GIM 23
Attachment 1
Costing Policy for Sponsored Agreements

II. Definitions

Direct Costs

OMB Circular A-21, Section D.1, states:

Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or F&A costs. Where an institution treats a particular type of cost as a direct cost of sponsored agreements, all costs incurred for the same purpose in like circumstances shall be treated as direct costs of all activities of the institution.

A cost is considered direct when a specific grant or contract gains explicit benefit from the cost for a specific programmatic purpose. For example, a PIs salary, when represented by scientific effort on a particular grant or contract, is an example of an allowable direct cost to that grant or contract.

Indirect Costs

OMB Circular A-21, Section E.1, states:

F&A costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.

At educational institutions such costs normally are classified under the following indirect 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.

Indirect costs are infrastructure costs of the University that support the programs of the institution, including research and other sponsored programs. Examples of indirect costs are building depreciation, maintenance costs, the cost of electricity and heat, accounting services, personnel services, departmental administration, purchasing and human subjects administration.

Refer to GIM 22, Indirect Costs: An Explanation, for additional information regarding indirect costs.

1. A-21 refers to indirect costs as Facilities and Administrative (F&A) Costs. This policy will use the term Indirect Costs.

Office of Sponsored Programs
4333 Brooklyn Ave NE | Box 359472
Seattle, WA 98195-9472 | (206) 543-4043 | Fax 685-1732 | Contact Us
Modified: August 12, 2005