Allowable and Unallowable costs on federally funded sponsored research awards are defined in OMB Circular A-21. According to OMB Circular A-21, the cost of a sponsored agreement is comprised of the allowable direct costs incident to its performance, plus the allocable portion of the allowable facility and administrative costs of the institution, less applicable credits. The tests of allowability of costs under these principles are:
The following items of cost are Unallowable according to Section J of OMB Circular A-21:
Other items of cost may be Unallowable depending on the circumstances; in these instances, the Department Grant Administrator should discuss with their OSP Grant Manager.
If an Unallowable cost is charged to a sponsored research award account, the Department Grant Administrator for that particular award needs to fill out a Cost Transfer Form (if moving non-payroll charges) or Labor Account Distribution Change & Wage Transfer Form (if moving payroll charges) to move that charge off the sponsored research award account. After the form has been filled out to move the unallowable charge off the sponsored research award account, the form needs to be reviewed and signed by the Principal Investigator or Designee, Fiscal Office and OSP before processing.
Last Updated: 9/14/09