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Office of Sponsored Programs (OSP)


Guidance on charging administrative and clerical salaries

Posted on June 7, 2011 at 8:23am

Allowability of Administrative/Clerical Salaries on Federally Sponsored Projects

Guidance for the University of Washington research community in preparation of grant and contract applications and post-award administration

  1. Background

    At educational institutions, administrative and clerical costs are considered indirect costs incurred for common or joint objectives and not readily or specifically identifiable to a particular sponsored project.

    The federal government allows for the recovery of administrative costs on sponsored projects, both on and off campus.  The U.S. Congress limits this reimbursement to 26% of the modified total direct costs of a project.

    In order to track consistent treatment of administrative and clerical charges across all sponsored projects, the University of Washington, Office of Management Accounting and Analysis (MAA) periodically evaluates job codes that are considered administrative and clerical.  This analysis is done on a University-wide basis.  For a complete list of the University of Washington payroll titles that are considered administrative or clerical in nature, please see Grants Information Memorandum 23.

  2. Federal Policy

    Administrative/Clerical salaries cannot be directly charged to a sponsored project unless the nature of the work under the sponsored project requires: 1) an extensive amount of administrative or clerical support that is significantly greater than the routine level of support provided to a project within an academic department/unit AND 2) the increased level of support is allocable to a specific sponsored project.  These circumstances must be identified explicitly in the grant application or contract proposal.

    GIM 23 includes specific examples provided by the Federal Office of Management and Budget (OMB) that illustrate circumstances where direct charging of administrative and clerical salaries may be appropriate.

  3. Proposal Review by the Office of Sponsored Programs

    All sponsored project applications are reviewed by the Office of Sponsored Programs (OSP).  OSP will review the circumstances that are being presented to the sponsor in support of the direct charging of administrative/clerical salaries in light of the federal cost principles and GIM 23.

    Administrative/clerical salaries proposed in a grant or contract budget as a direct cost or as cost-share must meet each of the following criteria:

    • The salary falls within the special circumstances specified by OMB,  Circular A-21 Section.F.6.b Interpretation (see GIM 23 for text);
    • The title, effort level and salary of the position are stated in the proposal; and
    • The special circumstances warranting direct charging of the services are justified in the proposal budget justification
    • The Sponsor specifically allows the direct charging of administrative/clerical costs due to the type of grant or contract and this is documented in the funding opportunity announcement (FOA).

    If the above criteria are not met at time of proposal, OSP reserves the right to return the proposal to the Principal Investigator, unapproved.

  4. Post – Award Administration:  Administrative/Clerical Salary Expenditures

    It is the Principal Investigator’s responsibility to document the roles, duties, and effort devoted to a sponsored project for all personnel.  Therefore, the duties of any administrative or clerical position described in the justification to OSP should be reflected in the departmental record as the project is carried out.

    Grant and Contract Accounting (GCA) reviews administrative/clerical job code expenditures charged to federal budgets.  At the time of budget set-up, OSP notifies GCA when administrative and clerical salaries have been appropriately justified and funded.  GCA denotes this in the accounting system and then performs subsequent compliance checks to ensure that administrative and clerical salaries are appropriate when charged to a federal award.  If the appropriate flags are not noted in the accounting system and administrative and clerical charges are found by GCA on a federal project, GCA will ask the PI to move any unjustified expenditures from the federal budget to an appropriate alternative non-federal budget.

    If charging an administrative/clerical salary was unforeseen at the time of proposal but the need to do so arises after time of award, the same criteria in Section 3 apply.  The PI/dept must send an appropriate justification to OSP for OSP review and notification to GCA.

    It is important to recognize that there are instances where project personnel are employed under an administrative/clerical payroll title but the duties of those personnel on the project are research or technically based technical (e.g. not administrative or clerical in nature).  It is advisable to select the most appropriate payroll title for the individual carrying out work on the project.

    If an administrative/clerical payroll title is necessary for an individual with research-based effort on the project, notification to OSP is required.  OSP will request documentation for any individual with the admin/clerical payroll title and will notify GCA, either through the funding action (FA) or a post-award change (PAC), in order to prevent later notification from GCA to the PI.

    In addition to increased audit risk and risk the cost will ultimately be deemed unallowable, continued charging of administrative/clerical job code expenditures on a federal budget without required documentation as set out above may lead to escalation of the matter initially to the Departmental/Division Chair and subsequently to the Dean.

Frequently Asked Questions:

Is being off-campus sufficient justification for direct charging administrative salaries?
No.  Conducting a project off-campus is not an adequate explanation to justify the direct charging of administrative/clerical salaries.  An exceptional and unlike circumstance must exist to justify charging administrative and clerical salaries directly to the project, regardless of the location of the project.
Is direct charging small percentages of administrative/clerical effort (salaries) among several off-campus sponsored agreements allowable per OMB Circular A-21 guidelines?
Generally, no.  If the effort applied toward those activities is performed for common or joint objectives shared across several projects, then these costs are unallowable as direct charges.   If there are exceptional and unlike circumstances that require administrative/clerical support above and beyond the norm, and this effort can be specifically attributed to a particular project, then these charges will be allowable.
If administrative/clerical salaries were proposed in the application and the sponsor did not specifically disallow them in the award, are they allowable?
Sponsors expect the University to apply consistent cost accounting standards which includes consistent treatment of expenditures across all projects and activities.  If expenditures for administrative and clerical support were justified to the sponsor at the time of proposal using the OMB Circular A-21 guidelines, then those costs are more likely to be allowed when incurred.  If, however, the exceptional and unlike circumstance warranting the direct charging of administrative/clerical salaries was not documented at the time of the proposal, these expenditures may be considered unallowable as direct charges by the sponsor.
What about the treatment of administrative and clerical costs on non-federal awards?
In limited situations, the clerical and administrative costs can be charged to non-federal sponsored projects if the sponsors of those projects do not specifically disapprove the cost in the award or in other notices it gives to the University.

For questions on the job code list, please see the Management, Accounting and Analysis (MAA) website for information and contacts.

For questions on the allowability of administrative or clerical salaries charged on sponsored projects, please visit the Office of Sponsored Programs (OSP) website and locate your OSP point of contact or call (206) 543-4043.

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