Direct costs are those which are charged directly to the sponsored project account. The basic considerations for determining the allowability (see CFR Reference §200.403) of costs are:
- Costs must be reasonable. This is defined as the action a prudent person would have taken under the circumstances (see CFR Reference §200.404).
- Costs must be allocable to sponsored agreements under the principles and methods described in the Uniform Guidance (see CFR Reference §200.405).
- Costs are incurred to benefit the specific sponsored project and able to be assigned to the project with a high degree of accuracy.
- Costs must be given consistent treatment through the application of generally accepted accounting principles appropriate to the circumstances.
- Similar costs are normally treated as either Direct or Indirect across the University.
This is a quick reference guide for selected expenses on Federally sponsored projects. The specific wording in the Uniform Guidance should be referred to for greater detail. Refer to Subpart E for specific cost principles: http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl. It is important to review each award’s terms and conditions as individual sponsors and awards may be more restrictive, and any relevant university purchasing policies must also be followed.
For questions regarding specific purchases, please contact your Research Officer.
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Type of Cost |
CFR Reference |
Allowed as a Direct Cost |
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Advertising/Public Relations |
Allowable only if related to and necessary for performance of the sponsored project. Unallowable for advertising related to the image of the University, or events related to instruction or institutional activities, promotional items. |
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Alcoholic Beverages |
Unallowable |
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Alumni/ea Activities |
Unallowable |
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Bad Debt |
Unallowable |
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Books |
Allowable but are normally treated as indirect costs because their purpose is more general in nature – i.e., furthering a PI’s knowledge in their field – and cannot be identified with a high degree of specificity to an individual research project. Examples of books that can be included: a book or journal is not available in the library and can be associated specifically with the sponsored award; a book or journal is available from the library but is utilized so frequently for a specific award that a library copy is not sufficient; or a book contains a specific research technique or information that will introduce efficiencies to the research or improve the quality of results. Unallowable for books normally found in a library and general or reference texts that are generally available in the library or on-line. Books, manuals, reprints that generally assist the PI in keeping up with their field of research. Publications that provide a general benefit to research and teaching activities. Also see Memberships, Subscriptions & Professional Activity Costs below. |
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Compensation for Personal Services |
Salaries, wages, and fringe benefits of personnel who directly contribute to the project (faculty, post doc, research associate, graduate and undergraduate student) are allowable. Administrative and clerical staff may be allowable only if they are integral to the project or activity. “Integral” means essential to the project’s goals and objectives, rather than necessary for the overall operation of the institution. The individuals involved must be specifically identified with the project or activity. Prior written approval of the awarding agency must be obtained. The budget justification must include a narrative that explains how these services are integral to the project. |
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Computers, Laptops and Computing Devices |
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For computers with a unit cost less than $5,000, see Materials and Supplies below. Also see the page Charging Computers to Sponsored Projects. For computers with a unit cost of $5,000 or greater, see Equipment below. |
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Donations and Contributions |
Unallowable |
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Entertainment Costs |
Unallowable -includes amusement, diversion, and social activities |
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Equipment |
Allowable only for special purpose equipment used exclusively for research, medical, scientific, or other technical activities. Prior approval from awarding agency is required for items with a unit cost of $5,000 or more. Unallowable for general purpose equipment not used exclusively for research (i.e., office equipment and furnishings, modular offices, telephone networks, AC equipment, printing equipment, etc) |
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Fines and Penalties |
Allowable only when incurred as a result of compliance with specific provisions of the sponsored agreement, or instructions in writing from the authorized official of the sponsoring agency |
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Fund Raising |
Unallowable |
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Goods or Services for Personal Use |
Unallowable |
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Human Subject Payments (Research Participants) |
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Human Subject Payments include cash, checks, gift cards, gift giveaways, food, drawings, etc. given to incentivize participation in research and are consistent with the approved IRB protocol. These payments/incentives must be directly related to research activities and pre-approved by the sponsor. Human Subject Payments do not include costs that would fall under Participant Support Costs (see below). See page Research Participant Payments for more information. |
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Lobbying |
Unallowable |
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Losses on Other Sponsored Agreements or Contracts |
Unallowable |
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Maintenance & Repair Costs |
Allowable as necessary to keep property in an efficient operating condition necessary for the performance of the sponsored project. Must be approved by funding agency. The timing of the repairs in relation to the project end date should be taken into consideration. Unallowable for costs incurred for necessary maintenance, repair, or upkeep of buildings & equipment, which neither add to the permanent value of the property not appreciably prolong its intended life. |
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Materials and Supplies Costs, including Computing Devices |
Allowable as a direct cost when necessary for the performance of the sponsored project. In the specific case of computing devices, charging as direct costs is allowable for devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award. University-funded activities such as instruction and administration should bear at least their fair share of the acquisition expense. Also see the page Charging Computers to Sponsored Projects. Unallowable for routine office supplies (pens, paper, disks, folders, printers, copy charges, fax, postage, etc.) used by the department. |
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Meetings & Conferences |
Allowable when the primary purpose is the dissemination of technical information directly related to the sponsored project. This includes meals, transportation, rental of facilities, speakers’ fees and other items incidental to such meetings or conferences. Must be budgeted in sponsored project. Unallowable for “Entertainment Costs” |
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Memberships, Subscriptions & Professional Activity Costs (including Books) |
Allowable for the institution’s (not the individual's) membership in business, technical, professional organizations, and subscriptions to business, professional, and technical periodicals. However, this should normally be treated as an F&A cost. Memberships, subscriptions, professional activity costs, and books are normally treated as indirect costs because their purpose is more general in nature – i.e., furthering a PI’s knowledge in their field – and cannot be identified with a high degree of specificity to an individual research project. Unallowable for membership in any civic or community organization, country club, social or dining club. General or reference texts that are generally available in the library or on-line. Books, manuals, reprints that generally assist the PI in keeping up with their field of research. Publications that provide a general benefit to research and teaching activities. Subscriptions to journals. Memberships to professional organizations (unless it reduces the overall cost of attending the conference or submitting an abstract). |
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Participant Support Costs |
Allowable with the prior approval of the Federal awarding agency. Participant support costs means direct costs for items such as 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. This does not include incentive payments for research participants (see Human Subject Payments above). See page Research Participant Payments for more information. |
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Patent Costs |
Allowable if required by the sponsored project. Unallowable for foreign patents |
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Pre-Award Costs |
Allowable to the extent that they are necessary, would have been allowable if incurred after the award date, and with prior written approval from the awarding agency. |
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Professional Services Costs |
Allowable when necessary for the performance of the sponsored project. |
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Proposal Costs |
Costs of preparing bids, proposals, or applications on potential Federal and non-Federal awards or projects, including the development of data necessary to support the bids or proposals are unallowable. |
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Publication and Printing Costs |
Allowable if the costs can be identified with the sponsored project. For page charges, they are allowable if the work is supported by the Federal Government and the charges are levied impartially on all research papers published, not just those funded by federally sponsored authors. Unallowable for routine copy and printing costs. |
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Rearrangement and Alteration Costs of Facilities |
Allowable with prior approval of the awarding agency and incurred specifically for the sponsored project. Unallowable for ordinary or normal rearrangement or alteration of facilities. |
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Recruiting |
Allowable when recruiting personnel required for the performance of the award. |
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Rental Costs of Buildings and Equipment |
Allowable when specifically for the sponsored project |
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Royalties and Intellectual Property |
Allowable when necessary for the performance of the sponsored project. Unallowable when the Federal Government has a license or the right to free use of the patent or copyright; or when the patent or copyright has been adjudicated to be invalid, has been administratively determined to be invalid, is considered to be unenforceable, or has expired. |
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Scholarships and Student Aid Costs |
Allowable only when the purpose of the sponsored agreement is to provide training to selected participants and the charge is approved by the sponsoring agency. In order to pay tuition, a stipend must be paid, and the student must be enrolled in an advanced degree program. The activities of the student in relation to the project must be related to the degree program and compensation must be conditioned explicitly on their performance of the work. Must be a bona fide employer-employee relationship. Additional information regarding can be found in the Guidelines for Charging Graduate Student Tuition Remission on Sponsored Projects. |
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Student Activity Costs |
Unallowable unless specifically provided for by the sponsored project. Includes intramural activities, student publications, student clubs, and other student activities. |
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Telephone Costs |
Long distance phone calls allowable only if related to and necessary for the performance of the sponsored project and can be directly identified and allocated. Unallowable for line charges, network charges, local phone costs. |
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Termination Costs Applicable to Sponsored Agreements |
Allowable for costs which would not have arisen had the sponsored agreement not been terminated, provided they meet the requirements of the Uniform Guidance. |
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Training Costs |
Allowable for training provided for employee development for a specific sponsored project. |
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Transportation (Freight or Postage Costs) |
Allowable when related to goods purchased specifically for the sponsored project. Postage or express mailing expenses are generally treated as indirect costs. |
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Travel Costs |
Allowable for transportation, lodging, subsistence and related items for employees who are in travel status on project-specific business, subject to University policy. Unreasonable travel costs are unallowable (including airfare costs in excess of the lowest available commercial discount airfare except when justified and documented) For Foreign Travel, PI(s) should keep the Fly America Act in mind when booking flights. See the page Charging Travel to Sponsored Projects for more information on travel. |