Costs are charged to sponsored projects as direct line item expenditures or through the indirect cost recovery charge. Direct charges include salary of faculty, students and others working directly on the project as well as materials and supplies used on the project and travel incurred in carrying out the project goals. Administrative and facilities costs are recovered by the university through the indirect costs charged to the project. Indirect costs include administrative salaries, office supplies and equipment, and other costs that are incurred to meet common or joint objectives and can't be readily identified to a particular project. The Federal government has provided guidelines regarding costs that can be direct charged to federally sponsored projects including subawards in Office of Management and Budget Circular A-21 (OMB A-21).
The University Of Massachusetts Dartmouth Policy On Direct And Facility And Administrative Costs is based on the requirements of OMB A-21 and best practices at other research institution.
Direct Charging of Costs Normally Considered Indirect Costs
Costs normally treated as Facility and Administrative costs (indirect costs) cannot be direct charged to a federally sponsored program unless the specific circumstances of the project results in an unusual need for them. The federal government allows the direct charging of these costs only in unusual or unlike circumstances that are described in OMB A-21. In order for these types of expenses to be direct charged to a project, the budget justification approved by ORA and submitted to the sponsor must contain detailed justification of the costs explaining the unique need for them. If the need for these costs is identified after the award is received by the university, sufficient justification must be provided to ORA for approval at that time.
Examples of projects where direct charging of these costs may be appropriate include but are not limited to:
- Large complex projects
- Projects involving extensive data collection
- Projects involving the need to make travel and meeting arrangements for a large number of participants
- Projects involving remote locations such as research vessels
Following is a list of the more common costs that are included in the indirect cost recovery and examples of situations where they may be allowed as direct charges to sponsored projects upon proper justification and approval.
Proper justifications for nonsalary costs require a complete description of each item along with an explanation as to why the item is necessary in order to complete the project, how each item is related to the specific aims of the project and how each item meets a special need and is different from the other similar items provided by the department and recovered through indirects.
Proper justification of personnel costs requires name, title and percent effort along with a description of the specific duties the individual will perform and how those duties advance the programmatic requirements of the project as well as an explanation of how these duties differ from those performed by a typical departmental administrator.
Books and periodicals that are available through the library or university subscription are not allowed as direct charges. If the book or periodical is not otherwise available and it is specific solely to the project and necessary to the project it may be allowed with proper justification. Books and periodicals that will be used to gain a general knowledge in a field of work would not be specific to the project and not allowed. Books and periodicals containing specific information that is required to complete specific goals and aims of a project would be allowable if not found in the library.
Membership Dues in Professional or Technical Organizations
Where membership dues are required to attend a conference which is part of the sponsored project they are allowable with appropriate documentation.
If the dues are required to subscribe to a periodical (that is allowed per the above paragraph as being specific to the project) the dues may be allowed with appropriate justification.
If the membership results in reduced conference registration fees and results in a net lower cost the dues may be allowable with proper justification.
Office Supplies and Office Equipment
General purpose office supplies and equipment are included in the indirect costs. Office supplies and general office equipment include paper, pens, toner, general purpose software, desk organizers, file cabinets, file folders. Exceptions may occur when the purchase of the supplies is extensive in nature and can be specifically identified to the project.
Following are some examples:
- Paper may be allowed if the primary focus of the project is to produce manuals, large reports and books.
- Paper and envelopes may be allowed if a large survey is part of the scope of work to be performed.
- Folders may be allowed for filing lab results or survey responses.
- Data Storage Supplies may be allowed if the project involves extensive data collection.
- Computers and computer supplies are considered general office supplies or equipment because they are used for a variety of functions. If they are used primarily (95%) on one project to meet the technical requirements of the project the purchase may be allowed. The need for them must be described in detail in the proposal or on request to purchase if not in the proposal. Allowable use includes a computer being used to control a scientific instrument or solely to gather and analyze data, or the need for the computer at a remote location such as a research vessel. In all instances, computers and computer supplies must be directly linked to the research project to be allowable.
Printing and Publications
Printing, binding, copying and publications of reports that disseminate the research results of the specific project are allowable. General correspondence and copying of proposals are not allowed as a direct charge on sponsored projects.
Routine postage in support of the institutions various functions is recovered through the indirect rate. Postage maybe allowed if there is a demonstrated need for extensive postage cost in order to meet the technical goals of the project such as a project with an extensive mail survey, shipment of research materials and shipment/mailing of deliverables and information to be reviewed by several project participants.
Shipping of samples, equipment and parts is allowable.
The cost of local telephone lines, including installation and recurring monthly charges, used to conduct routine business is not allowed. Exceptions include phone lines to conduct surveys.
Cell Phones and Pagers
These are normally considered local telephone costs and not allowed unless there is a need to maintain contact from a remote location such as a research vessel.
Administrative and Clerical Support
Administrative and clerical support is only allowed as a direct cost if all of the following are met:
- Costs are required by the project's scope of work.
- Costs can be easily identified to the specific project.
- Costs represent a unique need which is different from similar costs included in the indirect cost recovery.
Examples of projects that may require extensive administrative and clerical support are:
- Large complex programs such as research centers, program projects that involve managing teams of investigators from a large number of institutions.
- Projects involving extensive data collection, entry, and cataloging.
- Projects require making substantial travel and meeting arrangements for a large number of participants.
In all cases, justification for any exception to direct charge an expense otherwise recovered through indirects must be thorough and demonstrate the specific unusual need for the item to meet the technical requirement of the project. The statement that "an item was needed for the research" does not meet this Circular A-21 requirement.
Please don't hesitate to contact ORA staff with any questions.