Funding from awards must be expended in accordance with governing regulations and agency policy. Pre-award reviews budgets to determine costs are allowable, allocable, and appropriate to grants in accordance with the Office of Management and Budget (OMB) Circular A-21, the agency’s policies and guidelines, and institutional policy.
A cost is allowable when:
Costs must be allocable to the sponsored agreements. A cost is allocable when:
Costs must be given consistent treatment through application of those generally accepted accounting principles (GAAP) appropriate to the circumstances.
All costs incurred on a grant must conform to any limitations or exclusions in OMB Circular A-21 or the sponsored agreement.
PIs should work with their departmental administrative officials to develop a budget which ensures all costs in the budget are fair and reasonable for a research project in accordance with A-21, agency policies and guidelines, and institutional policy.
Below is a list of resources for determining allowable costs:
When preparing a budget for a grant applications, consider the following:
The University seeks to support its faculty in the pursuit of their research interests while, at the same time, allocating all available resources to comprehensive support of the whole university enterprise. Cost sharing, as defined below, may be requested by the grantor in the form of funds or other university resources that would be contributed or allocated to a sponsored project over and above the support provided by the grantor. This commitment made by the University creates the requirement to track cost sharing in accordance with HOOP 75.
The university actively discourages voluntary cost sharing on the part of principal investigators; exceptions may occasionally be made if the project in question is deemed by the Executive Vice President for Academic and Research Affairs to warrant a voluntary commitment. All exceptions must be approved prior to submission of the grant proposal by the Executive Vice President for Academic and Research Affairs. Refer to the Cost Sharing Template on the Forms page.
This section refers to preparing a budget for the National Institutes of Health (NIH). Additional resources are located on the NIH website.
Direct Cost Categories
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
Examples of other expense items are:
Subcontracts (Consortium/Contractual Costs)
The F&A costs for the first $25,000 of each consortium may be included in the modified total direct cost base.
Indirect Cost Category
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. 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.
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:
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:
Recurring business meetings, such as staff meetings, should not be broadly considered as meetings for the primary purpose of disseminating technical information in order to justify charging meals or refreshment costs to grants. The few cases where meals may be allowed are typically for major projects and conference grants, not standard R01 grants.
PI and departments must include a detailed description in the budget justification indicating the reason for the meal, planned agenda for the meeting/conference, documentation justifying the need for the meeting to occur during a meal, and the amount of time that will be spent discussing technical matters. Regardless of the request type (meals for meetings, patients, etc.), the budget justification must be very detailed and the justification tied specifically to the scope or aim of a project.
In all circumstances, serving alcoholic beverages at such meetings is not an allowable cost. Additionally entertainment costs, such as food, are unallowable.
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.
If the project is mainly laboratory research, then general office supplies should be removed because they will be covered under F&A costs.
If the research consists primarily of surveys, questionnaires, and data collection, then it may be justifiable to include general office supplies in the budget and include an expanded justification that notes the "increased use of general office supplies outside of normal use."
If the supplies are not specifically allocable to the grant, they are considered general office supplies and should not be charged as a direct cost to the grant account.
At the minimum, PIs and departments must include a detailed description in the budget justification indicating the use of the office supplies, the reason they are required for the project and not included in normal F&A costs, the way they will be fully allocable to the project. The justification should be very detailed and tied specifically to the scope or aim of a project.
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:
NIH Modular Applications
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.
An additional requirement for the internal review process for DOD projects is verification of actual base salary. For DOD projects, all salaries listed for all personnel should be at their current pay. Departments will be requested to provide a salary verification sheet (HRMS Employee Funding History).