FREQUENTLY ASKED QUESTIONS - COST PRINCIPLES FOR SPONSORED PROJECTS


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A. Administrative vs Technical Expenses - General

A1. My research group would like to rent a water cooler and charge our NSF grant as the fund source. My research team occupies about 2,000 ASF in one campus building and the nearest building water fountain is one floor down. The cost was not budgeted for or justified in the NSF proposal. Can we charge the water cooler as a direct cost to the NSF award?

Probably not. Since the cost does not appear to be required for the technical scope of the work, it will need to meet the allowability tests in A-21 for administrative costs. The cost appears to be routine in nature and does not specifically meet any of the A-21 criteria for a "major project". Thus, the expense would not be allowable as a direct cost to the sponsored award.

A2. I would like to rent a water cooler to be used by human subjects who participate in the conduct of my NIH project and must remain on site, without leaving, for up to 3 hours at a time. The cost has not been budgeted for or justified in the original NIH proposal. No other projects use the space or the water cooler. Can I charge this cost to my NIH award?

Yes, with documentation. The water cooler appears to be necessary for the technical conduct of the NIH project and could therefore be allowed as a direct cost to the project. Since the cost, however, was not originally proposed and approved, it could only be charged to the NIH award if rebudgeting authority exists for the award and the PI provides written justification for the technical expense.

A3. What if the water cooler purchase in the above question is used by my researchers and other visitors in addition to the human subjects? Would this change its allowability?

No. The use of the water cooler by others in the research group would not change the allowability of the cost so long as the use remains incidental to the technical purpose. Once the use of the water cooler ceases to further the technical scope of work, it becomes administrative in nature and would need to meet the tests of allowability for administrative costs outlined in campus policy.

A4. A sample that will expire in 36 hours requires analysis by a third party. Can I use an express delivery service to transport the sample and charge the transportation costs my ONR grant that is sponsoring the work?

Yes. Because of the time sensitive nature of the sample and the purpose for which it was incurred, the advancement of the project's technical scope, this normally administrative cost is now considered a technical cost and could be directly charged to the ONR award. The cost must also meet the other tests for direct-charging (it can be specifically identified to the ONR award, is reasonable and has not been specifically disallowed).

A5. What if the same research group needs to use an express mail service to deliver an interim technical report due to the agency in 2 days and delivery by the due date cannot be guaranteed with standard mail?

Postage and mailing costs are normally treated as indirect costs, but could be justified as a direct cost to sponsored awards if they are necessary for the technical scope of the work and are reasonable and allocable to the sponsored award. In this example, the cost has been incurred for the technical scope of the project and identifiable to the project and could therefore be charged directly to a sponsored award.In hac habitasse platea dictumst. Suspendisse dictum, velit vel vehicula gravida, turpis nulla dignissim nibh, a tristique enim dui vestibulum enim. Duis cursus euismod diam vitae gravida. Etiam a purus lorem.

A6. Can I charge to my sponsored project the cost of photocopying research papers and making transparencies used to provide background for the research project and for the presentation of original research results at a professional technical meeting?

Yes, provided the costs can be identified to and benefit the project charged. Since these costs pertain to the project's technical scope of work (dissemination of technical information is a requirement of sponsored agreements), these normally administrative expenses would be considered technical and could be directly charged to the sponsored award as long as they can be specially identified to and benefit the project.

A7. I would like to charge annual membership dues to a professional association to my NSF award. The membership entitles me to receive a copy of an internationally recognized periodical and also allows me a discount on registration fees for several international conferences in my field of study. Is this allowable?

Maybe. Memberships that are required for attendance at professional technical conferences can be directly charged to federal sponsors when the costs have been specifically budgeted for and justified in the grant proposal and not specifically disallowed by the granting agency. Because they are of a general benefit to research and academic endeavors and cannot be specifically assigned to benefit individual awards, memberships are normally considered indirect costs. Thus, the costs would need to be carefully justified and a relationship established between cost incurred and benefit received.

A8. What if I wanted to charge the membership dues to a non-federal sponsor?

Membership dues to a non-federal award are allowable provided the expense meets the tests of reasonableness, allowability and allocability. If the cost can be justified as necessary for the conduct of the award and is not specifically disallowed by the sponsor, it could be charged directly to a non-federal sponsor.

A9. As a faculty member, my department provides me with an office phone and pays for the monthly line fees and local calls, but does not provide any financial support for communications costs beyond that. I need three additional phones in my laboratory for my laboratory staff to communicate with other research teams, vendors etc., and as a safety precaution (we work long hours, late into the night). I have 2 federal grants and no other funding. I have asked to charge the monthly line fees, local calls and long distance calls for the three additional laboratory phones to my federal awards. My Department Manager tells me I cannot do this. Where am I supposed to put these costs if I cannot put them on the grants?

OMB Circular A-21 states local telephone costs and monthly line charges shall normally be treated as F&A costs. Thus, charging federal awards directly for costs normally considered indirect is problematic. If the PI has proposed and justified the costs as necessary to the technical conduct of the awards (or has rebudgeted for the costs under a local rebudgeting authority), and they have been approved by the sponsor, the costs can be placed on the federal award. Otherwise, they will be considered general support costs not specifically identifiable to particular awards, and alternate funding must be identified. In general, the federal government feels that telephone costs (other than long distance calls) are difficult to allocate with a high degree of accuracy to individual sponsored awards, thus an appropriate share of costs to awards cannot be made and a cost-benefit relationship cannot be established. Long distance calls, however, can be specifically identified to an activity and are therefore allowable provided they meet all the other tests of allowability.


B. Major Projects

NOTE: A-21 uses the definition of "major project" to describe a level of administrative effort that is significantly greater than the routine level already provided by your department or ORU. It is not intended to describe a sponsored project's importance, impact or size.

B1. I have an R01 grant from NIH to conduct basic research involving 100 human subjects. Does the administrative effort related to managing these subjects qualify as "major" under A-21 definitions?

Yes. A-21 says that the administrative effort related to managing human protocols is "major". Therefore the administrative costs related to managing this project's human subjects would be allowable. Make sure the costs are properly budgeted and justified in the proposal or rebudgeting documentation and are specifically identified to the project!

B2. I have an NSF award which subcontracts part of the technical scope to another university. The subaward is 50% of the total award and involves multiple investigators and additional reporting. Would the administrative effort related to this project qualify as "major" under A-21 definitions?

Yes. A-21 says that large, complex programs that entail assembling and managing teams of investigators qualify the award as "major". In this example, the existence of the subaward alone does not qualify the award as major, but complexity of the subaward does. Therefore the administrative costs related to managing this project's subcontract would be allowable. Make sure the costs are properly budgeted and justified in the proposal or rebudgeting documentation and are specifically identified to the project.

B3. I have a DOD award for which my research team must make several hundred measurements every few months. These data must be entered and maintained in a complex database. Does the administrative effort related to data management qualify as "major" under A-21 definitions?

Yes. A-21 says that programs that require extensive data accumulation, analysis and data entry are "major". Therefore the administrative costs related to managing this project's data collection and entry, plus the administrative effort related to maintaining the database would be allowable. Make sure the costs are properly budgeted and justified in the proposal or rebudgeting documentation and are specifically identified to the project.

B4. My NSF award was given to write and edit a new Physics textbook. Would the administrative effort related to producing this text qualify as "major" under A-21 definitions?

Yes. A-21 states that projects whose principle focus is the preparation and production of manuals, large reports, and books are "major". Therefore the administrative costs related to researching, preparing, editing and typing the manuscript would be allowable. Make sure the costs are properly budgeted and justified in the proposal or rebudgeting documentation and are specifically identified to the project.

B5. My NSF funded project takes place in Africa. Would the administrative effort to coordinate this project qualify as "major" under A-21 definitions?

Yes. Projects that are remote from normal departmental administrative services are considered to have administrative needs that are "major". Therefore the administrative costs related to managing this project would be allowable. In general, projects that must duplicate an administrative infrastructure because access to normal campus infrastructure is geographically prohibitive can charge the cost of the duplicative administration to the awards. Projects, however, must be remote from campus, making access to campus administrative services impractical. Also, be sure the costs are properly budgeted and justified in the proposal or rebudgeting documentation and are specifically identified to the project.

B6. My project takes place in rented space in downtown Oakland. Would this project qualify as "major" under A-21 definitions as "geographically inaccessible"?

Using location alone, probably not. For projects to qualify as "major" under this provision of A-21, they must be performed in areas remote from campus and their access to campus infrastructure impractical. However, even in downtown Oakland, it would be reasonable to assume that the project would need to duplicate some of the "normal" administrative services like photocopying. In this case, and with proper justification and documentation, photocopying costs, for example, could be allowed.

B7. My project, like many sponsored projects, collects data, prepares manuscripts and other technical reports and involves unpaid collaborators from other institutions. Would my project qualify as "major" under A-21 definitions?

Maybe. Remember, A-21 definitions for "major" are guidelines to help PIs decide if administrative and clerical salaries and wages are allowable costs, not to give overall definition or character to a project. In this example, is the amount of administrative and clerical effort related to data collection, manuscript preparation and the coordination of the collaborators more than a routine level? If so, then the administrative effort is probably "major" and any administrative costs necessary to perform these tasks would be an allowable direct cost to the project. If not, then probably not.

B8. My project budget is $500,000/year for 5 years. Surely this project is "major"!

Maybe. Size of an award alone does not make the administrative effort related to a project "major" according to A-21. What matters is the type of work proposed and the amount of administrative effort necessary to complete the technical scope. If the amount of administrative effort necessary is more than the routine level of support already provided by campus or the department or ORU, then the award could be major.


C. Distribution of Expense Between Two or More Projects

C1. My research group uses thousands of pipettes each year for our investigations. We conduct research under three separate awards all of which require pipettes to carry out the technical scope of the work. Each project proposal included the cost of pipettes in the budget and the cost was not specifically disapproved by the agency. To take advantage of bulk pricing discounts, we would like to purchase pipettes three cases at a time and would like to rotate the purchases between three sponsored agreements, charging three cases purchased in January to the NSF, three more cases purchased in March to the NIH grant, then three more cases purchased in June to the Packard award, to assure each award gets a share of the total pipette cost. Is this OK?

The costs are allowable as they are required for the technical scope of the projects, but rotating costs between awards does not meet A-21's redistribution standards. Instead, the group must distribute the costs to benefiting functions using some reasonable allocation basis like FTE, head count, square footage etc. The keys to a successful redistribution plan are:

A. all benefiting functions must share in the costs,

B. a reasonable basis for the redistribution is established, and

C. the redistribution basis is documented

C2. A year ago I bought a piece of technical equipment on my NSF award. This year, I also received a Sloan fellowship that is now making use of the NSF funded equipment. The NSF award has not expired. Do I now have to allocate part of the equipment purchased with NSF funds to the Sloan award?

No, you would not have to allocate a share of the original equipment purchase to the Sloan award. OMB Circular A-21 states (C4) "where the purchase of equipment or other capital items is specifically authorized under a sponsored agreement, the amounts thus authorized for such purchases are assignable to the sponsored agreement regardless of the use that may subsequently be made of the equipment" However, at the time of purchase if it is known that multiple projects would benefit from the purchase and the cost is allowable, the order should be funded by all benefiting sources in an appropriate proportion.

C3. I share off-campus space with 3 other researchers who each have a number of projects, sponsored and non-sponsored. In this space, we also share a central administrative staff. We all would like to charge our projects for the third party rent costs. How can we do this?

Charging sponsored awards directly for off-campus facility rent can be allowed. The keys to charging sponsored awards for off-campus rental costs are:

A. the costs must be allowable to the fund sources charged,

B. if some of the fund sources charged are sponsored awards, they must carry the off-campus overhead rate,

C. the rental costs must be equitably shared across all functions that occupy the space, including the administrative function, and a reasonable metric to determine the distribution must be documented.

So, for example, it would not be allowable to charge the entire rent to only three of the projects, and it would not be allowable to allocate rent costs only to the sponsored activity. It would also not be allowable to omit the administrative function from sharing in the rent costs. Be sure to use one of the two A-21 distribution methods and to maintain appropriate supporting documentation for the redistribution.


D. Administrative/Clerical Salaries and Wages

D1. A recently awarded NIH grant proposed a half-time Administrative Assistant to assist the research group with various administrative tasks including the submission of an IRB case for the use of animal subjects. The project is a standard NIH R01 grant and is to be conducted oncampus. In the award letter, the agency specifically disallowed the cost. The PI and the research project still need the administrative assistant. Can the PI pay for the AA's 50% salary & benefits from the NIH citing his rebudgeting authority and the A-21 "major project" exception for IRB preparation?

No. The costs in question are administrative in nature and would be subject to the allowability criteria for administrative costs established in A-21 and campus policy. While it is true that the PI does have rebudgeting authority and A-21 does allow for costs related to IRB preparation to be directly charged to sponsored awards under the "major project" definitions, the fact that the agency has specifically disallowed the cost makes it unallowable. Additionally, to have the project classified as "major" the effort related to the IRB would have to be administratively intensive. This example does not provide adequate justification for an administratively intensive exception.

D2. An Air Force (AFSOR) grant has been awarded to UCB with five major subawards and three major fabrications. UCB is the prime recipient and all subaward and fabrication costs have been detailed in the budget and budget justification. The original proposal budget did not provide for an administrative assistant to handle the coordination of the subawardees and the exceptional amount of purchasing and accounting the fabrications will require. The PI would like to rebudget to hire a full time administrator. Is this allowable?

Yes, assuming the PI has rebudgeting authority. The costs are administrative in nature and will need to meet the requirements of A-21 and campus policy to be allowable. Although the tasks involved in managing these aspects of the award are the same that the department business office would normally handle, the level of administration is not routine and could be directly charged to the award under A-21's "major project" definitions. The costs would, however, need to meet the other standards as well: they would need to be specifically identified to and benefit the project, included and justified in the rebudgeting documentation (provided the award allows for rebudgeting) and not specifically disapproved by the sponsor.

D3. I have a sponsored project that in addition to funding my research also includes funding for the hosting of a major conference. I employ an Administrative Assistant who will spend about 50% of his time coordinating the conference part of the sponsored award and another 15% of his time providing administrative support to the research part of project. Can I directly charge all of the administrative effort to the sponsored agreement?

For federal awards: Maybe. These administrative costs would need to meet the tests of allowability and then be properly documented to be charged directly to the award. The time spent coordinating the conference could be charged to the award, citing A-21 examples of a "major project" for conference coordination (provided the cost is identifiable to the award, budgeted and approved by the agency) but the effort devoted to research administration must meet the tests of allowability. In this example, the assistant's effort related to research administration has not been justified along A-21 guidelines. Therefore the salary would therefore need to be split: 50% charged to the sponsored award for conference coordination and 15% to other appropriate sources.

For non-federal awards: Sponsor policy would apply. If the sponsor allows for administrative costs and they have been budgeted, justified and approved by the sponsor they could be charged to the award. If the administrative costs have not been budgeted, justified and approved, the cost could be placed against the non-federal source provided the sponsor has not specifically disapproved the cost and the PI has followed the sponsor's rebudgeting terms.

D4. My NIH R01 grant has a travel budget of $10,000 for my 7 research staff to attend various professional conferences to present original research results, as required by the sponsored award. I plan to have my administrative assistant make the travel arrangements. Wouldn't my assistant's effort related to the travel arrangements be an allowable cost under A-21's major project exceptions?

Yes, but..

For federal awards: The administrative assistant's time, as an administrative cost, would need to comply with OMB A-21 guidelines to be directly charged to a federally sponsored award. Additionally, administrative effort related to travel arrangements would need to be beyond the level of services provided by the department. If we assume the costs have been budgeted and justified in the proposal and not specifically disapproved by the sponsor then the effort related to making travel arrangements could be allowed. However, the amount of time your assistant actually spends on making travel arrangements may not be worth the administrative effort related to documenting and tracking the expense.

For non-federal awards: Sponsor policy would apply. If the sponsor allows for administrative costs and they have been budgeted, justified and approved by the sponsor (or if the costs were not originally proposed but the PI has followed the sponsor's rebudgeting terms) they could be charged to the award.

D5. My NIH award involves several hundred human subjects who require an extensive amount of administrative effort to recruit, track and document. I estimate that this effort would take a clerical staff person about 1/2 time. I also have about 1/4 time of additional general clerical needs for the research project plus I teach three courses and need 1/4 time of clerical assistance for course preparation. Can I charge 100% of my administrative assistant's salary and support costs to my NIH?

No. Clearly, the administrative effort in support of the human subjects is an allowable administrative expense. It meets the A-21 major project requirement, and assuming it was proposed, justified, and approved by the sponsor or has been properly rebudgeted for, it can be directly charged to the sponsoring NIH award. However, only the level of effort related to the human subjects' management could be charged directly to the NIH award (50% time). The balance of the AA's effort, which is related to either routine administrative tasks or to teaching, would not meet the tests of allowability under A-21 and campus policy. This level of effort (50% time) would need to be charged to other eligible fund sources.

D6. But I have no other fund sources and the university does not provide the level of service I need to accomplish all that is required of me as a faculty member. I have no choice but to charge 100% of the AA's time to the NIH award. Besides, the sponsor approved a 100% administrative position. How can I make sure the cost is not disallowed in an audit?

There is no way to guarantee any cost from disallowance! But you can take a series of steps to help build a solid case of allowability: identify and carefully justify costs in the original proposal, charge costs in strict accordance with the approved budget or within rebudgeting authority, and document charges made to sponsored awards with accepted means of documentation. These elements together build a solid case for allowability. The lack of other eligible fund sources is never justification for directly charging administrative costs to sponsored awards.

In this example, while the administrative position in question has been approved by the agency at 100% effort, the actual amount of effort spent is significantly less. Only the amount of effort spent in allowable activities related to this award can be directly charged to the award regardless of the amount approved by the sponsor. The effort spent in non-research related roles will need to be transferred to other eligible fund sources.

D7. I have a really large group (about 50 people total) and 8 federal and 6 non-federal awards. The size of my group requires a level of administrative effort above and beyond what my department can provide to help me manage the group's activities (coordinate hires and purchases, perform financial analysis to manage all the different funds, assist with technical reports preparation, etc); all tasks that I, as PI, would have to do that take away from time spent in technical research roles. Could I allocate the cost of my AA's salary to each award using a reasonable metric such as project FTE?

The costs are definitely administrative but under A-21 and campus policy would need to meet the tests of allowability to be directly charged to sponsored awards. Making a case for federal allowability based upon the group's total funding profile or size as a "major project" would not meet the standards of A-21. However, on an award by award basis, if the administrative effort could be justified as above the routine level of support provided by the department and necessary to the completion of the project, it could be allowed. Using a reasonable metric such as project FTE to redistribute the costs would be acceptable. For non-federal awards, as long as the costs are budgeted and justified and within the sponsor's policy, they could be allowed.

D8. How do I handle the time and effort my clerical staff spend in helping me prepare grant proposals? Does it matter if the proposal is a competing renewal?

For federal awards: Clerical staff effort spent preparing new proposals, including competing renewals, can never be charged to federal awards. In fact, technical personnel cannot charge their time spent preparing new proposals to active federal awards. The preparation of required interim reports, like non-competing progress reports and budget reports because they are required for the project, however, could be charged with proper justification and documentation.

For non-federal awards: Sponsor policy would apply. If the sponsor allows for administrative costs and they have been budgeted, justified and approved by the sponsor (or if the costs were not originally proposed but the PI has followed the sponsor's rebudgeting terms) they could be charged to the award.

D9. I have an administrative assistant who performs searches for vendors for technical pieces of equipment. She also prepares technical and budgetary reports for my sponsored awards, prepares detailed job descriptions for potential research hires and monitors the financial status of my awards. These are all tasks that my departmental office does not perform. Wouldn't her effort be an allowable cost to my sponsored projects as "more than the routine level of effort"?

Maybe. For federal awards: The administrative assistant's time, as an administrative cost, would need to comply with OMB A-21 guidelines to be directly charged to a federally sponsored award. Additionally, administrative effort related to these activities would need to be beyond the routine level of services provided by your department or ORU. If the costs have been budgeted and justified in the proposal and not specifically disapproved by the sponsor, the effort related to these activities could be allowed. However, the amount of time your assistant actually spends on performing these tasks may not be worth the administrative effort related to documenting and tracking the expense.

For non-federal awards: Sponsor policy would apply. If the sponsor allows for administrative costs and they have been budgeted, justified and approved by the sponsor (or if the costs were not originally proposed but the PI has followed the sponsor's rebudgeting terms) they could be charged to the award.


E. Computers

E1. My laboratory needs three computers for internet access and e-mail. I have 3 federal awards that will benefit from the computers and I intend to allocate a share of the purchase to each award. I need these machines to perform basic, everyday communication. My research would cease if I didn't have them. Is charging these computer purchases to my sponsored research going to be a problem?

Computers (inventorial and non-inventorial) used to accomplish the technical scope maybe charged directly to sponsored awards provided they can be specifically identified to and benefit the project, are included and justified in the budget and are not specifically disapproved by the sponsor. Computers used for administrative work would need to meet the tests of allowability to be directly charged to a sponsored award. In this example, the computers used for general communication could be directly charged as they are required for the technical conduct of the sponsored agreement, provided they have been proposed and justified and not specifically disapproved by the sponsor, but would need to be justified along A-21 guidelines for major projects if an administrative cost. In either case, the cost should be distributed to all benefiting activities using a reasonable basis described by A-21 or in campus policy.

The federal government is particularly sensitive to computer purchases on federal awards. This is an area they routinely review. Care must be exercised to assure that computer purchases are properly justified and documented when charged to federal awards.

For non-federal sponsors: Sponsor policy would apply. If the sponsor allows for computer costs and they have been budgeted, justified and approved by the sponsor they could be charged to the award. If the computer costs have not been budgeted, justified and approved, they could be placed against the non-federal source provided the sponsor has not specifically disapproved the cost and the PI has followed the sponsor's rebudgeting terms.

E2. My laboratory graduate students require a computer to help them write papers and perform data analysis. Another computer that will be attached to a piece of laboratory equipment to run the experiment and collect data is also needed. A third computer is needed for general administrative tasks related to my project and used by my Administrative Assistant whose salary is charged in part to my sponsored award. Can I charge all three computers to my NSF award?

Computers (inventorial and non-inventorial) used to accomplish the technical scope maybe charged directly to sponsored awards provided they can be specifically identified to and benefit the project, are included and justified in the budget and are not specifically disapproved by the sponsor. Computers used for administrative work would need to meet the tests of allowability to be directly charged to a sponsored award. In this example, the computers used for the graduate student efforts and the computer used to perform experiments and collect data could be directly charged as they are required for the technical conduct of the sponsored agreement, provided they have been proposed and justified and not specifically disapproved by the sponsor. The computer for the AA, however, could be charged to the sponsored award using the interrelationship rule and the AA's FTE to apportion the cost between the NSF award and the other sources of salary funding for the AA assuming that the AA's salary meets A-21 and campus policy for allowability and is charged appropriately.

The federal government is particularly sensitive to computer purchases on federal awards. This is an area they routinely review. Care must be exercised to assure that computer purchases are properly justified and documented when charged to federal awards.


F. Reduced Overhead Rates as Justification for Administrative Expense

F1. My project takes place in rented space in downtown Berkeley and awards performed in the space carry an off-campus F&A (overhead) rate. Is the lower overhead rate enough justification to directly charge my administrative assistant's salary and benefits to my awards?

For federal awards: No. The application of an off-campus F&A rate alone is not adequate justification. The AA's salary would still need to meet the tests of allowability under A-21 and campus policy to be directly charged to federal awards.

For non-federal awards: If the expense has been budgeted, justified and approved by the sponsor, yes, it can be directly charged to the award. If the expense has not been budgeted, justified and approved by the sponsor, the expense could be charged if the PI has rebudgeting authority and has rebudgeted and justified the expense, and the expense has not been specifically disallowed by the sponsor (either through the proposal process or through sponsor policy).

F2. The indirect cost rate for my NIH training award is capped at 8%. Can I charge my Administrative Assistant's salary and benefits to the award because the amount of indirect cost recovery is significantly less than the standard research rate? The AA administers the training program.

A reduced or capped indirect cost rate does not change the allowability of costs that are normally indirect. The AA's salary could be charged to the training award if the cost was specifically budgeted and justified, not disallowed by the funding agency and must be for administrative effort that is greater than the routine level of services normally provided by department administrative staff.


G. Agency Approval Alone Is Not Ample Justification for Administrative Expense

G1. My NIH R01 award proposed and the agency funded a 50% time Administrative Assistant position. The project does not seem to meet A-21's definitions of "major". Can I go ahead and charge the assistant's salary to the R01?

No. In order to directly charge administrative expenses to federal sponsors, the administrative expenses must meet the criteria set forth in A-21 and campus policy regardless of the sponsor's approval.


H. Documentation Requirements

H1. Campus' Cost Principles for Sponsored Agreements policy says that the department must maintain proper documentation for all charges made to sponsored awards. What does "proper documentation" mean?

Payments to vendors, payroll and benefit costs through campus hires, subawards, journal entries from other campus entities such as recharges, reimbursements for expenses or travel claims are all examples of direct charges to sponsored awards. It is expected that each of these charges would be supported by documentation that indicates the PI's consent for the charge and documents the appropriateness of the costs. Vendor payments, for example, should be supported by a request (dated and signed) from the PI or designate which indicates the specific items to purchase and the sponsored award to charge, a packing slip as proof of receipt and an invoice detailing items and their cost. Payroll expenses are supported by payroll detail and effort reports signed and dated by the employee or PI indicating the awards charged. For any redistribution methodology, the verified log sheets or the allocation methodology with PI's signature approval would need to be kept as documentation.


I. Delegation of Authority

I1. Can PIs designate members of their research staff for purchasing, hiring authority, etc.?

OMB Circular A-21 (C4d(4)) says "if the institution authorizes the principal investigator or other individual to have primary responsibility ... for the management of sponsored agreement funds, then the institution's documentation requirements for the actions of those individuals (e.g., signature or initials of the principal investigator or designee or use of a password) will normally be considered sufficient". Thus, a designee can be identified but this must be done within the policies already in existence for each specified item of cost. This means that in some cases authority cannot be delegated because it is prohibited by other campus policies.


J. Specifically Disallowed Costs

J1. A distinguished scientist is coming to visit my lab to learn about a novel procedure we've developed under a sponsored award. After touring our lab and receiving a demonstration of the procedure, my laboratory staff and I will take our guest to lunch. We would like to charge the lunch to the NIH award which sponsored the work that led to the new procedure. Is this allowable?

The expense would have to meet the tests of allowability and not be specifically disallowed. There does not seem ample justification to qualify the expense as technical (it is not necessary to carry out the technical scope of the sponsored work). It also does not seem to qualify as an allowable administrative expense under the exceptions allowed by A-21 and campus policy. The expense appears to be an entertainment expense for social purposes and would be specifically disallowed as a direct cost by A-21 and campus policy. Other expenses that are expressly disallowed as direct charges to federal awards by A-21 and campus policy are:

  • Alcoholic beverages
  • Alumni activities
  • Automobiles for personal use
  • Attorney's fees for defense against federal government claims
  • Bad debts
  • Entertainment costs of a purely social nature
  • Fines and penalties
  • Goods and services for personal use
  • Lobbying costs
  • Proposal preparation costs
  • Parking permits for personal use, such as travel to and from work