Uniform Guidance, 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, provides guidance to be used in determining allowable direct costs of work performed by colleges and universities under sponsored agreements. The purpose of this procedure is to provide guidance to The University of Texas at San Antonio faculty and staff to ensure compliance with Federal, State and University regulations governing the consistent treatment of direct costs to sponsored projects.
Uniform Guidance 2 CFR Part 200 describes 4 factors that can affect the allowability of a cost as it relates to sponsored projects:
- Costs must be reasonable – A cost is considered reasonable if the nature of the goods or services acquired and the amount involved reflects the action that a prudent person would have taken under the circumstances prevailing at the time the decision was made to incur the cost.
- Costs must be allocable to sponsored agreements under the principles and methods of Uniform Guidance Section 200.405 – A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with the relative benefits received.
- Costs must be treated consistently – Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect costs. Where the University treats a particular type of cost as a direct cost on sponsored agreements, all costs incurred for the same purpose in like circumstances must be treated as direct costs or all activities of the institution.
- Costs must conform to limitations or exclusions set forth in Uniform Guidance or in the sponsored agreement as to types or amounts of cost items.
Further, according to the Uniform Guidance Section 200.309 “A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in §200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity.”
Allocation: Allocation means the process of assigning a cost, or a group of costs, to one or more cost objective(s), in reasonable proportion to the benefit provided or other equitable relationship. The process may entail assigning a cost(s) directly to a final cost objective or through one or more intermediate cost objectives
Direct Cost: Those costs that can be identified specifically with a particular sponsored project, an institutional activity, or any other activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
Indirect Cost/Facilities and Administrative (F&A) Cost: Indirect (F&A) costs means those costs incurred for a common or joint purpose benefiting more than one cost objective, and not readily assignable to the cost objectives specifically benefited, without effort disproportionate to the results achieved.
Project Period: The period established in the award document during which the project begins and ends.
Principal Investigator/Project Director (PI/PD)
- Be familiar with the requirements of the sponsoring agency as well as the policies and procedures established by the university regarding direct charging of expenditures to sponsored projects.
- Review award and approved budget to ensure that costs are allowable and allocable to sponsored projects and within the project period.
- Review monthly expenditure reports.
Research Service Center (RSC) / Research Award Administrator (RAA)
- Review the proposed budget to ensure compliance with Federal, State and University regulations and the provisions of sponsored projects.
- Monitor all expenditures based on sponsor guidelines, Uniform Guidance 2 CFR Part 200, State regulations, UT System, and Institutional policies and procedures.
Office of Sponsored Project Administration
- Develop and maintain guidelines and procedures in accordance with applicable policies and regulations
- PIs should identify direct costs in the proposal budget prior to submission to the sponsoring agency.
- If an “allowable” cost benefits two or more projects or activities (mutually beneficial) in proportions that can be determined without undue effort or cost, the cost should be allocated to the projects based on the proportional benefit.
- Expenditures on sponsored projects should be routed for review through a PI’s RSC. This should be done electronically through PeopleSoft or an interim workflow solution.
- RSC RAAs will review expenditures based considering sponsor guidelines, Uniform Guidance 2 CFR Part 200, award budget, cost restrictions, project period, or UT System and Institutional policies and procedures.
- On a monthly basis, PIs (in conjunction with Department Administrators, where applicable) must review and monitor budget and expense reports for their sponsored projects and process a cost transfer request if unallowable expenditures are identified.
- Direct costs charged to sponsored projects in excess of the award amount result in a cost overrun or deficit spending. Cost overruns must be moved to a non-sponsored account.
- Cost transfers should be processed through the RSCs.