What’s allowable and unallowable?
An allowable cost is a cost that can be charged or assigned to a sponsored program. The University of Texas at Dallas follows the following guideline, Allowable Cost on Federally funded Contracts and Grants, which outlines the allowable costs for grants, contracts, and sub‐awards. This guideline follows cost accounting standards as prescribed in OMB 2 CFR Part 220 (Uniform Guidance) and The University of Texas at Dallas Expenditure of Funds policy – UTDBP3097.
These are the basic criteria to determine direct costs on federally sponsored projects. Regardless of the funding agency, costs for sponsored programs are based on answering the following questions:
Are costs allocable, allowable, consistent, and reasonable in like circumstances, allowed by UTD policy, sponsor policy, federal and state polices?
Cost sharing is that portion of a project or program cost that is not reimbursed by the sponsor (whether Federal or non-Federal) to support the scope of work defined by the sponsor and as such, represents a commitment of institutional resources that would otherwise be devoted to other University purposes. Cost sharing is funded by UTD or, in some cases, a third-party resource, generally a non-federal sponsor.
The University of Texas at Dallas follows the following guideline, Cost Sharing which outlines the cost sharing guidelines for contracts and grants. This policy follows cost sharing standards as prescribed in OMB 2 CFR 200 Uniform Guidance sections 200.29, 200.99, and 200.306
These are the basic criteria to determine cost sharing on federally sponsored projects.
A cost transfer is defined as an after-the-fact reallocation of a cost (expenditure) from one cost center to another. Cost transfer that move costs from or to a sponsored project cost center are monitored, reviewed, and approved by the Office of Post Award Management.
The University of Texas at Dallas follows the following guideline, Cost Transfers, which outlines cost transfers for grants, contracts, and sub-awards. This guideline follows the cost accounting standards as prescribed in OMB 2 CFR 200 (Uniform Guidance), UT System Cost Transfer Policy, and The Office Of Finance Financial Reporting and Award Closeout for Sponsored Projects procedure.
Cost transfers involving sponsored projects are allowable only in special circumstances, including:
- Error correction
- Transfers between suballocations of the same sponsored project
- Costs benefiting more than one project
- Clearing potential or actual overruns
- Disallowed costs
Where a funding period is specified, a grantee may charge to the award only costs resulting from obligations of the funding/budget period unless carryover of unobligated balances are permitted, in which case the carryover balances may be charged for costs resulting from obligations of the subsequent funding period.
The University of Texas at Dallas follows the following guideline, Period of Performance, which outlines the timeframe during which an entity may incur costs to carry out the work authorized under the Federal award. This policy follows cost accounting standards as prescribed in OMB Uniform Guidance 2 CFR 200 – 200.77 and The University of Texas at Dallas Expenditure of Funds policy – UTDBP3097.
These are the basic criteria to determine direct costs on federally sponsored projects.
Travel is allowable as a direct cost when such travel will provide direct benefit to the project. The University of Texas at Dallas follows the following Travel guideline, which outlines the allowable travel costs for grants, contracts, and sub‐awards. Sponsored projects are subject to certain federal laws (if federally funded), the guidelines set forth in the Office of Management and Budget (OMB) 2 CFR 200 200.474 (if federally funded), specific agency restrictions, as well as The University of Texas at Dallas Travel Policy. The terms and conditions of the individual agreement should be reviewed prior to incurring and/or processing any travel cost. When there is a conflict between university policy and award requirements, the most restrictive policy applies.
These are the basic criteria to determine Travel costs.
Accurate research records are an essential and required component of any research related project. Both the University of Texas at Dallas and the Principal Investigator have responsibilities and rights concerning access to, use of, and maintenance of original research data regardless of the source of funding for the project.
Please note that except where precluded by the specific terms of a sponsored agreement, tangible research property, including the scientific data and other records of research conducted by the faculty or staff of the University, belongs to the University.
The University of Texas at Dallas follows the following internal Office of Research policy, Sponsored Projects Record Retention, which outlines the requirements and procedures for retaining official Sponsored Projects grant documents, and The University of Texas at Dallas Record Retention policies and requirements.
The role of the Office of Post-award Management (OPM) is to assist departments in monitoring grant expenditures. One procedures that OPM conducts is to reviews all expenditures and ensures that budget exists on the Budget Line item for that expense (Budget Line Item control).
This Budget Line Item checking procedure was put into effect due to the change in December 2014 of the OMB Circulars (Cost Principles and Administrative requirements for federal grants distributed by the Office of Management and Budget (OMB)) to a more “Uniformed Guidance”. One of the most significant changes is the timeframe of award close-out reporting MUST BE no later than 120 days after end date of period of performance – submittal of all performance, financial and other reports as required. – OMB 2 CFR 200.344 Closeout. It has been stated by OMB that there will be a stricter adherence to this guideline.
This Budget Line Item checking will better enable the Office of Post Award Management, Office of Finance, and Departments to ensure compliance with the proposed budget award terms, New Uniform Guidance requirements , ease of financial management throughout the life cycle of the award, and the above mentioned award close-out process/45 day policy.
In cases of over expenditure, the PI and department administrator should take immediate steps to eliminate the shortfall within the month after it appears on the Financial Summary Reports. In practice, over expenditures should not continue beyond a three month period.
How OPM manages over expended grants:
- OPM will notify the Principal Investigator and/or department if an over expenditure occurred.
- However, you should not wait until you are notified by OPM of the overdraft to initiate corrective action. If OPM is advised that additional funds are forthcoming within ninety days (either through continuation, renewal, or incremental funding of the award), then the over expenditure can remain in place.
- If additional funds are not expected, then action should be taken to clear the over expenditure before month end. It is a normal course of action for the department to transfer expenses off the grant to another grant as allowable (IDT or ePAR).
- If the PI is unable to resolve or propose a plan to remedy the over expenditure, a notice will be sent to the School Fiscal Officer specifying the project/grant, and amount overspent to request assistance to clear the over expenditure.
- If the over expenditure is still not cleared, an unrestricted department account will be requested by OPM from the School Fiscal Officers to absorb the over expended balance.
Due to unanticipated circumstances, a Principal Investigator may need additional time to complete the project. A request for a no-cost extension must be submitted to the Office of Sponsored Projects (OSP) and should provide such information as cause of delay, objectives to be accomplished, period of extension, and the remaining funding. Please refer to Period of Performance guideline and Office of Sponsored Projects website for further information on No-cost extensions.
Participant support costs are those direct costs paid to (or on behalf of) participants or trainees (not employees) for participation in meetings, conferences, symposia, and workshops or other training projects, when there is a category for participant support costs in the award.
The University of Texas at Dallas follows the following Participant Support guideline, which outlines the participant support costs guidelines. This guideline follows cost accounting standards as prescribed in OMB 2 CFR Part 220 (Uniform Guidance).
Please refer to the following matrix to determine the best classification: Research Assistant vs Participant Support vs Research Subject Payment.
Research projects involving human subjects often offer a small payment to research subjects for purposes of recruitment or encouragement for participation in the project.
The University of Texas at Dallas complies the following guideline, Research Subjects Payment, which outlines Research Subject’s payments for grants, contracts, and sub-awards. This guideline follows the UTD’s Institutional Review Board (IRB) and The University of Texas at Dallas UTDBP3036 – Policy on Payment of Research Subjects.
Please visit Research Integrity and Outreach website for further information on Human Subjects Research.
Why computers or data storage devices are normally treated as indirect costs?
Technology has changed rapidly over the past few decades. Desktops, laptops, and data-storage devices include a wide range of functions: computation, data storage, correspondence, communication, entertainment, etc. The regular use of computers and data-storage devices in daily business operations makes it difficult and impractical to isolate specific scientific functions and their related costs with a high degree of accuracy.
Desktops, laptops, and data-storage devices below the capitalization threshold are generally considered to support a variety of activities and cannot be linked to one specific project. Therefore, computers are typically treated as indirect costs.
Examples of computers that should be considered an indirect cost:
Computers that are assigned routinely to students, staff, or faculty members
Computers located in any generally accessible area in a lab or office space
When may computers or data-storage devices be charged as a direct cost?
A computer or data-storage device may be charged as a direct cost if the purchase will be necessary for a specific sponsored research project and will not be used as general-purpose equipment.
Examples of computers that can be charged as direct costs:
A computer is physically attached to another piece of scientific equipment
and/or is required for collection and analysis of information/data
A laptop is specifically needed to record data in field research
A computer is used primarily on the designated sponsored award
The Principal Investigator must attest that the computer would not be purchased if not for the sponsored project.
If you plan to charge computers or software to a sponsored project as a direct cost:
Conform to restrictions and approval requirements outlined in the terms and conditions of the award
Provide a written justification to explain the way that the computer is being used and to outline its specific purpose related to the scientific scope of workAccordion Item
The University of Texas at Dallas is responsible for ensuring that all sub recipients of its sponsored research awards are in compliance with applicable procedures and requirements, including The OMB Uniform Guidance review of all pending and executed Subcontracts with particular attention paid to scope of work statements (SOW), billing instructions, contact information, and amendment and modification sections.
Sub-recipient is defined as a non-Federal entity that expends Federal awards received from a pass-through entity to carry out a Federal program, but does not include an individual that is a beneficiary of such a program. A sub-recipient may also be a recipient of other Federal awards directly from a Federal awarding agency.
The University of Texas at Dallas follows the following Subrecipient Monitoring guideline, which outlines the procedures and guidelines for sub-awards. This policy assures compliance with the OMB 2 CFR 200.331-333 Subrecipient Monitoring and Management.
What you Should Know
2 CFR 200 (Uniform Guidance)
The Office of Management and Budget (OMB) combined many of OMB federal circulars, including A21 and A110, into a single guidance document to be used by all agencies. This combined document is known as “Uniform Guidance.” As stated, per the OMB webpage this guidance “will supersede requirements from OMB Circulars A-21, A-87, A-110, and A-122 (which have been placed in 2 C.F.R. Parts 220, 225, 215, and 230); Circulars A-89, A-102, and A-133; and the guidance in Circular A-50 on Single Audit Act follow-up.” The Uniform Guidance was updated with new changes taking effect Fall 2020.
A quick reference of some of the key changes in the Uniform Guidance.
Navigating the Uniform Guidance (2 CFR 200)
Preamble – Major Policy Reforms
Subpart A (200.0 – 200.99) – Acronyms and Definitions
Subpart B (200.100 – 200.113) – General Provisions
Subpart C (200.200 – 200.211) – Pre Award Requirements
Subpart D (200.300 – 200.345) – Post Award Requirements
Subpart E (200.400 – 200.475) – Cost Principles
Subpart F (200.500 – 200.521) – Audit Requirements (includes Appendices I-XI) -Subpart F will apply to audits of fiscal years beginning on or after December 26, 2014
In addition, the Uniform Guidance Table of Contents is a useful resource.
In December 2014, the U.S. Office of Management and Budget (OMB) issued the OMB 2 CFR 200 “Uniform Guidance” that replaced the administrative and accounting rules and principles previously found in several OMB Circulars (A21). The Uniform Guidance is intended to improve efficiency, effectiveness and transparency of administrative requirements while also reducing waste, abuse, and administrative burden.
Uniform Guidance offers the ability to reduce administrative burden on faculty researchers by transitioning to an acceptable alternative method for faculty effort certification programs. Moreover, the Uniform Guidance allows for institutional autonomy on financial and compliance risks, which aligns with the Chancellor’s vision of empowering UT System institutions, where appropriate.
In August of 2016, UT System gave each UT System Institution the responsibility to establish policies that address the compensation requirements in the above mentioned Uniform Guidance Cost principles. Additionally, each institution should be supported by procedures and monitoring activities to ensure the policy is implemented as intended.
The University of Texas at Dallas fulfills the above change in regulation and responsibility through the use of the Sponsored Project Compensation Confirmation (SPCC) process and system. The SPCC pages utilizes some of the same format and documentation requirements as the already established functions of the PeopleSoft Finance Account Reconciliation and Letter of Representation application pages and processes.
The University of Texas at Dallas (UTD) complies with the following two policies:
- The University of Texas at Dallas Sponsored Projects Compensation Confirmation policy which outlines the University guidelines for Sponsored Project Compensation Confirmation
- OMB Uniform Guidance 2 CFR 200.430 – Office of Management and Budget federal compensation policy
By reviewing and digitally signing a Sponsored Projects Compensation Confirmation Document (SPCCD), the principal investigator and/or co-principal investigator of a sponsored project certifies on an after the fact annual basis that the salary and wages charged to their sponsored projects, including committed cost share, are accurate and reasonable in relation to the work performed for the Reported Time Period.
The following training presentations show an Overview, “How To”, and a Quick Guide of navigation of the Sponsored Projects Compensation Confirmation process and system:
Read about the close-out process for sponsored projects.