Guide section list
Comprehensive reference guide
Administrative and clerical salaries; office supplies
Subpart E: Cost Principles
Definitions Accordion Closed
200.413 Direct costs.
Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
200.56 Indirect (F & A) costs
Indirect (F&A) costs are those costs incurred for a common or joint purpose benefitting more than one cost objective.
Note
Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect costs.
Text Accordion Closed
200.412 Classification of costs.
There is no universal rule for classifying certain costs as either direct or indirect (F&A) under every accounting system. Therefore, it is essential that each item of cost incurred for the same purpose be treated consistently in like circumstances either as a direct or an indirect (F&A) cost in order to avoid possible double-charging of Federal awards.
200.413 Direct costs.
The salaries of administrative and clerical staff should normally be treated as indirect (F&A) costs. Direct charging of these costs may be appropriate only if all of the following conditions are met:
(1) Administrative or clerical services are integral to a project or activity;
(2) Individuals involved can be specifically identified with the project or activity;
(3) Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency; and
(4) The costs are not also recovered as indirect costs.
Explanation Accordion Closed
There are three significant changes from the discussion of administrative and clerical salaries in OMB Circular A-21. First, the Uniform Guidance eliminates the major project standard as a prerequisite for the direct charging of administrative and clerical salaries; second, a new criterion has been added, which requires administrative of clerical services to be integral to the project or activity; and, third, the costs require prior approval, either as part of the approved budget or a written approval if the expense is proposed after award.
NAU defines “integral” as (1) essential, vital, or fundamental to meeting project or activity goals and objectives; and (2) a minimum of 10% FTE (e.g. one morning or afternoon each week) budgeted for each year of employment on the sponsored project — unless there are documentable special circumstances.
Note: Typically, office supplies (“general purpose” supplies) are treated as indirect costs, however, such costs may be directly charged if they support the project’s scope of work and are allowable, allocable, reasonable, and consistently treated in like circumstances.
Contact a OSP GCA or PRA prior to including them in a proposal budget or OSP PAA before incurring these expenses after award.
Application Accordion Closed
Agency prior approval is required to directly charge administrative costs.
These costs must be explicitly included in the proposal and awarded budget or receive agency prior written approval, if requested after award.
If administrative and clerical salaries are necessary for the successful completion of the scope of work and meet the criteria for direct costing, then they should be included in the proposal budget with a justification that addresses the four criteria for direct costing. In particular, Federal proposals must explain how the administrative support is “integral” to the success of the project.
Note: Programmatic Salary Costs related to protocol development and maintenance, managing substances/chemicals, managing and securing project-specific data, and coordination of research subjects are allowable direct costs when they are “contributing and directly related to work under an agreement.” Thus, these programmatic costs may be direct charged using the same underlying requirements as other types of direct costs, and are not subject to the extra approval requirements required of administrative and clerical costs. They are still subject to all regular costing requirements (e.g., allocable, reasonable, and allowable by terms of the award, and incurred within award period).