A-21 Implementation Guidelines: Charging for Administrative and Technical Expenses
The Uniform Guidance is effective for federally sponsored agreements and new funding increments awarded on or after December 26, 2014. Federal awards received before December 26, 2014 incorporating A-21 must continue to follow the requirements in OMB A-21 and Stanford’s policy on Charging for Administrative and Technical Expenses (RPH 15.4).
Stanford's policy incorporates OMB Circular A-21 requirements for direct charging of administrative and technical expenses. A-21 Section F.6.b. establishes the principle that administrative expenses should normally be treated as Facilities and Administrative (F&A) indirect costs, but that charging these costs directly to sponsored agreements may be appropriate where a major project or activity explicitly budgets for administrative and clerical services and the costs involved can be specifically identified with the project or activity. The revised policy also incorporates the A-21 definition and examples of major project/activity.
In addition, Stanford made the commitment to the Office of Naval Research (ONR) to require in its policy budget justifications for costs to be charged direct that are normally considered F&A.
Stanford's policy does not apply to non-federal sponsored projects. Administrative expenses that directly benefit such awards can and should be charged to those awards. However, the policy does apply if the non-federal sponsor receives federal funding for the project, specifically adopts A-21 guidelines, or has its own policies restricting administrative charges.
- Definition of Terms
- Policy Requirements
- Stanford Examples of Major Projects/Activities
- Budget Justifications
- Questions and Answers
- FAQs Applicability to Proposals and Awards
- FAQs Charging Administratively Intensive Activities Directly To Awards
- FAQs Major vs. Non-Major Projects
- FAQs Charging Administrative Costs Used for Technical Purposes
Definition of Terms
"Administrative expenses" are salaries and related benefits of those employees who perform non-technical support activities, and supplies and other expenses used to provide clerical or administrative project support. Examples of administrative expenses are the salaries, wages, and fringe benefits of administrative and clerical staff; office supplies; postage; local telephone costs; and memberships. Such costs are normally included in F&A (indirect) costs, but may be charged directly to a government sponsored project if it is a major project and the cost meets the remaining policy criteria.
"Technical expenses" are costs that provide direct benefit to a sponsored project's scientific or technical scope of work. Some examples of technical expenses are the salaries, wages, and fringe benefits of the PI(s) and technical or research employees; laboratory supplies; telephone toll charges; animals and animal care costs; non-administrative computer costs; travel costs; and specialized shop costs. (See questions 9 through 15 in the Q&A section for examples of costs normally considered administrative that, when used for a project's scope of work, should be charged as direct costs to the project.)
"Major project or activity," as defined in A-21, is a project or activity that requires an extensive amount of administrative or clerical support, which is significantly greater than the routine level of such services provided by academic departments. Major projects/activities are those that are administratively intensive and are not necessarily defined by the amount of funding.
"Non-major project or activity" is a project or activity that is not administratively intensive and only requires the level of administrative or clerical support that is routinely provided by academic departments. An aspect of the non-major concept is the limited ability to measure or quantify administrative effort provided to a specific project/activity. Some elements and examples of non-major projects/activities are:
No extraordinary data collection requirements
NIH Career Development (K) Awards
NASA Training Grants
NSF awards that support one PI and one or two graduate students (however, other circumstances may make the project major)
"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 and with a high degree of accuracy.
"Facility and Administrative (F&A) or indirect costs" are those costs that are incurred for common or joint objectives, and therefore cannot be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity.
"Specifically identified" means that the cost or effort in question can be directly linked to and directly benefits a sponsored project or activity in the same proportion as the amount charged.
"Pooled allocation method" means a process that collects or "pools" the costs of the labor of multiple employees or supplies and expenses, and then allocates the pooled costs to multiple sponsored agreements based on some common characteristic, such as modified total direct costs, square feet, or some other criteria that reflect the relative benefit received by the projects.
"Rotation of costs" means a process of charging expenses to multiple sponsored agreements by rotating the charging of successive purchases from one agreement to another regardless of the benefit to the sponsored agreements. (Stanford policy disallows this practice.)
"Accounting for effort" means a documentation of effort through through the Oracle Labor Distribution System , or other effort allocation processes.
"Cost Sharing" means that portion of total project costs of a sponsored agreement borne by the University rather than the sponsor. According to the Stanford Cost Sharing policy, committed cost sharing is the amount of project costs that Stanford agrees to contribute as part of the performance of the sponsored agreement. Committed cost sharing becomes part of the Organized Research base upon which F&A rates are calculated.
Stanford's policy, which complies with the requirements of OMB Circular A-21 Section F.6.b and Cost Accounting Standards (CAS), requires that:
Technical salaries and expenses (pertaining to a project's scope of work) be charged directly to sponsored agreements where identifiable to and provide direct technical benefit to a particular sponsored agreement.
Administrative expenses (pertaining to a project's administration) be charged directly when all of the following criteria are met:
The administrative expense is for the performance of one or more of the activities or projects listed in the A-21 examples of major project in Section V. of these guidelines. In order for the administrative activity(or activities) to qualify for direct charging to federal sponsored projects, they must be significantly greater than the routine level of such services provided by academic departments.
The administrative expenses can be identified specifically with a particular sponsored project or activity, or can be directly assigned to the project or activity relatively easily with a high degree of accuracy and provide direct benefit to the project.
The administrative expenses are explicitly listed in the approved proposal budget and are not specifically disapproved in the award notice. NIH modular grants or similar grant instruments do not require line-item budgets.
Note: Rebudgeting authority may be used to charge administrative expenses not included in the approved budget if specific rebudgeting authority for clerical and administrative expenses is allowed by award and sponsor rebudgeting guidelines. See, for example, NIH guidelines "Notice-Treatment of Administrative and Clerical Salaries Under NIH Grants."
Explicit budget justifications meeting the guidelines in the RPH policy are included in the proposal (either in the initial submission or after-the-fact if not known at time of initial submission). NIH modular grants or similar grant instruments do not require line-item justifications. However, Stanford does require an overall justification in the budget narrative that identifies the project as major and describes those aspects of the project that make it major.
Note: Rebudgeting authority may be used to charge administrative expenses not included in the approved budget if specific rebudgeting authority for clerical and administrative expenses is allowed by award and sponsor rebudgeting guidelines. See, for example, NIH guidelines.
When costs that are normally administrative (e.g., office supplies, postage, local telephone costs, and memberships) are planned and used for a project's technical scope of work, the project does not need to be major for those costs to qualify as technical costs and to be charged direct. They must, however, meet the other criteria (specifically identified to and benefit the project, explicitly included and justified in the budget, and not specifically disapproved by the sponsor) in order to be direct charged.
Dean's office administrative activities must be consistently treated as indirect costs. Accordingly, no Deans' office administrative expenses shall be charged directly to sponsored agreements. Dean's sponsored project activities are subject to this policy.
If the administrative expense does not meet the criteria for direct charging as described above, and if the expense is to be incurred, the administrative expense shall instead be charged to department or school activities/accounts within Function 1 (Instruction and Departmental Research).
Stanford Examples of Major Projects/Activities
OMB Circular A-21 defines major project as a project or activity that requires an extensive amount of administrative or clerical support which is significantly greater than the routine level of such services provided by academic departments. Major projects/activities are those that are administratively intensive and are not necessarily defined by the amount of funding. The administrative functions that relate directly to the activities that make the project major may be direct charged. In some cases that may be all of the administrative expense on the project.
A-21 provides examples of major projects, which are listed below followed by Stanford-specific examples. The examples illustrate projects where direct charging of administrative expenses may be appropriate. These examples are not exhaustive, nor are they intended to imply that direct charging of administrative expenses would always be appropriate for the situations illustrated in the examples.
|The following examples may not be used as a checklist. The presence of one component (e.g., human subjects) does not necessarily mean that the project is major. The project must be administratively intensive and also meet the requirements of the policy. It is the responsibility of the PI in conjunction with knowledgeable departmental administrators to determine whether a project is major.|
Large complex programs such as general clinical research centers, primate centers, Program Projects, environmental research centers, engineering research centers, and other grants and contracts that entail assembling and managing teams of investigators from a number of institutions.
- Grants/Contracts that make multiple or complex subawards to different faculty and/or other institutions
- Large complex programs such as Gravity Probe B (GPB), Plant Genome Research Program, Materials Research Science & Engineering Center (MRSEC), and Energy Resource centers
- School of Medicine General Clinical Research Center
- Program Project Grants (with subawards/suballocations given to different faculty)
Projects which involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, searching literature, and reporting (such as epidemiological studies, clinical trials, and retrospective clinical records studies).
- Grants/Contracts with clinical components involving substantial patient care or patient care data (including patient recruitment and patient billing)
- NIH Training Grants
- Education research projects that require extensive data collection and dissemination
- Telephone or mail surveys
Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
- Conference/workshop grants
Projects whose principal focus is the preparation and production of manuals and large reports, books, and monographs (excluding routine progress and technical reports).
- Curriculum development grants
- Grants to develop electronic reference materials
Projects that are geographically inaccessible to normal departmental administrative services, such as research vessels, radio astronomy projects, and other research field sites that are remote from campus.
- Grants/Contracts partially or entirely performed off-campus (locations remote from campus)
- Dissertation grants when performed at a remote location
- Other research conducted at field sites remote from campus
Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human or animal protocols; and multiple project-related investigator coordination and communications.
- Projects requiring extensive administrative management/record keeping of human or animal subjects performed by an administrator rather than technical staff
Budget justifications are required for administrative costs that will be incurred for the direct support of a federal sponsored project. An overall budget justification that explains the activities that qualify the project as a major project must be included in the proposal as well as justifications for each category of administrative cost. (See example below of an overall budget justification.) After-the-fact budget justifications are allowable when approved by the sponsor. It is the responsibility of the PI in conjunction with knowledgeable departmental administrators to determine whether a project is major.
The following are key elements that are to be included in budget justifications:
A description of the expense or service
How it relates to and benefits the project
The anticipated cost
The time period in which it will be utilized
Any other information that will aid the sponsor in evaluating and funding the proposed item of cost
When writing budget justifications for categories of administrative costs, the amount of detailed information in the justification should be tailored to sponsor-specific requirements and the specific project or activity. For personnel and other expenses, explain the function of the position or cost as it directly relates to and benefits the project. Be sure to include project specific details to highlight the activities that make the project administratively intensive and thus a major project. When such costs are explicitly listed and justified in the sponsor-accepted budget, grant/contract administrators, auditors, and sponsoring agencies can easily understand the nature of the costs and their allowability under the regulations. The primary purpose of a justification is to provide support for the funds requested to ensure adequate funding. Experience has shown that including budget justifications in the proposal increases the likelihood that the sponsor will award the administrative cost.
Sample Budget Justification
This project is major, as defined by OMB Circular A-21, and meets government requirements. It is major because ______________________________
(e.g., it will require the accumulation and distribution of large quantities of real-time data from Stanford University to other institutions and collaborators).
The Principal Investigator will require administrative support to ensure meeting the goals of this project. All personnel effort and expenses charged to this project will be for services specific to the project and not for the general support of the faculty or the academic activities of any University department. In addition, all effort charged to this project can be specifically identified through an effort allocation system such as that reflected on a ___________________________________
(e.g. Lab Time Card, other).
Note: Only include information that is applicable to and accurate for your project.
Questions and Answers
FAQs Applicability to Proposals and Awards
I have a non-federal sponsored project that requires administrative effort and supplies. Do I need to meet all of the policy criteria in order to charge them as direct costs to the project?
No, you do not need to meet all the policy criteria to charge administrative costs directly to non-federal awards. The policy is applicable to federally sponsored awards and only to non-federal awards when the non-federal sponsor:
- receives federal funding for the project, or
- specifically adopts A-21 guidelines, or
- has its own policies restricting administrative charges.
The costs must still be specifically identified to and benefit the project.
FAQs Charging Administratively Intensive Activities Directly To Awards
If my project qualifies as major, can I charge all of the administration related to that project as a direct cost?
No. Even if your project is major you can't assume that all of your administration can be charged direct. You can only charge all of a project's administrative costs as direct costs when:
all project-related administration pertains directly to the activities that make the project major (project-related administration is extensive and beyond the routine level), or
the project is complex (as described in A-21 example #1), or
the project is geographically inaccessible (as described in A-21 example #5), or
the project requires multiple project-related investigator coordination and communications (as described in A-21 example #6).
I have a small project that is less than $100K for salaries and supplies only. The project requires someone to process and track complex human subject protocols. Can I charge administrative effort to this project?
You may charge the human subject protocols administration directly to your project if that activity is intensive and all other policy criteria have been met (specifically identified to and benefit the project, included and justified in the budget, and not specifically disapproved by the sponsor). There may be other project activities that would warrant direct charging of administrative expenses.
What if I have a project that includes coordinating a conference for many participants, but includes research administration for the rest of the project as well. Can I charge all of the administration as a direct cost?
No. Unless the research administration is administratively intensive, only the administration related to coordinating the conference is allowable as a direct charge. You need to consider the project's other administrative activities using the examples listed in the policy and these guidelines to determine whether they can be charged direct.
Can I charge all of my project-related administration if I have a conference grant that I am administering?
Yes, as long as all of the administration is related to coordinating that conference grant.
FAQs Major vs. Non-Major Projects
One of the projects in my department is to develop an electronic encyclopedia on a website that will be maintained on an on going basis. Do you think this would classify as a major project? Some of the activities that seem administratively intensive are communication with and coordination of several board members and many contributing authors, managing their computer accounts and entries, providing HTML support to the authors, literature retrieval, word processing input, and maintaining the website.
Yes, your project is a major project under, A-21 example 4, whose primary focus is the preparation and production of manuals and large reports, books, and monographs. The activities you mention make this project administratively burdensome and therefore major. All of the administrative activities that are intensive can be charged direct.
I have a project in the Medical School that uses animal subjects. According to the definition of major, a project with human or animal protocols is considered a major project. I am not sure whether my project is administratively intensive because the research associate assigned to the project, not an administrator, manages all the work associated with the animal protocols. Is my project major?
Even though OMB Circular A-21 and Stanford's policy lists projects with animal or human subject protocols as projects that may be major, the project must also be administratively intensive in order to classify as a major project. In your case, the research associate who is conducting the animal protocols and applying their technical expertise to the procedure is already being charged directly to the project. The fact that your project requires animal protocols does not make it administratively intensive, and therefore does not make your project major. However, if an administrator conducts the animal protocol activities and you consider that effort to be administratively intensive, your project may be major. There may be other conditions that may make your project major and related administrative costs that may be charged direct.
FAQs Charging Administrative Costs Used for Technical Purposes
Does the project have to be considered major in order to charge publication costs?
No. Federal awards require the PI to publish the results of federally funded projects. Therefore, this is an example of an administrative charge used for the technical purpose of the project and the "major" criteria does not have to be met.
If a project is not administratively intensive, and therefore not major, what types of costs can be charged directly to a sponsored project? For example, for my project we must mail time-sensitive samples using an overnight delivery service. The samples must be delivered before they deteriorate. Can I charge these costs to my sponsored project?
In the example you have cited, the costs are for the project's scope of work, rather than for the administration of the project, and can be charged as direct costs as long as they can be specifically identified to and benefit the project, are included and justified in the budget, and are not specifically disapproved by the sponsor.
Can I charge the costs of photocopying research papers and making transparencies for use in technical meetings to my sponsored project?
Since these costs pertain to the scope of work of the project, you can charge them as direct costs as long as they can be specifically identified to and benefit the project, are included and justified in the budget, and are not specifically disapproved by the sponsor.
I administer the sponsored projects in the Computer Science Department. Computer costs are listed in the policy as technical costs. Does this definition also include computer-related items such as computer networking cables, toner, and paper for the printer? If so, can the cost of these items be charged to a non-major project?
In the Computer Science Department, your laboratory equipment includes your computers. It is reasonable to charge toner, paper, networking cables, and other computer-related items as direct costs as long as they can be specifically identified to and benefit the project, are included and justified in the budget, are not specifically disapproved by the sponsor, and you are not using the computers for routine departmental administrative work. If the computers are being used for routine administrative work for your department as well as technical purposes, the time spent on routine administration must be tracked and the costs charged to a departmental operating or other account. If the administration directly benefits the project and meets the criteria of the policy, the cost can be charged to the project. If the user devotes 100% effort to the research project, the total computer-related cost should be charged to the project.
This scenario may also apply to projects in other departments that use computers for data analysis, statistical sampling, mathematical modeling, etc.
I administer several non-major projects. Can I charge the copying and postage charges for the interim and final reports directly to the projects?
Copying and postage charges may be incurred as general departmental administrative costs, but in this case the costs pertain to technical reports, which are explicit programmatic requirements of the sponsored project and should be charged directly to the award. It is part of the performance of the scope of work of the project and the way the research results are communicated to the sponsor, colleagues, and collaborators. A budget justification for this category of costs is required. GL code 94630 "Report Costs" should be used when charging these expenses.
Several months after my project was awarded I needed to do some technical work that required use of some items that are normally administrative. What must I do in order to be able to charge these costs directly to my project? I did not anticipate these costs so they are not in my proposal.
If your sponsor is NIH, or another sponsor that allows specific rebudgeting authority for administrative expenses, you can use that authority to charge administrative expenses. If your sponsor does not allow rebudgeting authority for administrative expenses, you must supply a budget justification and obtain sponsor approval.
I have a contract where human subjects interviews are part of the project's scope of work. The PI forgot to include a line item for transcription services and did not document the project as major. The project requires that the interviews be transcribed. Does the PI need to inform the sponsor that the project is major and request rebudgeting approval?
When the transcription service is intensive in nature and in sole support of the project's scope of work, it should be charged as a direct cost after providing the sponsor with the necessary documentation, including justification, to obtain their approval. This is the type of activity that would fall under major project example #6. Transcription services are the kind of activity that may be considered administrative or technical depending on the purpose of the activity. If the transcription service is in support of normal departmental activities, then the cost is administrative and should not be charged as a direct cost to the grant.