Charging Administrative Costs to Federal Awards

OMB Uniform Guidance, section 200.413(c) states that the salaries of administrative and clerical staff should normally be treated as Facilities and Administration (F&A, or indirect) costs. Salaries associated with routine services such as preparing proposals, making routine travel arrangements and typing reports should not be budgeted or charged as direct costs, even when there is a direct benefit to the project.  Similarly, items such as office supplies, postage, local telephone costs and memberships should normally be treated as F&A costs.

However, direct charging of administrative and clerical salaries and other administrative items may be appropriate when it can be demonstrated that they largely meet Uniform Guidance standards for classifying the expenses as direct costs, i.e., they can be closely identified with the project and fulfillment of its objectives.  In these cases, the related costs can be allocated to the project based on the proportional benefit as long as they are treated consistently in like circumstances.

Administrative and Clerical Effort

To charge administrative and clerical effort directly to a Federally-funded project all four of the following conditions must be met:

    • Administrative or clerical services are integral to a project or activity;
    • Individuals involved can be specifically identified with project objectives;
    • 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 indirectly (through the F&A rate).

OMB has not established a minimum (or maximum) level of project effort for an administrative or clerical employee whose salary may be direct charged. Given the concern in this area, however, the smaller the percent of effort requested, the greater the difficulty in justifying the charge. Budget line items of 5%-10% effort or less are unlikely to be regarded as integral to the project.  Likewise, the direct allocation of such modest amounts of administrative effort over multiple projects is not an indication of consistent treatment, nor that specific individuals can be clearly identified with project objectives.

Non-Personnel Administrative Costs

Whenever non-salary administrative costs are to be charged, they must be explicitly justified and explained.  The costs must be essential to the project, which creates a special or unique need for the item that is clearly different from normal circumstances.  For example:

    • Office supplies that are used exclusively for project-specific activities may be direct charged when appropriately described in terms of their proposed use.
    • Computing devices, such as laptops, may be charged if it can be clearly demonstrated that they are essential to fulfill project objectives (even if not used exclusively). Computing devices are defined as equipment that is used to acquire, store, analyze, process and publish data and other information electronically, including accessories (or peripherals) for printing, transmitting and receiving, or storing electronic information.

Procedures for Implementation

When a detailed budget is required by the Federal sponsor, requests for any of the foregoing costs must be itemized in the proposal budget and accompanied by a clear and concise justification.  Even when an agency does not call for a categorical budget, the Sponsored Programs Office strongly recommends an internal budget be provided at the pre-award stage and include a corresponding budget justification. If you are unsure whether a post-award request to re-budget into administrative cost categories may be considered internally or should be routed to the sponsor for prior written approval, feel free to reach out to the Sponsored Programs Office at [email protected] for assistance.