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GIM 23
Attachment 1
Costing Policy for Sponsored Agreements

VI. Indirect Costs

As noted in II.B., indirect costs include institutional infrastructure costs for research and other sponsored programs. The focus of this section of the policy will be on those indirect costs generally incurred by academic departments. Costs incurred for program support and administration which occur at the college, school and department levels which should normally be treated as indirect are identified in section A (Administrative and Clerical Salaries) and section B (Other Indirect Costs).

Administrative and Clerical Salaries

The salaries of administrative and clerical staff should normally be treated as F&A costs. Direct charging of these costs may be appropriate where a major project or activity explicitly budgets for administrative or clerical services and individuals involved can be specifically identified with the project or activity.

Administrative and clerical salaries may be treated as direct costs under certain exceptional and unlike circumstances as described below.

1. Exceptional and Unlike Circumstances

   On July 13, 1994, OMB issued an interpretation of Circular A-21, Section F.6.b, that states:

   ...direct charging of these costs may be appropriate where the nature of the work performed under a particular project requires an extensive amount of administrative or clerical support which is significantly greater than the routine level of such services provided by academic departments. The costs would need to meet the general criteria for direct charging in section D.1. -- i.e., be identified specifically with a particular sponsored project relatively easily with a high degree of accuracy, and the special circumstances requiring direct charging of the services would need to be justified to the satisfaction of the awarding agency in the grant application or contract proposal.

   The following are examples provided by OMB to illustrate circumstances where direct charging of administrative and clerical salaries may be appropriate.

   • Large, complex programs, such as General Clinical Research Centers, Primate Centers, Program Projects, environmental research centers, engineering research centers, and other grants and contracts that entail assembling and managing teams of investigators from a number of institutions.

   • Projects which involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, searching literature, and reporting, such as epidemiological studies, clinical trials, and retrospective clinical records studies.

   • Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.

   • Projects whose principal focus is the preparation and production of manuals and large reports, books and monographs (excluding routine progress and technical reports).

   • Projects that are geographically inaccessible to normal departmental administrative services, such as seagoing research vessels, radio astronomy projects, and other research field sites that are remote from the campus.

   • Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human or animal protocols, IRB preparations and/or other project-specific regulatory protocols; and multiple project-related investigator coordination and communications.

   OMB also states as part of this interpretation:

   These examples are not exhaustive nor are they intended to imply that direct charging of administrative or clerical salaries would always be appropriate for the situations illustrated in the examples.

   Where direct charges for administrative and clerical salaries are made, care must be exercised to assure that costs incurred for the same purpose in like circumstances are consistently treated as direct costs for all activities.

2. Implementation Procedures

   Responsibilities that fall within normal departmental administrative functions cannot be charged directly to sponsored projects. The costs of administrative work such as routine budget monitoring, filing and other general office tasks are not usually considered allowable direct costs because such work is common across many sponsored projects. Such costs may support grant or contract activities, but they are classified as indirect costs because they do not meet the major activity and specific identification standards of OMB Circular A-21, section F.6.b.

   Administrative or clerical salaries may be directly charged only if they meet the following requirements:

   1. They fall within the special circumstances described in the OMB interpretation quoted in section VI.A.1 of this policy.

   2. The individual has responsibilities specifically identifiable to the work of the project and the effort devoted to the project is documented.

   3. The title, percent of effort and salary of the administrative or clerical position is included in the proposed budget of the sponsored agreement, and the special circumstances requiring direct charging of the services are justified in the proposal.

   4. The sponsoring agency accepts the cost as part of the projects direct cost budget. That is, the sponsor does not specifically disapprove the cost in the award or in other notice it gives to the University.

B. Other Indirect Costs

The following additional costs are usually treated as indirect costs for on-campus projects. They may be treated as direct costs only under special or unique circumstances.

• Office Supplies (see Appendix B)*

• Toner Cartridges and Diskettes*

• Basic Local Telephone Services On Campus - Basic services include phone installation, monthly line charges, basic instruments*

• Cellular Phones, pagers and Related Service Charges*

• Routine Copying Charges*

• Memberships

• Journals and Subscriptions

* Under this policy, these costs will be allowable as direct costs for off-campus, APL and Regional Primate Center awards. These costs will not require prior approval from the funding agency or other internal written documentation to incur as direct costs.

1. Justifying the Treatment of Normal Indirect Costs as Direct Costs

   These types of costs may be directly charged only if they meet the following requirements:

   1. The project has a special need for the item or service involved that is beyond the level of services normally provided.

   2. The costs can be specifically identified to the work conducted under the project.

   3. The costs are specified in the proposed budget of the sponsored agreement, and the special circumstances requiring direct charging are justified in the proposal.

   4. The sponsoring agency accepts the cost as part of the projects direct cost budget. That is, the sponsor does not specifically disapprove the cost in the award or in other notice it gives to the University.

2. Examples of Unique Circumstances Justifying Direct Charges
   • Office Supplies - Envelopes used to mail an unusually large number of research questionnaires.

   • Toner Cartridges, Diskettes, Tapes for Tape Drive Backup - The grant or contract research involves extensive data accumulation and analysis.

   • Basic Local Telephone Service On Campus - A hotline or crisis line that is specifically required by a grant or contract.

   • Memberships - A membership in a professional or scientific organization if joining is the only means of obtaining a specific journal or periodical directly related to a grant or contract.

   • Journals and Subscriptions - The cost of a journal or subscription may be directly charged if the content is specifically and solely related to the grant or contract.

C. Rebudgeting of Usual Indirect Costs

It is expected that direct charging of normal indirect costs would be anticipated and justified in the sponsored agreement proposal submitted to the sponsoring agency.

When a need arises and where sponsoring agencies permit rebudgeting after a project has started, to incur costs that are normally indirect, the need and the exceptional circumstances must be justified and documented in writing by the PI and maintained in the departmental grant file.

Office of Sponsored Programs osp@u.washington.edu Revised January 2003