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Costing

Background

The purpose of this policy is to provide guidance to PIs, schools, departments, units and personnel of the University for proposing and administering direct and indirect costs on sponsored projects, in accordance with Federal or other sponsor requirements.

NYU Approach

It is the policy of New York University that all costs proposed or incurred on a sponsored project comply with sponsor terms and conditions, NYU policies and procedures and applicable Federal, state and local regulations. NYU administers direct and indirect costs, on sponsored projects, in accordance with Federal and other sponsor requirements.

The Principal Investigator (PI) is ultimately responsible for ensuring appropriate financial management, compliance with sponsor terms and conditions, as well as determining actual effort expended on a sponsored project.

General Guidelines

Charges to federal awards must comply with the following criteria:

  • Allowable: The charge is allowed in accordance with federal regulations or the terms of the sponsored agreement.
  • Allocable: The goods or services proposed are directly attributable to the award.
  • Reasonable: The type and amount of the charge is appropriate under the circumstances. (e.g., cost is not excessive).
  • Consistently treated: An expense must be treated consistently in similar circumstances, i.e., direct costs or indirect costs.

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Direct Costs

As defined in Federal cost principles, the primary activities of NYU are Instruction, Research, Other Sponsored Activities, Patient Care and Other Institutional Activities. Costs incurred to support these activities – such as salaries and wages, fringe benefits, materials and supplies, travel, subcontracts, equipment, specialized service center charges and other operating expenses – are treated as direct costs and should be identified specifically with the benefiting projects and activities. Direct charges to a sponsored agreement should support the sponsored agreement's purpose and activity and be necessary to meet the project's scientific and technical requirements.

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Indirect Costs [Facilities and Administrative (F&A) Costs]

Indirect costs are those that are incurred for common or joint activities of the University and therefore cannot be identified readily and specifically with a particular sponsored project, instructional activity or any other University activity.

Expenses incurred for general departmental and institutional business are recognized as indirect costs. On Federal awards such costs include, but are not limited to: charges for administrative and clerical salaries, related fringe benefits, office supplies, postage, local telephone charges, cell phones (except when needed to meet programmatic objectives), office equipment, internet and other general costs.

Special Purposes or Circumstances Where Direct Charging of Costs Normally Treated as Indirect Costs May be Appropriate

  • In instances where Federally-sponsored projects require administrative and clerical supplies, postage and telecommunications (expenses similar to the charges identified normally as administrative costs), such costs may be charged to sponsored projects as direct costs if they meet the criteria explained in the Charging Administrative Expenses to Federal Awards Policy.

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Allocation of a Direct Cost across Two or More Sponsored Agreements

  • If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit.
  • "If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefited projects on any reasonable documented basis." [OMB Uniform Guidance, Section 200.405].

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