirements required of administrative and clerical costs. They are still subject to all regular costing requirements (e.g., allocability, reasonableness, allowable by terms of the award, and incurred within the award period).
Computing Devices
Computing devices can be included on competitive proposal budgets.
Computing devices under $1,000/unit are considered "supply costs" and may be directly charged to the project or activity under the following circumstances:
- The machines are essential* and allocable to the project in that they are necessary to acquire, store, analyze, process, and publish data and other information electronically; this includes accessories (or "peripherals") for printing, transmitting and receiving, or storing electronic information.
- The project does not have reasonable access to other devices or equipment that can achieve the same purpose; devices may not be purchased for reasons of convenience or preference.
Computing devices costing $1,000 or more per unit are considered equipment and follow federal equipment rules for when they can be directly charged. Approval of the Federal awarding agency (or pass-through agency, if applicable) is to be obtained. Computing devices costing $1,000 or more per unit can be charged as direct costs if the devices are essential and allowable, but not solely dedicated to, the performance of the federal award. The former "principal use" / "95% primary use" criteria is not relevant for awards to which the U.G. applies.
*PIs are responsible for determining whether or not the device is "essential" and to what extent the cost of the device is allocable to the sponsored project. PIs and departments should maintain documentation that describes how the proposed computing device meets the above requirements.
Participant Support Costs
Participant support costs can be included for agency approval on competitive proposal budgets.
After the U.G.'s implementation, participant support costs are allowable, with agency prior approval. This includes stipends or subsistence allowances, travel allowances, and registration fees, paid to or on behalf of participants or trainees (but not employees), in connection with conferences or training projects. Participant support costs are not routinely allowed on research projects but can be charged if the project includes an education or outreach component and the agency approves such costs.
These costs should be explicitly listed in the proposal budget or approved by the funding agency after the award has been made.
Visa Costs
Short-term, travel visa costs can be included on competitive proposal budgets.
Since short-term visas are issued for a specific period and purpose, they can be clearly identified as directly connected to work performed on a Federal award and can be directly charged. Visas must be critical and necessary for (directly benefit) the project and be allowable by the agency. Typically, these visas allow employees and students to engage in field research or attend meetings in foreign locations, or allow foreign visitors to visit the University in support of the project.
F&A on Subawards
The subrecipient's negotiated F&A rate, or an alternative rate as described below, must be used for all subawards included in competitive proposals.
If a federal program has a published statutory F&A cap, that rate must be used both by UR and all of its subrecipients. For all other federal programs, if a subrecipient has a federally negotiated F&A rate, it must be used. If the entity does not have a negotiated F&A rate, a 10% de minimus F&A rate should be used instead. PIs may not negotiate or agree to lower rates with their subrecipients.
Fixed Price/Rate Subawards
Agency prior approval is required to enter into fixed price/rate subawards, which may not exceed $150K.
Agency prior approval is required to enter into a fixed price/rate subaward rather than a cost-reimbursement subaward, and the total value of each fixed price/rate subaward may not exceed $150K. Fixed price subawards are most commonly used for clinical trial site agreements, foreign subrecipients, and small businesses. To expedite agency approval, PIs/departments should add a new justification statement to proposals contemplating a fixed price/rate subaward. A statement is not needed for other subawards.
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