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Budget Categories

Reference:  Code of Federal Regulations (CFR)

CFR Title II, Grants and Agreements, Part 200, Office of Management and Budget Circulars

CFR Parts 200, 215, 220, 225, and 230 cover the topics of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The cost principles in these sections of the CFR provide the general accounting "rules" for colleges and universities. These principles define those costs that are allowable and allocable to the Federal Government. 

Entertainment Costs 

Entertainment costs cannot be requested in federal grant proposals, except where specific costs that might otherwise be considered entertainment have a programmatic purpose, per CFR 200.438.

Equipment

Equipment is defined by the UO and CFR 200.439 as any piece of tangible personal property with a unit value of $5,000 or more, a life expectancy of more than one year, and which is not consumed in the normal course of operation, unless the sponsor specifies otherwise. Equipment includes both purchase and fabrication of equipment and vessels. (see Fabrication below). Each piece of equipment should be listed on the budget with a description and cost of each item.

  • The cost to have equipment (capitalized equipment) installed or built should be included with the equipment cost.
  • Training costs related to equipment must be broken out under Other Direct Costs - training costs are expense items, not capitalized equipment.
  • Software is not considered equipment unless it is included in the purchase price of a computer. If software is listed as a separate item, it should be listed as an expendable supply, not as capitalized equipment.
  • Extended warranties on capital equipment cannot be capitalized and therefore are subject to Facilities and Administrative (F&A) Costs.
  • On Equipment Lease-Purchase:
    • only the equipment cost should be included in the budget, the department must cover the lease-purchase interest costs from department funds
  • On equipment lease (not lease-purchase), it is treated as an Other Direct Cost.
  • The modification or reconditioning of a piece of equipment outside of the original fiscal year in which it was purchased is not a capital expense and should not be budgeted as equipment. These costs should be budgeted under materials and supplies and charged full F & A costs.

Equipment Service Contracts

Equipment service contracts can be included in budgets if the equipment is also included in the budget (or in the case of continuing awards from the same sponsor). The service maintenance contract cannot be for a time past the end date of the agreement.

Fabrication of Equipment

 Definition: Supplies and minor equipment created into an identifiable unit by fabrication and meets the following criteria:

  1. Total finished value equal to or greater than $5,000 and has a useful life of greater than 1 year. The ownership or "title-to" code must be the same for the entire fabricated unit. Funding sources cannot be mixed so part of the fabricated unit is owned by the Federal Government or another outside entity and the remaining part(s) is owned by the university. Free standing, movable as an entire unit, not permanently attached to a structure, and will not lose its identity when installed in other property. Unit must be complete in itself. It will be added to, accounted for, and removed from capital inventory as one unit or record. All pieces stay together until entire unit is sent to Surplus.

    Assembled parts must be integrated, permanently attached to each other, and essential in the performance of the unit. A basic schematic diagram with a description must show how the parts are integral to the unit.

  2. A fabricated unit with all assembled parts must be physically found in one location at all times. Parts which do not meet this requirement are considered individually for capitalization.

Fabricated, assembled or constructed equipment that meets the above definition will be capitalized and added to the University of Oregon (UO) equipment inventory.

Fees and Services

These costs are for professional fees, e.g., consulting and legal fees, services rendered by commercial firms; service charges by institutional service departments; and fees assessed by other state agencies. Generally, all services must be performed within the award period. Consulting costs are normally identified separately in the budget and may also be called Personal Services Contracts (PSC). UO employees and graduate students may not be listed as consultants on UO budgets. If naming a specific individual or entity under this category, it is important to include additional detail justifying why the named individual or entity is required for your research. 

Hosting

Entertainment and Interdepartmental Refreshment costs are not an allowable budget item CFR 200.432 and CFR 200.438. However, hosting groups, guests and meals/expenditures for hosting official guests, can be directly charged to sponsored project funds when hosting a speaker or other activity is appropriate to the award per CFR 200.75 and CFR 200.432.

Maintenance and Repairs

Maintenance and repairs cover buildings, grounds, and equipment. They are intended for ordinary expenses of a recurring nature, including maintenance contracts. Outside labor charges for maintenance and repair services are included.

  • Building repairs should not be charged to research projects. These expenses are included in the Facilities and Administrative (F&A) rate.
  • Equipment maintenance costs are allowable as a direct cost for those items that are used in the project.

Any item that appears to be general purpose or that will outlast the project cannot be direct charged in most circumstances. Examples include tires and automotive batteries.

Memberships and Dues

Normally, memberships are considered to be institutional and not individual (personal). To be a direct expense, the membership must be necessary toward the goals or functions of the program. CFR 200.454 allows expenses for memberships in business, technical, and professional organizations; and forbids memberships in social or lobbying organizations.

Participant Support Costs

2 CFR §200.75   Participant Support costs:

Participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects.

2 CFR §200.456   Participant Support costs:

Participant support costs as defined in §200.75 Participant support costs are allowable with the prior approval of the Federal awarding agency.

Reference the sponsor's Request for Proposals (RFP), or Solicitation, Program Announcement, or other sponsor guidance document to determine if Participant Support costs will be applicable to the proposal budget.

Participant Support costs appropriately included in the proposal budget are exempt from indirect costs.

Some program solicitations may have special instructions for treatment of participant support.

  • Certain National Science Foundation (NSF) programs are outlined in NSF Guidance documents as requiring Participant Support costs which are exempt from indirect costs. Examples include proposals for Research Experience for Undergraduates (REU) Site, REU Supplements, and NSF-sponsored conferences, meetings, symposia, training activities and workshops
  • Certain United States Department of Education (USDE) training programs may instruct and require in an RFP or other related USDE Guidance document, that Participant Support be budgeted and exempted from indirect costs.
  • Certain National Institute of Health (NIH) training programs may instruct and require in an RFP or other related NIH Guidance document, that Participant Support be budgeted and exempted from indirect costs.
  • Fellowships:  Participant Support costs may be shown on Fellowship applications and costs are exempt from indirect costs.

Note: "Participant Support" and "Participation Incentives" are not budgeted the same way on a proposal budget. Incentives for Participation should not be budgeted under Participant Support, but should be budgeted under the "Other" section of the proposal budget accordingly. Incentives for Participation are subject to indirect costs unless strictly prohibited by the sponsor's publicly posted guidelines.

Questions about budgeting Participant Support or Participation Incentives should be directed to your SPS Sponsored Projects Administrator. If not sure who to contact, e-mail sponsoredprojects@uoregon.edu or phone 541-346-5131 for assistance.

Program Income

The federal government encourages grantees to earn program income whenever possible as a way to defray program costs. Program income may be used to meet cost sharing or matching requirements or add to the funds already committed to the grant. The University is accountable for the use of such income. Program income may come from a number of sources, both federal and non-federal; the following are typical examples:

  • Sale of publications, videos, or other items developed under an award,
  • Fees for services performed, e.g., lab analyses, diagnostic evaluations, etc.,
  • Fees from participants, e.g., workshops, training programs, etc., and
  • Fees from use or rental of property/equipment acquired with grant funds.

Program income is the gross income generated by the funded activity. The University can deduct the costs of generating program income only when specifically permitted under the federal agency's regulations or the terms of a specific award. 

Showing program income in proposal budgets:
The most important factor in correctly accounting for program income is to structure the proposal budget in a way which accurately reflects the intended use of the income:

  • To increase the amount of funds already committed to the project by the sponsor and the University (additive alternative). For research awards, the additive method will apply automatically unless the sponsoring agency indicates one of the other options in the terms and conditions of the specific award or in their regulations.
  • To reduce the University's share of the project cost (matching alternative); or
  • To reduce the total cost of the project (deductive alternative). Under the deductive method, a grantee subtracts program income from total project costs to determine the new allowable costs on which the federal share of costs is based. This is the default method for non-research activities.

The method for using program income detailed in the proposal budget must then be reflected in the award, or the default methods described above will apply. If the sponsor approves either the matching or additive alternatives in the award, the University must account for any program income in excess of the approved limits in accordance with the deductive alternative, unless the sponsor approves an increase of the limit.

Public Relations Activity

Public relations and fundraising activity costs should not be placed on sponsored project funds.

Real Property, Land

Land (real property) cannot be purchased on restricted funds without specific sponsor approval.

Rentals & Leases (Space)

Office space or buildings that are utilized for non-UO purposes are not allowed as a direct cost item or cost share item. However, if space (or buildings) is rented, and that space is used exclusively for research or programmatic uses (other than administrative), this is an allowable direct cost (F&A would not then be charged to this item). Justification and explanation of rental space usage must be included in the budget justification.

Salaries and Wages

Salaries and wages must include an itemization of all UO employees and students involved with the activity and who are either paid from the sponsor budget or who are cited for contributed effort. Additional rules apply:

  • NSF Two-Month Rule - As a general policy, NSF limits salary compensation for senior project personnel to no more than two months of their regular salary in any one year. This limit includes salary compensation received from all NSF-funded grants. This effort must be documented in accordance with the applicable cost principles. If anticipated, any compensation for such personnel in excess of two months must be disclosed in the proposal budget, justified in the budget justification, and must be specifically approved by NSF in the award.

UO faculty should generally not request more than two months' salary during any twelve-month period of NSF funded projects, unless prior approval is received from NSF.

  • Salary Caps - The National Institute of Health (NIH) has a salary cap, an amount equal to Federal Executive Pay Level I. Department of Defense (DOD) also imposes salary caps for certain programs. Budgeted salaries must conform to sponsor restrictions and salary in excess of imposed caps paid by non-federal sources.

Salaries-Clerical/Administrative Salaries
Salaries of administrative and clerical staff are normally not allowable as a budget item as they are included in the F&A rate calculation. Direct charging of administrative and clerical staff may be appropriate when all of the following conditions are met.

  1. Administrative or clerical services are integral to the project or activity;
  2. Individuals involved can be specifically identified with the project or activity;
  3. Costs are explicitly included in the budget;
  4. The costs are not also recovered as indirect costs.

Stipend Payments
Stipends are payments made to individuals for subsistence support or to defray expenses during a period of academic appointment. Stipends are periodic payments, similar to an allowance, made to an individual; normally intended for living expenses associated with participation in some phase of a funded project such as a fellowship or training grant; usually related to academic studies.
Stipend payments are not compensation for services rendered and, therefore, generally are not allowable on federal awards unless the purpose of the agreement is to provide training to selected participants and the charge is approved by the sponsoring agency (CFR 200.75).

There are, however, some instances where stipend expenses are allowable. Sponsored funds intended to support training or research training may be outlined clearly in the agency program announcement. The scope of work in the proposal and award agreements should also state explicitly that training or research training of specific individuals is a purpose of the award. In such cases, stipend expenses are expected and allowable. Typical training awards include NIH "T" and "F" awards, NASA's various fellowship programs, and NSF Doctoral Dissertation grants. Other awards where the training intention in the University of Oregon's proposal and award agreement is described clearly and accepted by the federal sponsor can also include stipend expenses.
Sponsored research funds generally reimburse the University for allowable costs of services rendered. Stipends do not reflect payments in exchange for services and they are ordinarily not allowed on sponsored research awards. If an individual is providing benefit to a project under the direction of a principal investigator, he or she should be paid as an employee receiving salary payment (a Research Assistant if a graduate student or an Employee Postdoc if a postdoctoral fellow).

Supplies

"Research supplies" are allowed when directly related to technical use on the project (e.g., research notebooks, survey forms). General office supplies (e.g., pencils, copier paper, memo pads) are not allowable budget items (these items are included in the F&A rate). In no instance should research supplies be requested to replenish an inventory (supplies purchased are to be used with the activity).

Travel

Overview

Travel costs follow the UO policies for travel. Foreign travel is eligible to use the U. S. Department of State Foreign Per Diem Rates. For UO travel rates and policies see:  http://ba.uoregon.edu/staff/travel-reimbursement
The U.S. Department of State provides information on travel advisories for foreign travelers visiting other countries.

See:  http://www.state.gov/travel/
Current Travel Warnings:  http://travel.state.gov/content/passports/english/alertswarnings.html

Foreign / International Travel
Department Grant Administrators, Principal Investigators, and/or other University staff making foreign / international travel arrangements for travelers on Federally-funded projects either directly or through a Travel Agency, must ensure at the time the travel arrangements are being made, Federal requirements are followed.  Federal requirements (i.e. Fly America Act) state that domestic grantees must use U.S. flag air carriers to the maximum extent possible. Any air transportation to, from, between or within a country other than the U.S. of persons or property paid for from U.S. federal funds must be performed by or under a code-sharing arrangement with a U.S. flag air carrier if service provided by such carrier is available. Tickets or documentation for electronic tickets must identify the US flag air carrier's designator code and flight number.

All Foreign / international travel using federal funds must be by U.S. flag air carriers if service by such a carrier is available. Cost is not a factor in determining availability. The first or last leg of travel from or to the U.S. must be by a U.S. flag air carrier in almost all instances. Business class is permitted. http://www.tvlon.com/resources/FlyAct.html