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Budgeting Direct Costs of Sponsored Programs

Procedure: 8-14

Effective: July 1, 2001

Owner: Office of Sponsored Programs

Latest Revision: August 28, 2018

Procedure Steps | Scope | Policy | Responsibility | Distribution | Ownership

Scope

This procedure provides guidance on budgeting the direct costs of sponsored program projects supported by both federal and non-federal sponsors.

Policy

Policy FIN-017: Consistent Treatment of Sponsored Programs Costs

Responsibility

School/Departmental Administrators

The School/Department administrator is responsible for preparation and submission of the sponsored budgets to the Office of Sponsored Programs.

Office of Sponsored Programs

OSP is responsible for reviewing the approved budget for completeness; incuding ensuring all requests are in compliance with the sponsor and Institutional policies.

Distribution

Principal Investigator

Research Administrator -- School/Department

Grants Specialist/Accountant -- Office of Sponsored Programs

Ownership

The Assistant Vice President for Research Administration is responsible for ensuring that this procedure is necessary, reflects actual practice, and supports University policy.

Procedure Steps

This activity is performed whenever one is budgeting the direct costs of sponsored program projects and awards.

Sponsored Programs Budgeting:

Budget Format

Budget categories developed from this procedure will be loaded into the Integrated System in the format awarded by the sponsor, using the expenditure categories outlined in this procedure, as noted in the scenarios below.

In many cases, the awarded sponsor budget will be less detailed than the proposed budget; examples are NIH modular grants.

NOTE:

Modified Total Direct Costs (MTDC) consist of salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants and subcontracts up to the first $25,000 of each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract). Equipment, capital expenditures, charges for patient care, tuition remission, rental of off-site facilities, participant support costs, scholarships, and fellowships as well as the portion of each subgrant and subcontract in excess of $25,000 shall be excluded from modified total direct costs.

Total Direct Costs (TDC) consist of all charges directly associated with research.

Budgeting and Charging of Direct Costs

The University must consistently classify allowable costs as direct or indirect. The following categories of cost are considered to be direct costs of sponsored programs and should be fully provided for in the budget request:

  1. Personnel
  2. Fringe Benefits
  3. Graduate Research Assistants
  4. Tuition Remission
  5. Equipment
  6. Travel
    • Domestic Travel
    • Foreign Travel
  7. Trainee Support Costs
    • Trainee Tuition
    • Trainee Stipends
    • Trainee Travel
  8. Materials and Supplies
  9. Consultant Services
  10. Other Services
  11. Subcontracts/Subawards
  12. Rental of Off-Site Facilities
  13. Alterations and Renovations
  14. Patient Care Costs
  15. Participant Support Costs
  16. Other Direct Costs
  1. Personnel
    The salaries and wages of University employees directly associated with the sponsored program project are considered direct costs. These costs should be charged to the project in proportion to the percent of each employee's effort expended on the program during each pay period except for that portion which may be applied to cost sharing.
    • Salaries (F/T faculty) Salaries (permanent P/T faculty)
    • Wages (P/T faculty)
    • Wages (daily, hourly employees, UVa temps)
    • Student Wages (hourly)
  2. Employee Benefits
    The employer's cost of fringe benefits is considered a direct cost and is charged to sponsored programs based on a federally approved percentage of salaries and wages. These composite rates include the cost of the University and State retirement programs, health insurance, group life insurance, social security, disability insurance, workmen's compensation, and unemployment compensation. The current negotiated rates to be applied to budgeted salaries and wages can be found at the OSP website.
    NOTE: Graduate Research Assistant health insurance costs are budgeted under Other Direct Costs and are subject to F&A charges.
  3. Graduate Research Assistants
    Graduate Research Assistant wages directly associated with the sponsored program project are considered direct costs and should be charged to the project in proportion to the effort expended on the program during each pay period except in the rare case when a graduate assistant’s cost is being used for cost sharing. 
  4. Tuition
    The In-State portion of tuition (remission) for enrolled graduate students, along with any associated required fees, should be budgeted and charged as a direct cost in proportion to the percent of each graduate student’s effort expended on the program during the semester.
  5. Equipment
    Equipment refers to property with an expected service life of one year or more, and a unit acquisition cost of $5,000 or more. Materials and supplies used to fabricate equipment which is subsequently capitalized and where ownership is retained by UVa also falls under this category.
    NOTE: Equipment costs are exempt from F&A recovery unless the indirect cost basis for the award is total direct cost (TDC).
  6. Travel should be treated as a direct cost of the grant or contract where such travel will provide direct scientific benefit to the program and is within specific sponsor restrictions. Reimbursement of travel costs are subject to the Commonwealth of Virginia and University of Virginia standard policies and procedures. Sponsors request that domestic and foreign travel are detailed in the proposal.
    • 6a. Domestic travel is considered to be travel within the United States and Canada. Examples of domestic travel expenditures are as follows:
    • 6b. Foreign Travel
      Foreign travel is deemed to be travel outside the United States and Canada including travel within the U. S. or Canada when en route to or returning from a foreign destination.
      Travel – Subsistence and Lodging, For
      Travel – Public Carrier, For
      Please refer to the Procurement and Supplier Diversity website for further information about domestic and foreign travel.
    • Travel, Personal Vehicle
    • Travel, State Vehicles
    • Travel, Rental Vehicle , U.S.
    • Travel, Public Carrier, U.S.
    • Travel, Subsist and Lodging , U.S. 
  7. Trainee Support Cost
    • 7a.Trainee Stipends
      Such costs are allowable as direct costs on fellowships and training grants only. This cost category is restricted and any increase or decrease in the total amount budgeted requires prior sponsor approval. The most frequently encountered stipends are as follows:
      • Undergraduate Stipends
      • Graduate Stipends
      • Post Doctoral Trainee Stipends
    • 7b. Trainee Tuition
      In-State and Out-of-State tuition and fees charged to regularly enrolled students should be budgeted and charged as a direct cost of training grants. Charges to this cost category are frequently subject to specific program restrictions and reference should be made to the sponsoring agency policy guidelines to determine allowability of charges. The expenditure types for trainee tuition and fees are as follows:
      • Undergraduate Tuition and Fees
      • Graduate Tuition and Fees
    • 7c. Trainee Travel
      Travel costs within the terms of the sponsor award for full-time trainees who have received formal appointments are considered direct costs of the grant. The travel must be in accordance with University and sponsor regulations. Trainee travel costs should be coded:
      Trainee Travel - Sponsored Programs
  8. Materials and Supplies The cost of supplies, materials and non- capitalized equipment (under $5,000 or items costing more than $5,000 with an expected service life of less than one year) directly required for the performance of the grant or contract are considered direct costs. Supplies include acquisition of animals for use in research, laboratory supplies etc. 
  9. Consultant Services Consulting Services are considered to be advice or assistance of a purely advisory nature provided for a predetermined fee by an outside individual entity. Individuals providing consulting services must always meet the criteria defining an Independent Contractor. 
  10. Other Services
    Direct costs in this expenditure category include but are not limited to the following: The services listed above may be provided by internal service providers or external vendors. Charges for services offered by internal services providers should be based on rate schedules issued by each support service activity as approved by the University.
    • Electrical Repair and Maintenance
    • Equipment Repair and Maintenance
    • Mechanical Repair and Maintenance
    • Plant Repair and Maintenance
    • ADP Maint. Serv. Contracts (Equipment)
    • ADP Maint. Serv. Contracts (Software)
    • Telecommunications (Long Distance Service)
    • Printing (other than Stationery)
    • Photocopying, Microfilming, Developing and other Reproduction
    • Publication Costs - Sponsored Programs
    • Freight and Express Service
    • Technical Services
    • Animal Care
    • UVa Temp Services Fees
    • GRA Health Insurance
  11. Subawards An external or outgoing subaward is a document issued by the University that formalizes a collaborative research relationship with a third party to perform substantive sponsored project services under a Sponsored Award made to the University. Such costs are allowable as direct costs to sponsored program projects. All subawards must be made in accordance with University and sponsor regulations. The first $25,000 charged for each subaward is subject to F&A calculation and recovery.
  12. Rental of Off-Site Facilities Off-site facilities are considered to be non-UVa owned property occupied by a sponsored project. Such charges are exempt from F&A recovery. Expenditure types in this category include:
    • Rent, Buildings and Facilities
    • Rent, Land
    • Rent, Land & Buildings
  13. Alterations and Renovations Prior sponsor approval is required for this expenditure. Generally, alterations and renovations are direct costs only where they are essential to adapt existing space or utilities to accomplish the objectives of the sponsored program. The space provided must actually be occupied by the project.
  14. Patient Care Costs Prior approval is required before incurring research patient care costs. Once approved, such costs are generally limited to the amount originally provided in the sponsored award budget and sponsor permission is typically required to increase or decrease this budget line item. Research patient care costs are exempt from F&A recovery unless the indirect costs basis for the award is total direct cost (TDC). Research Patient Care Costs include the costs of routine and ancillary services provided by hospitals to individuals participating in research programs. The costs of these services normally are assigned to specific research projects through the development and application of research patient care rates or amounts. The University of Virginia Medical Center has established a rate agreement with the federal government that governs these charges. Standard of care charges – the costs associated with procedures that are not for the research study – are generally not allowed expenditures under sponsored awards and are paid by the patient or the patient’s third party insurer. Research patient care costs do not include otherwise allowable items of personal expense reimbursement, such as patient travel or subsistence, consulting physician fees, or any other direct payments related to all classes of individuals, including inpatients, outpatients, subjects, volunteers and donors costs of ancillary tests performed in facilities outside the hospital on a fee-for-service basis (e.g., in an independent, privately owned laboratory) or in an affiliated medical school/university based on an organizational fee schedule data management or statistical analysis of clinical research results. Patient care costs may be charged to the following expenditure type: Svcs, Patient Care Costs.
  15. Participant Support Costs - Participant support costs are those costs paid to (or on behalf of) participants in meetings, conferences, symposia, and workshops, when there is a category for participant support costs in the award budget. Registration fees, travel allowances, manuals and supplies, and tuition and stipends may be regarded as participant support costs in this case. Participant Support Costs should be budgeted as follows: Participant Support – Stipends Participant Support – Subsistence Participant Support – Travel Participant Support - Other NOTE: Participant support costs may not be rebudgeted into other cost categories without prior approval from the sponsor. NOTE: Participant support costs are exempt from F&A recovery unless the indirect cost basis for the award is total direct cost (TDC).
  16. Other Direct Costs Other costs not included in direct cost categories indicated above.

End of Activity