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POLICY

Charging Administrative Expenses to Federal Awards Policy

Click here to download the Policy PDF

It is the policy of New York University (NYU, “the University”) to comply with all regulations concerning awards for research, training and related activities from the Federal Government.  The Federal Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions (http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html) prohibits direct charging of administrative and clerical salaries and certain other costs to federal grants and contracts, except in special circumstances.

Purpose of this Policy

The purpose of this policy is to provide guidance on special purposes or circumstances for charging administrative and clerical salaries, as well as certain other non-salary administrative costs to federal grants and contracts.

Scope of this Policy

This policy is applicable to all schools, departments, units and personnel of the University involved in administering federally-sponsored awards.

Procedures for Implementation

OMB Circular A-21 states that the salaries of administrative and clerical staff should normally be treated as Facilities and Administration (F&A or indirect) costs. Salaries associated with routine services such as preparing proposals, making routine travel arrangements and typing reports should not be budgeted or charged as direct costs, even when there is a direct benefit to the project. Similarly, A-21 states that items such as office supplies, postage, local telephone costs and memberships shall normally be treated as F&A costs.

However, direct charging of administrative and clerical salaries and supplies and other costs may be appropriate where the nature of the work performed under a particular project requires an extensive amount of administrative or clerical support or where the project requires more than routine use of administrative expenses, e.g., supplies, postage. Examples of such projects that meet the special circumstances rule include:

  • Large, complex programs that entail assembling and managing teams of investigators;
    Projects that involve extensive data accumulation, analyses and entry;
  • Projects that require making travel and meeting arrangements for a large number of participants;
  • Projects whose principal focus is the preparation and production of manuals and large reports;
  • Projects that are geographically inaccessible to normal departmental administrative services, such as research vessels and other research sites that are remote from campus;
  • Individual Projects requiring project-specific database management, human or animal protocols and multiple project-related investigator coordination and communication;
  • Training grants which identify a line item budget for "institutional allowance" authorizing direct charging of normally treated indirect costs as appropriate if they are reasonable, specifically identified with the project, and budgeted in the award;
  • Planning grants, which may be used for preliminary work to determine the feasibility of a proposed line of inquiry and/or for other activities that will facilitate proposal development.

For these types of projects, the Federal agency will fund indirect costs at a specified percentage.

Whenever such costs are identified by the Principal Investigator (PI), these costs must be explicitly justified and documented:

  • The budget page should include a clear justification of the "special purpose or circumstance" that applies to the sponsored project. When the agency does not require a categorical budget, the internal budget developed at the pre-award stage should include corresponding justification. Post-award requests to re-budget into these codes should be addressed to Sponsored Programs Administration (SPA) where they will be reviewed for allowability.
  • The Government has not established a minimum (or maximum) level of project effort for an administrative or clerical employee whose salary may be direct charged. Given the concern in this area, however, the smaller the percent of effort requested, the greater the difficulty in justifying the charge. Budget line items of 5-10% effort or less will probably not be considered reasonable by the sponsor, particularly if the justification is based on the recurring performance of routine clerical duties.

For administrative charges, the costs must be attributable to a particular project which meets one of the examples cited above and the project must create a special or unique need for the item, which is clearly different from normal circumstances. Examples of specific allowances are listed below.

Administrative and Clerical Effort

  • To charge administrative and clerical effort directly to the project, the effort must be:
    Required to complete the specific and distinctive requirements of a particular sponsored project; and
  • Not routine administrative work that benefits multiple activities of the unit.

Cell Phones

Cell phone expenses are usually considered “local telephone costs” and generally not included in the budget. If, however, a cell phone is necessary to maintain contact at remote sites for logistical or safety reasons it may be directly charged.

Computers and Laptops

General-purpose computers, especially laptops, can be used to support a variety of activities and are rarely dedicated to one specific purpose. As a result, general-purpose computers and laptops are typically F&A costs and are seldom proposed in budgets or directly charged to awards. In order to be considered as direct costs, a computer must be:

  • Necessary to fulfill the project’s scope of work;
  • Fully described and justified in the budget and budget narrative;
  • Specifically identified with and used exclusively on the project.

Individual Memberships

Memberships in professional and scientific organizations may not be included in the budget unless:

  • The membership is the only means of obtaining a specific journal or periodical directly related to the project;
  • The membership is required to attend a conference which is part of the sponsored project;
  • The membership results in reduced conference registration fees or other associated costs and is charged to the same sponsored project (savings must be greater than or equal to the membership cost).

Office Supplies

Office supplies that are normally used in the general administrative support of a project may not be included in the budget or charged to the award. Office supplies that are used for project-specific activities outlined in the proposal may be included in the budget and charged to the project. Because many items of office supplies are used for both general administrative support and project-specific activities, it is important that these items, when included in the budget, be justified in terms of their relevance to the methods used in conducting the project. Examples of when supplies may be charged directly are:

  • Envelopes used to mail an unusually large number of research questionnaires;
  • Folders for filing survey responses and/or lab results;
  • Data storage media if the project involves extensive data accumulation and analysis.

Postage Costs

Postage costs may be included in the budget and charged directly when they are necessary for the conduct of the study. A postage meter or log should be used to document such support. Shipping costs not classified as ordinary postage are acceptable direct costs. Examples include:

  • Shipment of research materials and deliverables to perform the project’s scope of work;
  • Correspondence with the sponsor and/or project participants;
  • Dissemination of surveys and/or materials produced as a result of the project activities.

Printing, Binding and Copying Costs

These costs used in routine general administrative support of a project may not be included in the budget or charged to the award unless the project scope clearly indicates a need for a volume of activity beyond routine and their usage can be tracked.

Telephone Costs

Local telephone costs used to conduct routine business of the project may not be included in the budget. Telephone lines including handsets and data lines may be charged directly if required to:

  • Conduct surveys.
  • Maintain contact with project activities conducted at remote locations.

Click here to download the Policy PDF

Notes
  1. Dates of official enactment and amendments: 09/01/13
  2. History: blank
  3. Cross References: blank

About This Policy

Effective Date: September 01, 2013
Supersedes: Guidelines for Including Administrative and Clerical Salaries in Federal Grant and Contract Proposals, 4/94
Issuing Authority: Sponsored Programs Administration
Responsible Officer: Assistant Vice President for Post-Award Administration; Associate Vice Provost for Research Compliance and Administration

Direct Costs

Expenses that directly further the programmatic objectives of a sponsored project with a high degree of accuracy.

Indirect Costs

General business expenses that are not specifically identifiable to a sponsored project but rather support the project indirectly. This term is also referred to as Facilities and Administrative Costs (F&A) or Overhead. Examples of F&A/Overhead expenses include space costs, utilities, and general, sponsored projects and departmental administration costs.

OMB Circular A-21, Cost Principles for Educational Institutions

The set of Federal regulations which establishes the principles for determining costs applicable to Federal grants, contracts and other agreements with educational institutions.

 

Federal Guidelines


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Sponsored Programs Administration Post-Award Handbook

NYU Approach and application of this policy, related resources and more available in the Handbook.
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