1	UTD COSTING POLICIES FOR FEDERAL CONTRACTS & GRANTS
2	UTD COSTING POLICIES FOR FEDERAL CONTRACTS & GRANTS This chapter will provide the Principal Investigator (PI) with important financial compliance information applicable to Federal Awards. The information contained is based on the Office of Management & Budget (OMB) Circulars A-21 and A-110. The applicable provisions of these federal documents have been incorporated into the University’s policies and procedures governing the expenditures of federal funds. What are the special characteristics of Federal awards? Federal awards are governed by standardized rules and regulations which are stated in Office of Management & Budget (OMB) circulars and Federal Acquisition Regulations (FAR). Rules for the determination of allowable costs must be understood and followed. Award costs are subject to audit by federal auditors. Noncompliance with applicable provisions of federally funded contracts or grants may result in disallowed costs, negative publicity for the university, and loss of on-going collaborative relationships with funding agencies.
3	OMB CIRCULAR A-21 COST PRINCIPLES OMB Circular A-21 establishes principles for determining what costs may be charged to federal agencies’ awards for sponsored projects. These principles also apply to federal pass-throughs (federal funds which are awarded to us from another university, private business or a state agency). A-21 mandates that costs must be: Allowable under the provisions of the circular and the terms of the award. Allocable – The project which paid the expense must benefit from it. Reasonable – A “prudent person” would have paid this amount for the goods or services. The terms of a specific award take precedence over provisions of Circular A-21 if the terms of the award are more restrictive. An award cannot allow costs which are unallowable in OMB Circular A-21. OMB Circular A-21 regulations require the University to ensure that the costs of research support personnel and other supporting expenses are handled consistently across the University. Section D.1 of OMB Circular A-21 states: “Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or indirect costs. Where an institution treats a particular type of cost as a direct cost of sponsored agreements, all costs incurred for the same purpose in like circumstances shall be treated as direct costs of all activities of the institution.” The following material elaborates on direct and indirect costs and justifications for exceptions.
4	DIRECT COSTS The following costs should always be treated as direct costs when developing a budget for a specific sponsored project: Salaries of faculty, technical staff and research assistants. Laboratory supplies. Animals and animal care. Computer costs. Travel costs. Telephone Toll Charges (long distance). Specialized Service Facilities costs (including specialized shop costs). Direct charging of these costs may be accomplished through the specific identification of individual costs to sponsored project objectives which are to benefit, or through recharge centers, or specialized service facilities, as appropriate.
5	INDIRECT COSTS
6	INDIRECT COSTS RATE AT UTD
7	INDIRECT COSTS RATE AT UTD
8	HOW IS INDIRECT COSTS RATE CHARGED TO SPONSORED PROGRAMS?
9	JUSTIFICATION FOR DIRECT CHARGING OF COSTS NORMALLY INCLUDED IN THE INDIRECT COSTS POOL
10	JUSTIFICATION FOR DIRECT CHARGING OF COSTS NORMALLY INCLUDED IN THE INDIRECT COSTS POOL
11	JUSTIFICATION FOR DIRECT CHARGING OF COSTS NORMALLY INCLUDED IN THE INDIRECT COSTS POOL
12	JUSTIFICATION FOR DIRECT CHARGING OF COSTS NORMALLY INCLUDED IN THE INDIRECT COSTS POOL
13	DIRECT CHARGING OF COSTS OF NON-FEDERAL SPONSORED PROJECTS
14	DIRECT CHARGING OF COSTS OF NON-FEDERAL SPONSORED PROJECTS
15	DIRECT CHARGING OF COSTS OF NON-FEDERAL SPONSORED PROJECTS
16	RESPONSIBILITY FOR COMPLIANCE
17	MAJOR CHANGES ON PROJECT
18	COST TRANSFERS
19	MANDATORY COST SHARING
20	OTHER IMPORTANT COST CONSIDERATIONS
21	TIME AND EFFORT REPORTING
22	WHAT IS THE PRINCIPAL INVESTIGATOR’S RESPONSIBILITY FOR TIME AND EFFORT REPORTING?
23	TRAVEL
24	NEED ADDITIONAL INFORMATION?
25	SPONSORED AGREEMENTS A-21 Consistent Treatment of Costs Table