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1403 Charging of Administrative and Clerical Salaries and Certain Other General Administrative Expenses to Federal Funds
Director, Office of Sponsored Projects - Financial Management
Office of Sponsored Projects
November 1, 2000
June 20, 2017
This document sets forth Yale’s policy regarding the direct charging of administrative or clerical salaries and other types of general administrative expenses, usually recovered through the Facilities & Administrative (F&A) rate, to federally funded (including federal prime subawards received by Yale from another entity) sponsored projects.
Purpose of the Policy
This policy is issued to define the appropriate charging of administrative or clerical salaries and other general administrative expenses consistent with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
- Under federal regulations and sponsor requirements, general administrative expenses including but not limited to administrative or clerical salaries, office supplies, postage, local telephone costs, photocopy costs, network charges, cell phones, etc. should normally be treated as a F&A cost and recovered through the F&A cost rate (also known as indirect cost rate).
- In exceptional circumstances where the nature of the work performed requires extensive departmental support (defined as an unlike circumstance) the F&A type cost may be treated as a direct charge. However, costs such as administrative or clerical salaries and other general administrative costs must directly benefit and be easily identified with the particular sponsored project.
Principal Investigators and department administrators must ensure that the direct charging of F&A type costs must comply with sponsor requirements, University policy, and the applicable cost principles, 2 CFR Part 200.
Administrative or clerical salaries and other expenses that fall within the routine services normally provided by academic departments are treated as F&A costs. As a general rule, such routine services cover the general business of the department as a whole, and may include some limited support to faculty to enable them to conduct their teaching and scholarly activities.
General business functions include activities such as:
- basic financial management and accounting;
- human resource management;
- facilities management;
- administrative or clerical support for course instruction; and
- secretarial support for professional correspondence, preparation of grant applications.
The direct charging of administrative or clerical salaries may be appropriate where the nature of the work performed under a particular project requires an extensive amount of administrative or clerical support which is significantly greater than the routine level of such services provided by the academic department.
Examples of circumstances where the direct charging of salaries of administrative or clerical staff and other department expenses may be appropriate are as follows:
- Large complex programs, such as General Clinical Research Centers, Primate Centers, Program Projects, environmental research centers, engineering research centers, and other grants and contracts that entail assembling and managing teams of investigators from a number of institutions.
- Projects which involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, searching literature, and reporting (such as epidemiological studies, clinical trials, and retrospective clinical records studies).
- Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
- Projects whose principal focus is the preparation and production of manuals and large reports, books and monographs (excluding routine progress and technical reports).
- Projects that are geographically inaccessible to normal departmental administrative services, such as research vessels, radio astronomy projects, and other research field sites that are remote from campus.
- Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human or animal protocols; and multiple project-related investigator coordination and communications.
Additional examples might also include certain research epidemiological studies, computer science studies of large database management, clinical trials, computational biology studies, retrospective clinical records studies, and astronomical surveys.
The examples above are illustrative of the same criteria that are applied to the treatment of items such as office supplies, postage, local telephone costs, photocopying, network charges, cell phones, etc. Direct charging of such expenses may be justifiable when the expenses are related specifically to the technical substance of a project or there is an unusually high level of expense because of the nature of the activity.
The charging of administrative or clerical salaries may be appropriate only if all of the following conditions are met:
- Administrative or clerical services are integral to the particular project; meaning the services are essential to the project’s goals and objectives;
- Individuals involved can be specifically identified with the particular project;
- Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency; and
- The costs are not also recovered as indirect costs.
Care should be exercised to ensure costs incurred for the same purpose in like circumstances are treated consistently as either a direct or F&A cost. For example, salaries of technical staff, laboratory supplies, animals, animal care costs, travel costs, and specialized service center costs should be treated as direct costs whenever identifiable to a particular cost objective. Other general administrative items such as office supplies, postage, and memberships should normally be treated as F&A costs unless:
- The expenses are essential, vital, or fundamental to the project’s goals and objectives; and
- Such costs are explicitly included in the budget and budget justification or if required by the sponsor’s terms and conditions, received prior approval of the sponsor.
F&A type costs not requiring the prior approval of the sponsor must be documented via Form 1403 FR.02, by the Department Business Office and the Principal Investigator and retained in the department’s file for audit purposes.
Note: To assist in determining sponsor requirements regarding the direct charging of F&A type costs, check the Prior Approval Matrix for assistance.
Due to the unique nature of expenses recorded in ledger accounts 90001 (ITS – Telecom Infrastructure Bundle) and 90000 (ITS FTE Billing – Internal Expense) the principal investigator, department or business support unit must request and receive prior approval from OSP-Financial Management for direct charging these costs. The Telecom Infrastructure Bundle and ITS FTE Billing charges may be appropriate in limited situations such as dedicated server connection or hotline in order to accomplish the specific aims of the project(s). Except in these situations approved by OSP-Financial Management in advance, Telecom Infrastructure Bundle and ITS FTE Billing are to be treated as F&A costs and are not to be directly charged to federally sponsored awards. Consequently, as a normal course of business, these costs may no longer be included in proposal budgets to sponsoring agencies. This treatment of such costs allows for consistent recovery through the F&A rate mechanism. As required by federal regulations, costs incurred for the same purpose in like circumstances must be treated consistently as either a direct or an F&A cost.
Principal Investigators and business offices must exercise caution in applying the guidelines contained in this policy.
Roles & Responsibilities
- Consult with OSP regarding the appropriateness of including administrative and clerical salaries and other general administrative expenses in proposals.
- Provide the Department Business Office with appropriate justification for sponsor required prior approval requests.
Department Business Office
- Provide guidance and assist PIs with proposal preparation.
- Complete Form 1403 FR.02 documenting and justifying F&A type expenses on federal awards when prior approval is unnecessary.
- Ensure that all completed 1403 FR.02 forms are retained in the department’s award file for audit purposes.
Office of Sponsored Projects – Financial Administration
- Provide guidance in the interpretation of federal requirements.
- Review and approve post award prior approvals for Telecom Infrastructure costs and ITS FTE Billing.
- Assist departments in determining appropriate treatment of direct vs. F&A types of costs.
Office of Sponsored Projects – Proposal Management and Award Management
- Provide guidance and interpret federal requirements.
- Provide guidance to PIs, business managers, and/or Business Support Unit in drafting sponsored project proposals that include administrative or clerical salaries or other departmental expenses required to support the proposed project.
- Interpret sponsored project terms and conditions with respect to the appropriateness of direct charging administrative or clerical salaries and other general administrative types of costs.
- Review direct charging of F&A type of costs at the proposal stage.
- Review, approve, and submit prior approval requests to federal agencies for the direct charging of administrative and clerical salaries not included in the budget and budget justification of the original proposal or that may be identified in the award. All requests must receive the prior approval of OSP – Award Management.
Reviewed for Workday purposes 6/20/2017.