To establish guidelines for the charging and approval of direct cost expenditures on federal awards.
June 2023Responsible Office
The Principal Investigator is responsible for the management and administration of their award within the constraints imposed by the sponsor and in accordance with University policies. The Principal Investigator must authorize all expenditures of project funds.
In some cases, the terms and conditions of the award may require that the sponsor give specific approval for certain direct costs either as part of the specific grant or contract, or subsequent to the initiation of the project.
For grants, many federal agencies have delegated most of these required direct cost prior approvals to the University under the “expanded authorities” or “waiver of authorities” set forth in 2 C.F.R. Chapter I and Chapter II. The University has further delegated this authority to the Principal Investigator, subject to them providing and /or maintaining documentation of the appropriateness of the expense in conjunction with the project, and having applied the factors of allowability, allocability, and reasonableness regarding the cost prior to processing the expenditure.
For federal contracts, prior approvals are often required for certain direct cost expenditures, and it is the Principal Investigator’s responsibility to ensure that such approvals are obtained, in writing, through Research Services from the agency before funds are expended.
In order for a direct cost to be an allowable cost on a sponsored project, the cost must be:
Sponsor limitations on specific items of direct cost expenditures are included or referred to in the Notice of Award and should be reflected on the Account Information Sheet (AIS). In the event of inconsistency, the Notice of Award takes precedence.
The Principal Investigator or the departmental Business Administrator must maintain adequate supporting documentation to relate expenditures to the purpose of the award.
Certain costs may not be charged to sponsored projects either as direct costs or as part of the F&A rate. See Policy No. 2111 for a description of unallowable costs.
The salaries of Administrative and clerical staff should normally be treated as indirect (F&A) costs. Direct charging of these costs to federally sponsored project awards may be appropriate only if ALL of the following conditions are met (2 C.F.R. §200.413):
Other costs not normally charged directly include postage, telephone line and equipment costs, membership costs, office equipment and electronic devices including copiers, laptops, desktop computers, personal handheld computers, fax machines, scanners, flashdrives, that are used for general office purposes (rather than justified as a specific research purpose) as set forth in (2 C.F.R. §200.439). In order to charge these costs directly to Federal projects, the costs must be clearly identified in the University approved proposal budget with a detailed explanation provided which justifies the necessity for the costs. In such cases where detailed budgets are not provided to the sponsor and therefore such costs are not evident, specific prior approval of Research Services is required. If such costs are determined to be necessary after the award is received and not included in the proposal, a determination of allowability must be made by Research Services as well as determining sponsor prior approval requirements.
Office of Research Services
The source of this document is Research Services.