University of Georgia policy, in accordance with OMB A-21, defines costs as allowable or unallowable. Allowable costs must be treated as direct or F&A costs. There may be exceptions when OMB guidelines permit the direct charging of costs normally treated as F&A. If there is a conflict between agency and University policy, the more restrictive of the two applies. The following is an alphabetical list of allowable costs.
Advertising
The recruitment of personnel required for the performance of a sponsored project, and the procurement of goods and services for the performance of a sponsored project may be treated as a direct cost.
Communication Costs
· Local Charges - Local telephone, internet service, and data line charges are normally allowable as F&A costs.
· Long Distance Charges - Long distance calls, telegrams, long distance fax charges, and various other communication expenses specific to a project may be directly charged. (Note: Installation charges, line charges, pagers, etc. are considered F&A costs and should not be charged directly to sponsored projects.)
· Cell Phones –Only in specific circumstances may cell phone costs be charged directly to a sponsored project. These costs must be approved prior to proposal submission by OSP. Use the Request for Approval for Wireless/Cellular Service
· Postage - Routine use is treated as F&A costs. Expenses specific to a project may be directly charged, but these do not include mailing technical reports and other project correspondence. The difference between postage (F&A) and freight (direct) is driven by the item(s) being sent, not the means by which it is sent.
Equipment
Capital Equipment are items used on a specified project or contract with an acquisition cost greater than $5,000. See subsection under Materials, Supplies, Services, and Special Tooling for information regarding equipment fabrication.
Materials, Supplies, Services, and Special Tooling
Costs incurred for materials, supplies, and fabricated parts necessary to carry out a sponsored agreement are allowable.
· Note: Books - normally found in the University Library are generally treated as a F&A cost. As such, a request to purchase books must be justified in order to charge the cost as a direct cost).
· Note: Office Supplies and General Purpose Equipment –These items of cost are allowed as facilities and administrative costs. Costs include those incurred in support of routine administrative activities associated with instruction, public service, research and other institutional activities. This category includes, for example, computers (under $5,000), printers, monitors, digital cameras, fax machines, printer paper, toner cartridges, pens, pencils, legal pads, clips, rubber bands, post-it notes, notebooks, binders, folders, diskettes, CD-ROMs, and departmental stationery. The only exceptions are those wherein the purchase of the supplies is extensive in nature, can be specifically identified to the project and meets the definition of a direct charge adequately justified in the budget and approved prior to proposal submission.
- Computers and Peripherals - can either be charged as scientific (direct) or general purpose (F&A) depending upon the actual usage of the item. For example, computers are necessary to the overall administration of a sponsored project; purchasing computers for this purpose would generally be considered an F&A cost. However, purchasing a computer to control and monitor scientific equipment represents a different circumstance or use of that equipment and would typically be allowed as a direct charge. This would be a line item in the budget and would need to be adequately justified. http://www.busfin.uga.edu/procurement/
- Non-Capital Equipment - apparatus and other articles used on a specified project or contract with an acquisition cost of less than $5,000.
- Equipment fabrication - occurs when multiple items, which could be classified as supplies (some having acquisition costs of $5,000 or less), are purchased to create/fabricate an integrated unit of equipment having a total value of $5,000 or more. In these instances, the individual purchases should be accounted for as equipment. See PropertyControl Accounting
Maintenance and Repair Costs
Costs incurred for necessary maintenance, repair, or upkeep of equipment, which do not add to the permanent value of the property nor appreciably prolong its intended life, but keep it in an efficient operating condition, are allowable.
Meetings and Conferences
Costs of meetings and conferences, the primary purpose of which is the dissemination of technical information, are allowable. These include costs of meals, transportation, rental of facilities, speakers' fees, and other items incidental to such meetings or conferences.
Memberships, Subscriptions and Professional Activity Costs
Institutional memberships (professional organizations), subscriptions (technical periodicals), and professional activities are normally treated as an F&A cost.
Costs of membership in any civic organization, country club, social, or dining club are unallowable. An individual membership or subscription to a professional group or periodical may be allowed as a direct charge if the following can be demonstrated:
- The membership creates a cost-savings to attend a conference at which research results specific to a project will be presented, or membership is mandatory in order to present a paper specific to the project or
- The sole purpose of the membership is to purchase a periodical at a reduced rate, and the periodical is not available through the institution’s library services and the periodical is necessary for the sponsored project.
Personal Services
The salaries and wages of university employees and related staff benefits required to complete a sponsored project (including but not limited to Principal Investigator’s academic and summer salary, postdoctoral research associates, technicians and graduate students) should be budgeted, charged and reported as a direct cost under this category of expenditure. Salaries and wages include holiday, vacation, and sick pay as appropriate. Expenses used in computing fringe benefits are: (a) Social Security; (b) Teacher’s Retirement; and (c) Group Life and Medical Insurance.
As a rule, administrative and clerical salaries are treated as indirect costs, except as outlined in the following guidelines. These are considered Office of Management and Budget (OMB) exceptions. A non-exhaustive list of administrative and clerical positions includes fiscal officers, accountants, secretaries, directors, vice presidents, president, office personnel, executive assistants, and administrators.
When Administrative and Clerical Salaries and Staff Benefits Can Be Charged as Direct Costs:
Salaries and fringe benefits of administrative and clerical staff may be charged as direct costs in instances where sponsored projects require the services of administrative and clerical staff beyond the normal level provided by departmental administrators paid from a “GJ” account. The total cost of these services may be budgeted, charged, and reported as a direct cost to a sponsored project when all of the following conditions apply:
1. The specific type and nature of the services are not provided by the departmental administration account; and
2. The services are required by the project’s scope; and
3. The cost can be accurately identified to the project, and
4. The approved project budget narrative clearly describes the need for the service.
For example, charging administrative and clerical salaries and fringe benefits as a direct charge to a sponsored project may be permissible for projects that:
Involve extensive data accumulation, statistical analysis and entry, database management, surveying, tabulation, cataloging, and researching literature.
Involve the preparation and production of manuals and large reports or books. This does not include routine progress and technical reports.
Require making extensive travel and meeting arrangements for large number of participants, such as conferences and seminars.
Involve the management of a project at locations that are geographically inaccessible to normal departmental administrative services, such as research field sites remote from campus.
Require special research security services at a level not normally provided by campus security.
Are large, complex programs (such as general clinical research centers, primate centers, environmental research centers, engineering research centers, and other federally sponsored projects) that entail assembling and managing teams of investigators from a number of institutions or units. National Institutes of Health R01 grants do not qualify as complex programs.
These examples are not an exhaustive list, nor do they imply that direct charging of administrative or clerical salaries would always be appropriate for the situations illustrated in the examples. Individual projects cannot be grouped together to meet any of the criteria listed above.
It is the responsibility of the Principal Investigator (PI) or Project Director to support and justify in the proposal all direct costs to be charged to a sponsored award. The Office for Sponsored Programs will approve direct costs that meet Cost Accounting Standards exceptions guidelines.
Professional Service Costs
Costs of professional and consultant services rendered by persons who are members of a particular profession or possess a special skill, and who are not officers or employees of the institution are allowable. Refer to the specific agency’s policy and/or the UGA Purchasing Personal Services Policy and UGA Consulting Form.
Proposal Costs
Proposal costs for both successful and unsuccessful bids are treated as F&A costs.
Publication and Printing Costs
- Printing, Binding, Publication - These costs are normally direct charges to a contract and grant account. The charge must be able to be specifically identified to a particular project with relative ease and high degree of accuracy, and that cost must provide a direct benefit to that project during the award period.
- Copying Costs –Invoices from outside copy services should be retained as documentation to support the charge. Charges from the use of a departmental copier must be based on a per-copy charge and must be based on a cost study (refer to recharge center definition in Service Center policy). The associated expenses of the copy machine such as toner cartridge, paper, etc. can not be charged directly to a contract or grant because it is impossible to allocate these costs among the many users of the machine. The per-copy cost must be based on total utilization of all activities (research, instruction, public service and other), not just research usage. Use documentation must be maintained through a utilization log. Costs of copying proposals or general correspondence not related to a specific project are not considered a direct charge.
Rearrangement and Alteration Costs
Rearrangement and restoration of the University's property or rented property, to the extent approved by the awarding Contracting Officer and sponsoring agency, is allowable.
Rental Costs of Buildings and Equipment
The rental costs of facilities (buildings, office space and laboratory space) and equipment not owned by UGA are allowable. They are allowable to the extent that the rates are reasonable in light of such factors as: rental costs of comparable property, if any; market conditions in the area; alternatives available; and the type, life expectancy, condition, and value of the property leased. Rental arrangements should be reviewed periodically to determine if circumstances have changed and other options are available.
Scholarships and Student Aid Costs
Costs of scholarships, fellowships, and other programs of student aid are 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.
Specialized Service Facilities
The costs of services provided by highly complex or specialized facilities operated by the institution are allowable as direct costs (refer to the the UGA Service Center Policy 4.16).
Training Costs
The cost of training provided for employee development is allowable provided it is project specific, approved by the agency, and falls within audit requirements.
Transportation Costs
Costs incurred for freight, express, cartage, postage, and other transportation services relating either to goods purchased, in process, or delivered, are allowable. When such costs can readily be identified with the items involved, they may be charged directly as transportation costs or added to the cost of such items.
Travel Costs
Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the institution. For UGA’s policy on domestic and foreign travel, consult: Travel Policy
Additional Criteria for Determining Direct Costs (for Non-Federal or Non-Federal Flow-Through Projects)
A cost must be included in the awarded budget. If a cost requires institutional and/or sponsor prior-approval after the award is made, the approval(s) must be secured before the cost is incurred.
Unallowable Costs:
The following list covers unallowable costs specified in Section J of OMB Circular A-21 and costs that are normally treated as Facilities and Administrative Costs. This is a quick reference. The specific wording in A-21 should be referenced when greater detail is needed. (http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html
Advertising and Public Relations - Expenditures to promote the University are not allowable.
Alcoholic Beverages
Alumni Activities
Bad Debts
Books –Books normally found in the University Library are treated as F&A costs.
Commencement or Convocation costs
Contingency Provisions
Charitable Contributions, Donations, Remembrances
Development/Fundraising Costs
Entertainment Costs - Costs of entertainment, including amusement diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sporting events, meals, lodging, rentals, transportation, and gratuities) are not allowable.
Fines and Penalties
Goods or Services for Personal Use of Employees (including gifts)
Housing and Personal Living Expenses
Investment Management Costs
Lobbying
Losses on Other Sponsored Agreements or Contracts - (cost overruns) - Any excess of costs over income under any other sponsored agreement or contract of any nature is unallowable. This includes, but is not limited to, the institution’s contributed portion of cost-sharing agreements or any under-recoveries through negotiation of flat amounts for indirect costs.
Memberships - Costs of membership in any country club or social or dining club or organization are unallowable. Institutional memberships in professional organizations and subscriptions to technical periodicals are normally treated as an F&A cost.
Office Supplies and General Purpose Equipment - Costs include those incurred in support of routine administrative activities associated with instruction, public service, research and other institutional activities. This category includes, for example, computers (under $5,000), printers, monitors, digital cameras, fax machines, printer paper, toner cartridges, pens, pencils, legal pads, clips, rubber bands, post-it notes, notebooks, binders, folders, diskettes, CDROMs, and departmental stationery. These items are considered readily expendable and are treated as F&A costs covered by the negotiated F&A cost rate. The only exceptions are those wherein the purchase of the supplies is extensive in nature, can be specifically identified to the project, and meets the definition of a direct charge adequately justified in the budget and approved in the terms and conditions of the award by the agency). The Office for Sponsored Programs will approve office supply costs when the need for the expenses meets the cost accounting standards exception guidelines.
Preagreement Costs - unless approved by the sponsoring agency or permitted under expanded authorities.
Recruiting Costs - Normally treated as F&A cost. This will include visa application fees/expenses.
Selling and Marketing Costs - of any products or services of the institution.
Student Activity Costs - incurred for intramural activities, student publications, student clubs, etc. are unallowable.
Telephone - Installation charges, monthly use charges, local access calls, pagers, etc. are considered F&A costs and should not be charged directly to sponsored accounts, except in the rarest circumstances. The basic telephone line charge and local calls may be charged directly to a sponsored project when a separate, dedicated telephone line is necessary solely for the performance of a sponsored project). The Office for Sponsored Programs will approve office supply costs when the need for the expenses meets the cost accounting standards exception guidelines.
Travel - Commercial air travel costs in excess of the lowest available commercial discount airfare, Federal government contract airfare (where authorized and available), or customary standard (coach or equivalent) airfare costs are unallowable.
