1. Time with Office of Sponsored Programs May 4, 2010 Topic: Allowability

2. Allowability What compliance requirements determine allowability on a sponsored activity? –OMB Circular A-21 - Cost Principles for Educational Institutions Allowable Direct Costs + Allocable Facilities & Administration –Specific Sponsor Administrative Guidelines

3. Direct Costs Must be: –Identified specifically for a particular sponsored award –Directly assigned with relative ease and a high degree of accuracy –Consistently treated in like circumstances –Supported by documentation

4. F&A Facilities: depreciation, interest on related debt, operational, maintenance, and library costs. Administration: departmental, sponsored projects, student services, and other general administrative costs. –Incurred for a common or joint objective (e.g. utilities) –Cannot be easily identified with a particular award

5. Compliance Requirements Reasonable: –Act with due prudence –Consistent with University policies and procedures –Necessary for performance of the sponsored award Allocable: –Incurred solely to advance the work under the agreement –Benefits the sponsored program in proportions that can be reasonably approximated

6. Compliance Requirements Consistent treatment: –Practices consistent with reporting other costs for: same purposes, or like circumstances Conform to limitations or exclusions: –Sponsor may be more restrictive than A-21 –Specified in the award

7. OMB Circular A-21 Certain costs are expressly unallowable: –Alcoholic beverages –Alumni activities –Bad debts –Donations and Contributions rendered –Entertainment –Furnished automobile – personal use –Goods or services for personal use –Housing and personal living –Losses on other sponsored agreements

8. OMB CuricularA-21 Direct charging of F&A costs maybe allowable: –Documentation to support –Include in the budget and agreement –Sponsor approval Approval by sponsor without the above does NOT ensure allowability!

9. PI and Department Responsibility Ensure costs are: –Authorized in the budget & agreement –Meet requirements of allowability –Within period of availability –Charged timely to project –Appropriately documented Make timely and allowable cost transfers

10. Keep in Mind Allowability considerations throughout the life of the award process: –Proposal and budget – Cost Transfers –Monthly Managerial review – Cost Sharing –Subaward payments – PI Certification Unallowable costs directly charged to award Lack of supporting documentation Purchases late in the award period Costs outside period of availability

11. Questions for OSP