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Direct costs are defined by the federal government in Office of Management and Budget Circular A-21 as "costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy."
The following direct cost categories are typically used on most proposals.
Salaries and Wages - Starting with the principal investigator, list the names and positions of all "key" personnel.* Then list the names and positions of all support personnel. Determine the "level of effort" or other measure of time commitment to the program for each individual. Generally, salary support for administrative and clerical staff cannot be requested in a grant budget, unless the project's requirement for these personnel is much greater than the level of routine services the academic department provides.
**Time spent on proposal preparation may not be allocated to a grant as a direct cost. **
Fringe Benefits - Indicate the total amount of fringe benefits, based upon the institution's approved rate structure(s).
Separately list each item of equipment with a unit cost greater than $2,500. Always provide an adequate justification of the need for each item requested.
Describe the purpose and destination, when known, for the trip(s) and the individual(s) for whom travel funds are being requested. First class airfare is not allowed and all foreign travel using federal funds must be on US flag carriers (may be applicable to non-federal awards; ask OSP to contact sponsor for information).
Indicate the name, when known, of each consultant and itemize costs including number of days, daily rate of pay, travel, and other related costs. A letter of intent to participate in the project should be appended to the proposal. Please note that some agencies (such as NSF) have limits on daily fees.
Proposals that include consortium sites (subcontracts) must include: letter of intent to establish a consortium arrangement, signed by the consortium site's institutional official; budget; statement of work.
Items such as chemicals, electronics, and laboratory materials used in the project. On federally sponsored proposals, do not include general office supplies, such as notebooks, paper, or pens.
Itemize by category, such as publications, graphic services, photography, maintenance and service agreements, computer charges, rentals and leases, service centers, tuition/fees, and IRB fees (unlike many institutions, Dartmouth does not include IRB fees in its indirect cost proposal, hence it may be appropriate to note this in the budget justification). Photocopying, postage, and telephone costs are generally part of Dartmouth’s indirect cost recovery and should only be listed if they are intrinsic to the proposed project (i.e., extensive surveys conducted by mail or telephone).
*NIH definition: "Key personnel are defined as all individuals who contribute in a substantive way to the scientific development or execution of the project, whether or not salaries are requested. Typically, these individuals have doctoral or other professional degrees, although individuals at the masters or baccalaureate level should be included if their involvement meets the definition of key personnel."
Indirect Costs (also known as Facilities & Administrative Costs (F&A)) are defined as those costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, instructional activity, or any other institutional activity.
Indirect costs include expenses that cannot be charged directly such as lights and heat, snow removal, building maintenance, general office supplies, telephone line charges, postage, and the services of administrative offices such as OSP.
If a PI is considering any of the expenses as a direct charge to an award, s/he must provide an adequate justification in the proposal, explaining the unique requirement. If these items are not specifically and adequately identified and justified in the proposal, they will not be allowed by the College, even if the sponsor awards the budget as proposed. If, during the course of an award, these types of expenses must be charged to the grant, the situation must be discussed with OSP prior to incurring the expense.
"Any research project must cover two components of costs - those directly attributed to the project and those incurred for the general support and management of research.
...If sponsors of research projects do not fully reimburse the costs, they must be paid from other institutional funds."
-American Council on Education
Please refer to the updated institutional profile at the OSP website for current Indirect Cost Rates.
Some Costs Covered by Indirect Costs |
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General Administration Accounting |
Plant Operation & Maintenance Utilities |
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Sponsored Project Administration |
Depreciation Buildings |
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Departmental Administration Business Managers |
Library Expenses |
Generally a cost without a reasonable justification invites elimination by the sponsor. There are a variety of methods used to justify amounts requested and many sponsors require that their guidelines are followed.
See samples of simple and complex budget justifications in the appendix.
While OMB Circular A-110 defines cost-sharing or matching interchangeably as meaning "that portion of project or program costs not borne by the federal government," many institutions commonly differentiate between the two, as follows:
A further breakdown by type of cost-sharing will be tracked for all proposals and awards.
Regardless of what terminology is used, these cost-sharing/matching contributions must meet all of the following criteria in order to qualify as cost-sharing or matching under federally-funded programs or projects subject to OMB Circular A-110:
Upon receipt of an award, documentation of cost-sharing and/or matching fund is the responsibility of the OSP grant manager. The recipient department must be able to reconcile and justify this type of expense throughout the life of an award and ensure that all cost share obligations, including uncompensated time, are met.
Contact OSP/pre-award to discuss sponsor requirements (programmatically-required cost-sharing levels, budget caps, etc.) and any other cost-sharing (i.e., uncompensated effort).
Determine your level and source of cost-sharing and communicate your plan with the appropriate dean or designee.
All cost-sharing must be approved in advance by the appropriate dean or designee on the proposal routing form (signature and account number). The commitment to provide in-kind cost-sharing by other organizations should be documented in writing in a letter signed by an authorized official of the organization and attached to the proposal routing form. Please use OSP’s in-kind form, as well.
Cost-sharing above the sponsor required level promised in the proposal text, becomes mandatory cost-sharing when an award is made. Again, the Dean or designee needs to approve.
A Foundations Relations officer must approve any matching funds raised by an outside sponsor.
Negotiations between OSP and the potential sponsor are sometimes necessary, especially if the award is a contract, in order to attain terms and conditions for conduct of the project which preserve the needs of the sponsor, the College, and the investigators.
Negotiating points may involve issues such as:
Any concerns on the part of the investigator should be conveyed to OSP.
Please refer to the "Sponsored Research" chapter of the Arts & Sciences Faculty Handbook (A&S Faculty Handbook) and the OSP website for institutional policies governing some of these negotiation points. Normally, Dartmouth does not accept prohibitions on the participation of foreign nationals in sponsored research projects nor restrictions on the publication of research results.
Occasionally, proposals involving large scale or complex scopes of work will result in a site visit by the sponsor. The purpose of these site visits is to reassure the sponsor that the program will be completed successfully. These visits may occur prior to funding or during the project period. Issues involved in site visits include programmatic clarification, project timetables, staffing, reviews of financial and organizational controls, and tours of facilities. They can and often do take as many as three days to complete and require participation by faculty and administrative staff. Many agencies are substituting teleconferences for site visits to reduce costs.
Please inform OSP as soon as you have been contacted about scheduling a site visit. OSP is frequently included in these visits to provide information on the institution’s administrative structure, financial management systems, and compliance systems and it is at the center of these activities and all communications with external parties (i.e., funding agencies).
Please read sponsor guidelines carefully regarding human and animal research subject approvals. Some sponsors require institutional approval letters at the time of application submission. Many sponsors are adopting NIH's "just-in-time" mechanism for final IRB/IACUC approvals to reduce the burden on institutional boards for projects that might not be funded. Because there might be little time between notification that a proposal might be funded and the award, it is recommended to prepare the IACUC or IRB application in advance. Many sponsors will not make an award unless final IACUC or IRB approval is in hand.
Please contact the Committee for Protection of Human Subjects (CPHS) at an early stage about the status of your project in terms of human subjects. Projects involving surveys, human cells, or medical records may require IRB approval. The CPHS staff will provide advice about the level of review required (expedited, full committee, etc.) and the associated fees.
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