Federal and UW Policies
The Federal Government sets forth principles in which a cost is defined as either direct (2 CFR 200.413) or indirect (2 CFR 200.56). Indirect (F&A) costs are those “…incurred for a common or joint purpose benefitting more than one activity, and not readily assignable to a single activity specifically benefitted, without effort disproportionate to the results achieved.”
For more information on indirect (F&A) costs click here.
A cost that is typically considered to be an indirect (F&A) cost cannot be directly billed to a federal award.
See GIM 23 for:
- a listing of all non-labor costs that are included in UW’s F&A rate.
- a listing of all job codes (labor) used in UW’s F&A rate.
UW’s GIM 23 states that:
- Any cost that is considered an F&A cost cannot be directly charged to a federally funded sponsored program unless certain conditions are met; and
- Costs that are normally recovered under F&A may be directly charged if permitted by the non-federal sponsor's policies.
Federal Regulations on Direct Billing of F&A Costs
Federal Regulations (2 CFR 200.413 (c)) do allow for the direct billing of F&A costs on a federal award.
Direct charging may be allowable when ALL the following conditions are met:
1. Individual costs can be specifically identified with the project or activity;
The cost must be able to be easily identified and recorded. An example would be a large mailing where the cost of mailing supplies and postage for the effort can be identified and recorded as being in support of a single award. A bad example would be the tracking of the use of staples (very time consuming and low value).
2. Such costs are explicitly included in the budget or have the prior written approval of the federal awarding agency;
Costs should be clearly identified and noted as an F&A cost being direct billed in the proposal budget and budget notes or proposal. Such identification serves as sponsor approval.
In the event that during the implementation of the award it is determined that an F&A cost needs to be direct billed, written sponsor approval should be obtained prior to the cost being incurred. Such written approval should include identification of the cost and rationale for its direct billing to the award.
For programs that do not require submission of a budget and when the requirement for prior approval of the Federal awarding agency does not apply as the agency has waived the prior approval requirement, these costs are supported by department documentation that demonstrates that these costs are integral to the Award.
The department is responsible for maintaining this required documentation.
3. The costs are not also recovered as indirect costs; AND
UW’s calculation of its F&A rate takes into account that there will be direct billing of some F&A costs. Thus, departments do not need to be concerned with this requirement as long as the other three requirements listed here have been met.
4. Administrative or clerical services are integral to a project or activity.
A cost is integral to an Award if it meets any of the following criteria:
- The objectives of the Award cannot be achieved without the specific cost.
- The Award requires a disproportionate amount of the F&A type cost than other department activities or Awards.
The following are some examples of tasks/activities that may be performed by an individual in an administrative/clerical position and could be considered integral to the award:
- Research data gathering
- Research data cleaning
- Laboratory technician activities
- Conducting computer research work specifically related to the award
- Conducting telephone surveys
- Research training
- Programmatic project effort
- Tabulating research results
- Database maintenance for award-specific data
- Preparing IRB or IACCU protocols
- Preparing progress reports
- Computer programming for the award
- Clinical and patient activities such as scheduling patient visits, processing payments for patients, and interviewing patients
- Writing project manuscripts for publication
- Library searches
- Organizing a conference as a component of a larger project
- Making travel arrangements for a large number of participants
- Organizing large datasets
- Managing complex projects with multiple sites, especially is there are multiple subcontracts
The following are examples of departmental activities that are normally considered routine administrative and clerical activities. As such, these costs should not be charged directly to a federal award:
- General departmental administration
- Award proposal development and submission
- Personnel, Payroll, and Human Resource activities
- Accounting and budgeting activities
- Financial monitoring
- Processing vouchers and payments
- Administrative data entry
- Newsletter/brochure preparation
- Processing and tracking routine purchase orders
- Maintaining departmental databases
- Departmental Reception Activities
The following are examples of non-salary expenses that are normally F&A costs and should not be budgeted or charged to federal awards as direct expenses:
- Basic telephone line and equipment charges and local telephone services
- Cellular phones, pagers and related service charges
- Routine postage costs and mail stop charges
- Routine reproduction (copying)
- Ordinary repairs and maintenance for state or institution-supported space in UW-owned buildings or facilities
- Office supplies used for administrative activities
- Memberships in technical and professional organizations and subscriptions to professional or technical periodicals as the benefit received cannot be limited or attributed to a single award
- Equipment depreciation
- On-campus space usage
- UW Technology Fee
If a department direct charges a cost to a federal award that is included in UW’s F&A rate, the following documentation should be retained on file:
- A description of how the cost is integral to the award
- Sponsor approval for direct billing of the cost.
If the costs was clearly identified and noted as an F&A cost being direct billed in the proposal budget and budget notes and the proposal was funded, then in most cases this serves as sponsor approval.