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Sponsored Projects Administration

This section refers to preparing a budget for the National Institutes of Health (NIH). Additional budget development resources are located on the NIH website.



Personnel costs often comprise 65-80% of total funds requested. All personnel with effort on project must be listed by name, and all personnel paid on a project must be employees of the University.


Materials & Supplies

Travel (Domestic & Foreign)

Patient Care Costs (Inpatient & Outpatient)

Alternations and Renovations

Other Direct Costs Examples include:

Subcontracts (Consortium/Contractual Costs)


 Refer to the Funding Opportunity Announcement (FOA) to determine whether indirect costs (IDC) are allowable. The FOA will also delineate whether there is a cap on the indirect cost rate.  If there are no mandatory restrictions to IDC, use the applicable F&A rate per the University’s F&A Rate Agreement for federally-sponsored projects. If you feel UT Health’s off campus rate applies to a project, please refer to On/Off campus Indirect Cost Rates to determine if appropriate before moving forward. 

 Any voluntary exceptions to the IDC rate will require an approved IDC wavier, which should detail the amount of F&A to be waiver, and should be approved by the department chair and dean.

Unallowable Costs

Certain cost items are not allowed to be charged to federally sponsored projects. Also, items factored into the indirect costs that may not be included in the direct costs of a project. To determine whether a cost item is allowable, refer to OMB Circular A-21, as well as the agency’s polices and guidelines, program announcement, and university policy. The following cost items are typically considered unallowable:

Food: In accordance with OMB A-21 section J.32, Meetings and Conferences, the costs of meals are allowable when the primary purpose of the meal is the dissemination of technical information. The NIH Grants Policy Statement Section 7.9.1 further expands that grants funds may be used when certain meals meet the following guidelines:

In all cases the cost of any meal must meet a test of reasonableness.Additional requirements to consider for the allowability of meals for federally-sponsored projects are as follows:  

Office Supplies: The inclusion of general office supplies on a budget or budget justification is generally not an allowable cost as direct costs, per OMB Circular A-21 F.6.b(3), which states, "Items such as office supplies, postage, local telephone costs, and memberships shall normally be treated as F&A costs."

However, there may be some circumstances where charging office supplies to a grant may be permissible. The best way to make this determination is to look closely at the type of research being conducted.

Administrative Expenses: In accordance with OMB Circular A-21, 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.

A "major project" is defined as a project that requires an extensive amount of administrative or clerical support, which is significantly greater than the routine level of such services provided by academic departments. Examples of major projects are:


The modular grant application format is an extension of NIH's streamlining and reinvention initiatives, designed to focus the attention of investigators, their institutions, peer re-viewers, and NIH staff on science rather than budget details. It applies to research grant applications requesting up to and including $250,000 direct costs per year.