Direct Costing to Sponsored Projects

1. Direct Costing to Sponsored Projects

2. Direct Costs Those costs that can be identified specifically with a particular sponsored project

3. Indirect Costs (also called F&A costs) Those costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project

4. Office of Mgmt & Budget (OMB) Guidelines The main factors affecting allowability of costs are: • They must be reasonable • They must be allocable • They must be given consistent treatment in like circumstances • They must conform to any limitations or exclusions set forth in the OMB circulars and in the sponsored agreement

5. Reasonable Costs A cost may be reasonable if the nature of the good or service and the amount of it reflect the action that a prudent person would have taken under similar circumstances.

6. Allocable Costs A cost is allocable to a specific sponsored agreement if the good or service is incurred soley to advance the objectives of the project, it benefits the project, and it is necessary for the overall operation of the project.

7. Direct Costing: The PI’s Role All Principal Investigators (PIs) in receipt of external funding have an overall responsibility for the fiscal management of those funds. • Accountability for direct costing compliance with legal regulations, CNU policy, and sponsor requirements ultimately rests with the Principal Investigator (PI). • The primary goal for the PI is to work with the Office of Sponsored Programs (OSP) to ensure all costs are allowable, allocable, and reasonable.

8. Direct Costing:OSP’s Role The Office of Sponsored Programs (OSP) provides support to the PI in maintaining compliance with the Direct Costing Policy. • As a knowledgeable authority in the OMB Circulars, OSP is happy to assist the PI in determining whether a contemplated expense is allowable and therefore chargeable as a direct or indirect cost to the project. • In further support of the PI and their compliance role, OSP will periodically review account expenses to determine if these charges are in compliance. • If a potentially unallowable expense is found, OSP will contact the PI for justification of the expense and/or have the expense correctly re-assigned. Any adjustments of this nature should occur within 90 days.

9. Generally Allowable Expenses • Consultant costs • Conference charges • Honoraria • Lab (servicing) fees • Participant Support costs • Publication costs • Research-related materials and supplies • Salaries & Fringe benefits (PI & direct staff) • Stipends • Student wages • Travel costs (outside 26 mile radius of CNU) • Vendor payments

10. Generally Unallowable Expenses • Advertising • Alcohol • Audiovisual equipment & supplies • Bad debt • Books • Clerical & office supplies (to include printers and supplies) • Communications (local, cellular, & internet) • Computers, tablets, and supplies (including software) • Copiers, copies, service, & supplies • Donations & contributions • Depreciation and & usage costs • Entertainment • Equipment ($>5K, >1year of life) • Fines & penalties • Furniture • Gifts of any kind • Lobbying • Maintenance & Repair • Professional memberships/subscriptions • Shipping & postage • Food (inside a 26 mile radius of CNU)

11. Questions? If you are considering an expense that did not appear on our list or if you have any questions… Please contact the Office of Sponsored Programs (OSP) prior to making your purchase. Anne 4-7266 or Michelle 4-7392 Thank You