Sponsored Regulations and Allowable Expenses

Sponsored Research Administration (SRA) at FSU is responsible for ensuring compliance with federal and state regulations applicable to sponsored awards.  Additionally, sponsors may include more restrictive requirements within the terms and conditions of the award that must be followed.  It is important to understand the general regulations and to be knowledgeable of the specific requirements within the award to assure overall compliance.  Compliance is accomplished through SRA’s partnership with the Principal Investigator for the award as well as departmental staff. 

The Federal Office of Management and Budget (OMB) issued consolidated and revised regulations pertaining to federal awards (Uniform Guidance), which took effect December 26, 2014.  These regulations supersede Circulars A-21, A-110, and A-133. These circulars may still apply to awards issued prior to 12/26/14. It is necessary to review the award documents for the applicable federal regulations.

Monitoring awards ensures that expenditures conform to the cost principles, as outlined in the Uniform Guidance.  These principles, as listed below, apply to the sponsored project in accordance with the award budget, sponsor guidelines, and FSU’s policies and procedures.

Principle factors affecting allowability of costs

Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:

(a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.

(b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.

(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.

(d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.

Additional information can be found in OMB Circular A-21 or 2 CFR 200, §200.403.

Reasonable costs

A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded.  Refer to OMB Circular A-21 or 2 CFR 200, §200.404 for additional information.

Allocable costs

A cost is allocable to a project if goods or services involved are chargeable or assignable in accordance with the relative benefits received by the projects. In order to be allocable a cost must be treated consistently in like circumstances. For further information see OMB Circular A-21 or 2 CFR 200, §200.405.

Allowable Direct Costs on Sponsored Projects

Purchases charged to sponsored projects at FSU must initially follow the purchasing regulations established by FSU Procurement Services.  These costs attributed to work conducted on sponsored projects are classified as either direct or indirect costs.

Direct Costs - Costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or can be directly assigned to such activities relatively easily with a high degree of accuracy. 

Indirect Costs - Costs that are not directly related to a specific sponsored project and are incurred for common or joint objectives, sometimes referred to as overhead or F&A costs. These costs should be charged to non-sponsored funding sources, such as E&G, SRAD, PI support accounts, etc.

It is critical for the University to consistently treat all costs incurred for the same purpose in like circumstances as either direct or indirect. 

For further information, refer to the federal cost principles in 2 CFR 200, Subpart E.

If you have additional questions, check with your Accounting Coordinator for details.

Costs Generally Considered Allowable as Direct Costs

• Animals, purchase and care
• Alterations and Renovations when approved as listed within the proposal
• Bonding
• Computing devices that are essential and allocable in the performance of a Federal award
• Construction when approved as listed within the proposal
• Consultant Services
• Customs and Import Duties
• Equipment, depending on intended use
• Fringe Benefits, including leave and pension plan costs
• Publication Expenses
• Registration Fees (for Symposiums and Seminars)
• Rental or Lease of Facilities and Equipment
• Salaries and Wages (refer to exceptions for admin, clerical and percentage of time spent on proposal development)
• Service Charges
• Subject/Patient Costs, including recruitment, compensation and meals when appropriate
• Materials and Supplies
• Telecommunications - Itemized long distance calls
• Transportation of Property
• Travel

Costs Normally Treated as Indirect Costs (F&A)

• Administrative and Clerical Salaries
• Audit Costs
• Bid and proposal costs
• Computers and electronic devices for general use
• Depreciation or Use Allowances
• Dues and Memberships
• General Purpose Equipment: Non-research equipment, which may be used for general office purposes such as computers, printers, fax machines, copy machines, and office furniture.
• General computer services, networking costs, or other IT services for non-research purposes
• Hazardous Waste Disposal
• Insurance
• Interest
• Legal Services
• Office Supplies
• Postage Including U.S. Postal Service, Federal Express, UPS
• Staff Recruitment and Relocation
• Subscriptions, Books, Journals and Periodicals
• Telecommunications - Local Telephone Service, including phone equipment such as telephones, cell phones, pagers, fax machines, and line charges

Costs Generally Classified as Unallowable

• Alcoholic Beverages
• Bad Debts
• Termination or Suspension Costs
• Contingency Funds
• Entertainment Costs
• Fines and Penalties
• Fundraising Costs
• Honoraria
• Independent Research and Development Costs, including their proportionate share of F&A costs
• Lobbying
• Salaries and Wages – Percentage of time spent on proposal development
• Termination or Suspension Costs