GAP 200.360, Charging Clerical and/or Administrative Expenses to Federally Funded Projects
- Criteria for Charging Administrative Expenses Directly to a Project
- Timing and Approvals
- Major Projects
Administrative and clerical expenses (for example, salaries of clerical & administrative personnel, office supplies, postage, local telephone costs, and memberships) should normally be treated as Facilities and Administrative (F&A) or Indirect Costs and should not be directly charged to federally sponsored projects. This guiding principle for handling administrative expenses is established and clarified in OMB Circular A-21, now 2 CFR Part 220. (This document will refer to these guiding principles as A-21.)
A-21 further provides that administrative salary expenses may be directly charged to sponsored agreements under certain exceptional circumstances. For example, universities may charge directly for clerical salaries “when a major project or activity explicitly budgets for administrative or clerical services, and individuals involved can be specifically identified with the project or activity.”
Non-salary administrative costs may be allowable on a federal award if these costs are utilized for a purpose, and in a manner that is “unlike” the consistent use of these items. For example, a project funded to conduct a national survey may require significant purchases of paper and postage in order to meet its specific research goals. The paper and postage are being used specifically to conduct a research survey and not as operational support for multiple activities. This is an example of an “unlike” circumstance.
Duke has established a formal process for reviewing and approving clerical and non-salary administrative costs to be charged to federal awards with a start date on or after September 1, 2007. This process does not apply to WBS Elements with an earlier start date.
A. Administrative/Clerical Salary Support
Administrative/clerical salary support is ordinarily treated as an F&A cost. It may be appropriate to charge these costs directly to federally sponsored projects only under certain circumstances:
- The administrative salary expense is for the performance of one or more of the activities or projects listed in the examples of “major projects” in Section V. Major Projects. In order for the administrative activity to qualify for direct charging for federally sponsored projects, it generally must be greater than the routine level of such services typically provided by the academic departments.
- The administrative expense must 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 must provide direct benefit to the project.
- The administrative expense should be explicitly listed in the approved proposal budget and should not have been specifically disapproved in the award notice. The proposal budget narrative, which includes explicit justification for the expense, must meet the guidelines of the appropriate Duke Pre-Award Office. Note: If the cost is not included in the original proposal, the Direct Cost Exception form must provide additional information as to why the cost was not originally included in the proposed budget. (See Section III. Rebudgeting below)
To secure approval for this type of expense, departments should prepare the Direct Cost Exception form at the time of award. A Direct Cost Exception form is required each time new funding is awarded, whether for an already existing WBSE or a new WBSE. The form should provide:
- Sufficient justification for the expense, including a description of the project in lay terms to provide an educated reader with a basic understanding of the purpose and scope of the funded project as it relates directly to the expense(s) being justified.
- The project description should provide sufficient detail to identify it as a “major project” as defined in OMB Circular A-21 and/or in Section V. Major Projects of this document.
- The justification should provide a brief description of the administrative duties to be performed, the approximate effort allocation associated with these duties, and how these duties directly relate to the primary purpose of the project.
The form should be approved as indicated and sent to the appropriate pre-award office for further review and approval. The pre-award offices will review the form on the basis of justifiable duties performed beyond the normal expectations of administrative support provided by the University. Once approved, the Office of Sponsored Programs (OSP) will establish a budget in the project’s WBSE according to the justification as indication of an approved expense category.
Please note: The University has imposed a threshold of $500 per General Ledger category for submitting a Direct Cost Exception form. Direct Cost Exception forms should only be submitted if the Principal Investigator can reasonably justify at least $500 in total charges in a specific General Ledger cost category. This means that no CAS form will be approved if the costs requested are LESS than $500 per category. CAS charges totaling less than $500 per G/L group in a budget period cannot be requested and cannot be charged. If charged, they are required to be removed or written off. The only exception to this policy will be by Management Center approval.
B. Non-Salary and Administrative Expenses
Administrative non-salary support (e.g. office supplies, postage, local telephone costs, and memberships) is ordinarily treated as an F&A cost. Please note that these administrative costs must be planned and used exclusively for a project's technical scope of work. The project need not be a major project, as defined in Section V. Major Projects, for non-salary administrative costs to be charged directly. Direct charging of these costs may be accomplished through specific identification of the costs to the sponsored project, as appropriate under the circumstances. Direct Cost Exception forms should address broad categories of expense based on the Duke G/L structure, and then provide more specific details of anticipated individual costs as warranted/available.
Duke has developed special guidance relating to the purchase of computers and computer-related equipment on federal awards. Please refer to this guidance when making these types of purchases.
For approval of these types of non-salary administrative expenses, departments should prepare the Direct Cost Exception Form at the time of award. A Direct Cost Exception form is required each time new funding is awarded, whether for an already existing WBSE or a new WBSE. The form should provide sufficient justification for each expense category. It should also include a description of the project, in sufficient lay terms to provide an educated reader with a basic understanding of the purpose and scope of the funded project, and the direct relationship of the expense to the project's activities.
The form should be approved as indicated, and sent to the appropriate pre-award office for further review and approval. Once approved, the Office of Sponsored Programs (OSP) will establish the appropriate budget in the project's WBSE as indication of an approved expense category.
C. How Departments Can Identify Projects with Potential CAS Expenses
The pre-award offices will review all awards for administrative and clerical costs included in the budget. If these items have been included in the approved budget from the federal sponsor, the pre-award offices will notify the Office of Sponsored Programs (OSP) that these costs are included in a sponsor approved budget. OSP will set a flag in SAP as a tracking tool to assist departments in identifying projects with potential CAS items included in their budgets. The flag is an indication of potential CAS items, and may be selected as a variant when running standard SAP reports. The SPCAS_PR and SPCAS_NOPR cost element groups should be selected while running monthly reports as part of the required monthly reconciliation process to identify CAS charges for justification and correction.
It will be necessary to rebudget under the following circumstances:
- CAS items were not included in the original budget OR there is need for additional CAS items that were not anticipated in the original budget. Recognizing that sponsored research is dynamic, unanticipated clerical and administrative costs may become necessary. In these circumstances, departments should complete the Direct Cost Exception form with specific attention to the rebudgeting section embedded in the form. Complete the form as indicated, providing specific information regarding the need for the expense in terms of the purpose and scope of the project, referring to the details of required justifications as provided in the above sections. Also provide a brief statement as to why these costs were not identified in the original budget submitted to the federal sponsor. Once approved by the appropriate pre-award office and the Office of Sponsored Programs (OSP), OSP will establish a budget in the project's WBSE as indication of an approved category.
- CAS items were included in the original budget submitted to the sponsor, but the CAS form was not prepared/approved before OSP established the new WBSE. Departments should justify these items and rebudget so that the budget plan in SAP reflects the approved CAS items.
Departments will have up to three accounting periods following the accounting period in which a non-approved charge posts to submit a Direct Cost Exception form. Research Costing Compliance will monitor all federal projects for compliance, and will notify the Management Centers of all non-compliant charges on a routine basis. Clerical and administrative charges not approved within the stated time frame will be removed from the federal award. Exception to this process is only allowed by petition to the Management Center. Note that the Management Centers have imposed a threshold on the categorical dollar amount of clerical and administrative charges that will be reviewed. Please refer to Section VI. Thresholds for further information.
Major projects are projects where direct charging of administrative salary expenses may be appropriate in that they require an extensive amount of administrative or clerical support that is significantly greater than the routine level of such services provided by academic departments. OMB Circular A-21 (Exhibit C-Examples of “major project” Where Direct Charging of Administrative or Clerical Staff Salaries May Be Appropriate) provides examples of major projects. 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. Projects that could have the necessary characteristics to justify direct charging of administrative expenses include but are not limited to the following:
- 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.
- 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).
- Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
- Projects whose principle focus is the preparation and production of manuals, large reports, books and monographs (excluding routine progress and technical reports).
- 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.
- Individual projects requiring project-specific database management; individualized graphics or manuscript preparation, human or animal protocols, and/or multiple project-related investigator coordination and communications.
Note: Research Costing Compliance (RCC) periodically monitors for appropriate documentation, internal controls and adequate justification. If the forms are inadequate or missing during the monitoring process, RCC will work with the appropriate Management Center to ensure that documentation is in place during the life of the project or at closeout. OSP will ensure that CAS expenses have been properly budgeted at the time of closeout and will write off any expense that is not appropriately justified and approved. (See GAP 200.180, Closeout of Sponsored Projects)
The University has imposed a threshold of $500 per General Ledger category for submitting a Direct Cost Exception form. Direct Cost Exception forms should only be submitted if the Principal Investigator can reasonably justify at least $500 in total charges in a specific General Ledger cost category. This means that no Direct Cost Exception form will be approved if the costs requested are LESS than $500 per category. CAS charges totaling less than $500 per G/L group in a budget period cannot be requested and cannot be charged. If charged, they are required to be removed or written off. The only exception to this policy will be by Management Center approval. RCC will monitor to ensure that this restriction is being appropriately enforced.
Note that ORS/ORA will reject any form that does not meet this criteria; exception only by Management Center approval.
For Pre-Award administration, contact either:
Office of Research Support 919 684-3030 Office of Research Administration 919 684-5175
For Post-Award administration contact:
Office of Sponsored Programs 919 684-5442
For additional information and guidance, please review a brief pdf tutorial on the CAS process.
Exception to the processes described above is only allowed by petition to the Management Center.
Note: This guidance is administrative in nature and is not a cost reimbursement policy. Failure to comply may or may not result in adjustments of charges to the award. Noncompliance with this policy does not mean this cost is unallowable from an external perspective. Any adjustments of charges will be as required under applicable federal cost reimbursement principles. If a cost is removed from an award for any reason, whether or not related to this guidance, the cost will generally be charged to departmental funds.