Search | Directories | Reference Tools
UW Home > Discover UW > Research > OSP > GIM Table of Contents 

GIM 23

Sponsored Program Costing Policy


Office of Research
Office of Sponsored Programs


Effective December 26, 2014

Supersedes: GIM 23 (January 28, 2003)

This GIM is updated to conform to the Federal "Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards" (Uniform Guidance) effective December 26, 2014. This GIM applies to new awards and new funding for existing awards received on or after Dec 26, 2014.

For awards in existence prior to December 26, 2014 that have not received supplemental funding or are not otherwise subject to the Federal Uniform Guidance per sponsoring agency award terms and conditions, please refer to the Archived GIM 23.


Sponsored programs incur costs in support of the sponsored research, instruction or other sponsored activity that is carried out under the program. The University maintains this policy in order to ensure those costs are necessary, reasonable, and allocable to a particular sponsored program and administered consistently across all sponsored programs. The University maintains this policy, systems, internal controls and procedures that ensure that direct costs and associated indirect costs, consisting of and referred to as Facilities & Administrative (F&A) costs, are presented appropriately in proposal budgets and charged consistently to sponsored program accounts (budget numbers).

This policy applies to all funding accepted by the Office of Sponsored Programs (OSP) on behalf of the University of Washington.


Per Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance), federal cost principles must be applied uniformly to all federal awards and must be consistent with policies and procedures that apply to both federal awards and other activities of the university, including non-federally supported programs. Along with the general provisions of Uniform Guidance, these cost principles are also subject to agency- and announcement-specific restrictions as well as the terms and conditions of the federal award.

Cost principles are those factors that are used to assess allowability of costs. These principles state that costs must be necessary, reasonable and allocable, and conform to limitations set out by regulation and the award itself. Additionally, a cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost (F&A).

As §200.412 of the Uniform Guidance states, "There is no universal rule for classifying certain costs as either direct or indirect (F&A) under every accounting system. A cost may be direct with respect to some specific service or function, but indirect with respect to the federal award or other final cost objective. Therefore, it is essential that each item of cost incurred for the same purpose be treated consistently in like circumstances as a direct or indirect (F&A) cost in order to avoid double-charging of federal awards."

Persons/Offices Affected

UW Principal Investigators and Departments, Divisions, Schools and Colleges, Grant & Contract Accounting (GCA), Management Accounting & Analysis (MAA), Office of Sponsored Programs (OSP).

University Policy

All direct costs charged to a sponsored program must be necessary, reasonable, and allocable to the particular program and be incurred within the limitations set out by the sponsored award document and sponsor specific requirements, which may include seeking approval prior to charging certain costs to the award.

Any cost that is considered an F&A cost, such as administrative or clerical services, cannot be directly charged to a federally funded sponsored program unless certain conditions are met to justify the direct charging of the cost and prior sponsor approval is sought and obtained, consistent with the sponsor's definition of prior approval.

Costs that are normally recovered under F&A may be directly charged to non-federally sponsored programs if permitted by the sponsor's policies, award terms and conditions, or are otherwise approved by the sponsor.

Any costs that are proposed or incurred as cost-share in support of the sponsored program must also follow these cost principles (see GIM 21).

The programmatic lead of the sponsored program (Principal Investigator) shall put into place adequate internal controls to reasonably ensure that all expenditures associated with the sponsored program are consistent with this policy (see GIM 2). Costs determined to be unallowable, through the audit process, by the sponsor, by the pass-through entity, by Grant and Contract Accounting (GCA) post-award compliance monitoring, or other body with oversight regarding sponsored program expenditures, become the responsibility of the PI for payment from alternative sources.

This policy and associated procedures are consistent with the Cost Accounting Standards (CAS) as disclosed on the University's Disclosure Statement (DS-2), which describes the University's cost accounting practices.

Procedures and Guidance

Costs considered direct costs

Costs considered facilities & administrative (F&A) costs (indirect costs)

Costs requiring prior sponsor approval

Distribution of costs across two or more sponsored programs


Administrator/Grant Manager/Fiscal Specialist
Provides administrative support by applying principles of financial management to perform such functions as record keeping, auditing, analysis, budgeting, payroll, travel, purchasing and other types of fiscal operations that support adherence to this costing policy.
Department Chair, Department Head
Ensures the PI has the necessary administrative support, staff, space, equipment and other resources to conduct the project as proposed and approved by the Department.
External Audit
Per §200.501 the UW is required to have an annual single audit. This requirement is currently handled by the Washington State Auditor's Office. Federal and other sponsors may also require program-specific audits.
Grant and Contract Accounting
GCA sets up budgets with appropriate F&A rates, invoices sponsors, provides fiscal reporting, and performs budget closeout. GCA is also responsible for consulting on the propriety of a given expenditure, budget monitoring techniques, and other post award financial matters.
Internal Audit
Internal Audit is responsible for monitoring fiscal compliance via audit, investigations, and liaising with external auditors.
Principal Investigator
The PI is ensures that the budget and expenditures are consistent with the Uniform Guidance throughout the life of the project – from the proposal stage to award closeout. This includes ensuring that all direct costs are reasonable and allocable and that any direct charging of costs generally supported as F&A or other costs requiring such, have prior sponsor approval. The PI is responsible for ensuring adequate internal controls are in place to reasonably ensure compliance with this policy. Further, the PI is responsible for covering the costs determined to be unallowable. See GIM 2.
Management Accounting and Analysis
MAA is responsible for calculating and negotiating the Federal reimbursement rate for F&A costs incurred in support of sponsored research and other sponsored projects.
Office of Sponsored Programs
OSP reviews budgets at the proposal stage for consistency with Uniform Guidance, program announcements, sponsor policies, UW policies, OSP internal review guidance and the information provided by the PI to OSP, as set out in GIM 1. OSP certifies to the sponsor that the UW will be accountable for the appropriate use of any funds awarded. OSP receives, reviews and submits request for prior approval to the sponsor, as the authorized official.


Administrative/Clerical Costs:
These costs include salaries and fringe benefits attributable to the administrative and clerical work of personnel that support faculty and other University employees in the conduct research, instruction or other activity.
Consistent Treatment:
Per Uniform Guidance the practice "that each item of cost incurred for the same purpose be treated consistently in like circumstances as a direct or indirect (F&A) cost in order to avoid double-charging of federal awards."
Cost Accounting Standards (CAS):
Cost Accounting Standards are mandatory standards applied to federal awards intended to achieve uniform and consistent cost accounting practices.
Direct Costs:
By definition in Uniform Guidance, "Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy."
Facilities & Administrative (Indirect) Costs:
By definition in Uniform Guidance, "Indirect (F&A) costs means those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved." At educational institutions such costs normally are classified under the following F&A categories: Depreciation and use allowances, general administration and general expenses, sponsored projects administration expenses, operation and maintenance expenses, library expenses, departmental administration expenses, and student administration and services.
Uniform Guidance:
Uniform Guidance is 2 CFR Chapter I, Chapter II, Part 200, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

Related Resources

Federal Cost Principles Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Chapter I, Chapter II, Part 200, Uniform Guidance
OSP Concurrence Letter (Prior Approval) information OSP Manage Award webpage
Prior Approval Matrix for Certain Federal Agencies Federal-Wide Research Terms and Conditions webpage (hosted by NSF)
F&A rate proposal information (direct versus indirect) UW Management Accounting and Analysis F&A Rate and Proposal information


Costing Policy, Proposal Budgets and Prior Approval Requirements: Office of Sponsored Programs, OSP website,, (206) 543-4043

Costing Policy and Expenditures on Sponsored Program Budget Numbers, F&A Charges: Grant and Contract Accounting,, (206) 616-9995

F&A Cost Calculation, Cost Accounting Standards: Management Accounting & Analysis, MAA

Content Creator

Office of Sponsored Programs

Grant and Contract Accounting

Review Schedule

This policy is reviewed by the Office of Sponsored Programs as necessary to reflect changes in Federal regulation or University policies.