Last revision: February 5, 2007
Federal regulations as described in OMB Circular A-21 provide
definitions of the types of costs that are normally defined as
direct costs vs. indirect (F&A) costs. As stated in A-21,
In general, direct costs are those costs that can be identified
specifically with a particular sponsored project, an instructional
activity, or any other institutional activity, or that can be
directly assigned to such activities relatively easily with a
high degree of accuracy. Costs incurred for the same purpose
in like circumstances must be treated consistently as either
direct or F&A costs. Identification with the sponsored work
rather than the nature of the goods and services involved is
the determining factor in distinguishing direct from F&A
costs of sponsored agreements.
Conversely, F&A costs are those that are incurred for common
or joint objectives and therefore cannot be identified readily
and specifically with a particular sponsored project, an instructional
activity, or any other institutional activity.
At the budget preparation stage of proposal development, costs
that can be identified as normally F&A costs are discussed
with the PI or his/her designee to determine extraordinary circumstances
requiring an exception to the standard. An explicit budget justification
must be included in the proposal describing the extraordinary
costs and specific review by the signatory authority or designee
is required.
A link to OMB Circular, Section J, helps the researchers understand
the types of costs that are normally considered F&A costs
or are considered unallowable.
When a sponsored award is received, there are various levels
of review to determine the appropriateness of expenditures and
obligations in light of the definitions outlined above. These
reviews occur at the PI/departmental level, in Post Award Services , and in the accounts payable section
of Business Services.
Research administration training sessions consistently stress
the reasonable, allocable, and allowable provisions of A-21 and
these provisions are the basis for proper expenditures on sponsored
agreements.
OMB
Circular A-21
Questions? Please contact:
Barbara Earl
785-864-7781 | bearl@ku.edu
Manager | Proposal Services
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