Budget Categories

Costs incurred for ordinary or normal rearrangement and alteration of facilities are not allowable. Special arrangement and alteration costs incurred specifically for the project are allowable when such work has been approved in advance by the sponsoring agency.


Consultant or lecturer fees, travel, and subsistence may generally be included in a budget, provided the particular sponsor doesn't disallow such charges. Note, though, that federal employees cannot be paid through federal grants.

Confer with UI Purchasing to request professional services performed by a consultant. A Professional Services Agreement (PSA) is used for consulting services. When you expect the consultant to be paid more than $5,000 in a year. Questions about the PSA and procurement process can be directed to UI Purchasing

Equipment is defined as any item that costs $5,000 or more and  has a useful life of more than one year. Note that computer software costing $5,000 or more is considered equipment (Section V, Chapter 12 of the University of Iowa Policy Manual).

Each major item of equipment should be described in the budget in addition to the justification for its use. Allowable items are normally those not already available for use at the University. Freight and installation costs should be included in the estimated purchase price. Maintenance contracts should be budgeted as "Other Direct Costs."

Any item of "general purpose equipment" that would normally be found in an office must be named in the budget and/or receive prior approval from the granting agency before any funds are obligated. Such items would include refrigerators, computer attachments, refrigeration or room air conditioners even though the equipment is to be used in a lab.

Please also see the information regarding Expendable Equipment and Supplies below.

The types of expendable equipment (equipment costing less than $5000) and supplies required should be indicated with estimated costs. If substantial funds are requested, there should be a breakdown of these items by general classification.

Please also see the information regarding Equipment, Permanent above.

The University of Iowa's F&A cost-reimbursement rates -- the rates for reimbursing institutional overhead and other expenses associated with sponsored projects -- are determined through extensive calculation and formal negotiation with the federal government.

F&A Rate Decision Tool - Click for a tool to determine the appropriate F&A rate to apply to agreements.

University of Iowa policy requires that applications for external funding request the maximum F&A cost-reimbursement rate possible:

  • Applications to Federal Agencies -- Must follow the federally negotiated rates outlined below unless the particular federal sponsor or solicitation specifies some other rate, in which case the applicant must request the maximum F&A reimbursement allowed by the particular sponsor/solicitation.
  • Applications to Industry and other For-Profit Entities -- Are also expected to abide by the federally negotiated rates outlined below, regardless of sponsor policy/solicitation guidelines. F&A cost waivers cannot generally be granted in relation to for-profit organizations, as such waivers mean the sponsor would not be reimbursing the University for the full cost of the project. A waiver in relation to a for-profit, then, would constitute a gift of public funds for private benefit, which is contrary to the UI mission and operations.
  • Nonprofit Organizations, such as Foundations and Societies -- Nonprofits generally don't reimburse F&A costs at the federally negotiated rates. In these cases, the UI adheres to the particular sponsor's policy, expecting the applicant to budget F&A at the maximum rate allowed by the sponsor and to provide documentation of the sponsor's published policy at routing. In cases where a nonprofit sponsor has no formal published policy on F&A cost reimbursement, the University will accept a rate of 15% of the Total Direct Costs (TDC).

To determine the F&A cost reimbursement, applicants must apply the allowable F&A cost-reimbursement rate to the budget "base." Please refer to the sponsor guidelines to determine the maximum F&A cost reimbursement rate and the base to which it applies. If unsure of the correct rate/calculation, please check with the UI Division of Sponsored Programs contact who works with the funding agency to which you are applying, or call the UI DSP office at 319-335-2123.

Federally Negotiated F&A Cost-Reimbursement Rates

Categories of Sponsored Projects
The Federally Negotiated Rate Agreement identifies four categories of projects: Organized Research, Instruction, Other Sponsored Activities, and Off-Campus.  Use the following F&A Rates for the appropriate category (see below for additional information) for budget start dates of 7/1/19 and beyond.  

Organized Research includes all externally funded research activities, both basic and applied, and all development activities. This also includes activities related to the training of individuals in research techniques (commonly called research training) where such activities utilize the same facilities as other research and development activities.

Instruction includes all teaching and training activities, except for research training, whether they are offered for credit toward a degree or certificate, on a non-credit basis, or through regular academic departments or by separate divisions, such as summer session.  Some examples of Instruction include:

  • Any project for which the purpose is to instruct any student at any location; recipients of this instruction may be UI students or staff, teachers or students in elementary or secondary schools, or the general public
  • Curriculum development projects at any level, including projects which involve evaluation of curriculum or teaching methods; such evaluation may be considered "research" only when the preponderance of activity is data collection, evaluation and reporting
  • Projects which involve UI students in community service activities for which they are receiving academic credit
  • Activities funded by awards to departments or schools for the support of students
  • General support for the writing of textbooks or reference books, video or software to be used as instructional materials.

Other Sponsored Activities include externally funded projects which involve the performance of work or activities that are not considered Organized Research or Instruction.  Some examples of Other Sponsored Activities include:

  • Support for conferences or seminars
  • Support for student participation in community service projects which do not result in academic credit
  • Support for projects pertaining to library collections, acquisitions, bibliographies or cataloging
  • Programs to enhance institutional resources
  • Demonstration projects,  (project to determine whether a specified change in policy or procedure results in increased efficiency, reduction in cost, improved delivery of services, etc.)
  • Health Service Projects that support the public
  • Community Service Programs
  • Consulting agreements
  • Fee-for-service agreements (unit provides a routine service as part of its normal business operations)

Definition of Off-Campus

The off-campus rate will apply for all activities:  a) Performed in facilities not owned by the institution and where these facility costs are not included in the F&A pools; or b) Where rent is directly allocated/charged to the project(s).  Grants or contracts will not be subject to more than one F&A cost rate.  If more than 50% of a project is performed off-campus, the off-campus rate will apply to the entire project.

The on- or off-campus determination shall be based on the UI portion of project costs and not include costs of a collaborating entity (subrecipients). "Project" refers to the grant or contract award to the University of Iowa, not including collaborating entities.

Exceptions to Federally Negotiated F&A Cost-Reimbursement Rates
There are other common types of sponsored projects that result in F&A rates that are lower than the federally negotiated rates.  The following are UI accepted reductions in the rates. For those not on this list, an F&A Rate Reduction form must be completed.

  • State of Iowa Agreements
    An 8% F&A rate is applied to State of Iowa Agreements funded solely from State of Iowa funds (i.e., there is no other funding source paying the State of Iowa for the project or program).  

    When funding flows from the prime sponsor through the State of Iowa, the University’s F&A rate applicable to that prime sponsor will apply. An example of this would be when NIH funding is issued to the State of Iowa, and the State of Iowa then issues an agreement for funding to the University of Iowa using those federal funds.
  • Corporate (industry/for profit entity) Funded Clinical Trials (CFCTs)

    CFCTs evaluate an FDA-regulated drug, device or biological product AND are either

    • Clinical investigations as defined by the FDA in 21 CFR 50.3(c);
    • Clinical investigations as defined by the FDA in 21 CFR 312.3(b);
    • Phase 1, 2, and 3 IND clinical investigations as defined by the FDA in 21 CFR 312.21;
    • Phase 4 postmarketing studies as defined by the FDA in 21 CFR 312.85;
    • Investigations as defined by the FDA in 21 CFR 812.3(h) regarding IDE studies; or
    • Postmarket surveillance as defined by the FDA in 21 CFR 822.3(i) related to medical devices. 

      The University's F&A rate for all CFCTs is 30% of total direct costs (TDC). See University Policy Manual II-27.7(d)(1). If the corporate funder insists on paying a lower F&A rate (for example, 20%), 30% will still be applied and the investigator must decide whether the research can be performed for the amount that is available for direct costs.

      Non-interventional studies, including observational, registry and retrospective chart reviews, are not considered CFCTs for purposes of the University’s F&A cost rate, unless they satisfy any bulleted item above.
  • Federally Funded Clinical Trials
    The University’s Federally Negotiated Sponsored Research rate of 55.5% MTDC (Modified Total Direct Cost) applies to all federally funded clinical trials, whether the funds are awarded directly from the sponsor or flow through an intermediary sponsor.
  • Training Grants
    Some agencies fund Training Grants to support a specific type of training program. Training Grants generally allow an F&A cost-reimbursement rate of 8%. The UI accepts this 8% rate only for programs officially designated as "Training Grants" by the granting agency and formally capped by governmental or non-profit sponsor policy.  The Training Grant rate would not normally apply to programs supported by for-profit sponsors.
  • Specific Project Purposes
    Projects under a select list of specific "purposes" are usually exempt from F&A costs. Application budgets are generally not expected to include institutional F&A cost reimbursement if the request is solely for one of the following budget categories:
    • Construction;
    • Equipment; or
    • Travel.

      This may not apply if the sponsor allows F&A on all types of costs. If that is the case and a nonprofit sponsor has no published F&A rate, then the standard 15% rate based on TDC should apply.

Bases for Calculating Facilities & Administrative Costs
Once the F&A rate is determined, it is applied against the “base.”  Similar to the rate, the base may vary according to the type of project or sponsor.  The common bases are as follows:

  • Modified Total Direct Costs (MTDC)
    The F&A rate is applied to all direct costs minus the following:
  • Equipment
  • Capital expenditures
  • Patient care costs
  • Subcontracts over $25,000
  • Student tuition remission
  • Rental costs of off-site facilities
  • Scholarships and fellowships
  • Total Direct Costs (TDC)
    The F&A rate is applied to all of the direct costs.
  • Total Direct Costs Minus Exclusions
    The F&A rate is applied to all direct costs minus specific exclusions identified by the sponsor.  For example, some sponsors may specifically only allow F&A to be applied against salaries and wages.

Additional Information on F&A Costs

Research Patient Care Costs are the costs of routine and ancillary hospital services provided to individuals participating in research programs. The costs of these services are normally budgeted into research projects according to an annually negotiated, research-specific rate. Research patient hospitalization rates should be detailed in the project budget and/or justification, indicating the number of patient days and the applicable negotiated rate. Outpatient, travel, and escort charges, if applicable, should also be detailed.

Because the guidelines for budgeting patient care costs may vary from sponsor to sponsor, it's important to review sponsor-specific guidelines to determine policy and allowability in relation to a given grant application. The National Institutes of Health, for example, addresses patient care costs within its NIH Grants Policy Statement. While the NIH policy is essential to those completing NIH applications and provides a good, general indication of the overarching federal requirements, the guidelines within the NIH policy may or may not be entirely applicable to other federal agency applications or to state or private funding sources. Therefore, applicants should always review sponsor-specific guidelines before preparing a budget.

Publication costs include the costs of printing, distribution, promotion, mailing, and general handling. Costs for typing, editing, graphics materials, tables, reprints, and other costs incurred prior to printing are not costs of publication and should be budgeted in other appropriate categories.

Other anticipated direct costs necessary for carrying out research should be itemized. Items include:

  • postage
  • long distance telephone charges
  • freight
  • machine maintenance and repair
  • service contracts
  • computer services
  • manuscript preparation
  • equipment rental
  • laundry
  • insurance (when appropriate)

Salaries and Personnel

Salaries of tenured and non-tenured faculty members and other personnel associated directly with the research constitute appropriate direct cost in proportion to the time each expects to spend on the research. Secretaries and administrative salaries are generally not allowed on government sponsored projects. The budget must include the percentage of time that will be spent on the grant in terms of nine- or twelve-month appointments and the total amount of salary to be charged to the grant. Summer support may be considered to be two-ninths or three-ninths of the academic year salary. The length of support is at the discretion of the applicant's department and college.

For research scientists, research assistants, professional assistants, and other personnel (technical, clerical, undergraduate students), the percentage of time and rate of pay indicated for each position must be listed. Salaries charged against grant funds must follow a scale consistent with the regular practices of the University. However, salaries for the initial budget period should be adjusted to provide for salary increases due to cost of living, promotion, or meeting University decompression standards for professional and scientific staff. (Fellowships are not an allowable cost on research grants.) Grants may not be used to augment the total salary or rate of salary of University faculty members.

Charging Administrative & Clerical Salaries to Grants

Uniform Guidance (see UG 200 CFR) ensures that federal funding is administered in a consistent way, outlining a set of uniform principles for budgeting and charging allowable costs to federally sponsored awards.

The salaries and benefits of administrative and clerical staff, as well as general expenses such as office supplies, postage, local telephone costs, and memberships in professional and scientific organizations, are generally not allowed as direct charges to federally sponsored awards except under special circumstances (see below). As a result, administrative and clerical salaries and benefits associated with routine services such as typing reports, filing, handling mail, making travel arrangements, answering telephones, etc., should not be budgeted or charged as direct costs, even when there is a direct benefit to the project

The government recognizes that, in some instances, the direct charging of administrative and clerical salaries may be appropriate and therefore approved by the funding agency. Examples of such projects include major, complex, multi-investigator projects such as Center Grants, Program Project Grants, and other sponsored projects that entail assembling and managing teams of investigators -- where administrative/secretarial support would be an integral part of the project itself.

Direct charging of these costs may be appropriate only if ALL of the following conditions are met:

  1. The effort of the individual must be integral to the project
    • If the services are integral, the individual would need to spend a significant amount of time- typically 15% or greater- on the activities in a given year
    • In consideration of the type of project, special circumstances might require concentrated effort on administrative tasks for a short period of time that may not equate to 15% effort in a year but are still allowable.  For example, support right before or after a conference that requires significant effort for the period of time.
  2. If the effort of the individual meets the definition as an allowable direct cost under the Uniform Guidance, no additional consideration is required.  This includes:
    • Developing and maintaining protocols (humans, animals, etc.)
    • Managing substances/chemicals
    • Managing and securing project-specific data
    • Coordinating research subjects
  3. For other administrative activities that are not normally allowed such as travel and meeting arrangements, travel reimbursements, procurement, financial tracking/management, payroll or human resources, etc., the justification must indicate that the project will require an unusual type of volume of administrative tasks.  Examples include:
    • Large, complex programs such as CTSA, research centers, etc.
    • Epidemiological studies, clinical trials, etc., that involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, search and reporting and data reduction
    • Projects that require making extensive travel and meeting arrangements for a large number of participants, such as conferences and seminars
    • Projects whose principal focus is the preparation and productions of manuals and large reports (other than routine progress and technical reports), books, and monographs
    • Projects in a remote location that is not accessible to normal departmental administrative services, such as off-campus research
    • Individual projects that require a significant amount of project-specific database management, individualized graphics, or manuscript preparation

If you have questions concerning these federal regulations, contact the Division of Sponsored Programs at  dsp@uiowa.edu or 335-2123.

Fringe benefits include such items as Social Security, University retirement programs, life insurance, health insurance, and disability insurance. These amounts vary by type of appointments according to the schedule provided by the Fringe Benefit Pool Rates. If there are questions concerning which rate to use, check with the Division of Sponsored Programs.

The University began budgeting and expending fringe benefits as a percentage of actual salary costs in grants and contracts effective July 1, 1997. Effective July 1 each year, the fringe benefit rates are adjusted, as necessary, for each employee rate pool.

Tuition remission and other forms of compensation must be consistently provided in each department, in accordance with established institutional and departmental policy, to students performing similar activities conducted in non-sponsored as well as sponsored activities. The COGS agreement establishes the minimum amount that can be charged to funding sources for tuition.  Up to 100% of the cost of full graduate tuition may be charged to a funding source including grants and contracts, in accordance with departmental policy, unless specifically prohibited by the sponsoring agency.

See current information from the Graduate College page.

It is recommended that salaries be increased at a rate of 3% per year when making future year budget estimates. This rate is consistent with the rate established by NIH and is considered an acceptable rate to most federal agencies.


The type and extent of domestic travel and its relationship to the project should be specified. Identify destinations, if possible. Allowances for air travel will not normally exceed round trip coach accommodations. Separate projected transportation expenses from housing and food costs in contract proposals. Only persons participating directly in the research may travel on grant funds.

If foreign travel is contemplated in connection with the research, the proposal should include the names of countries to be visited, along with considerable justification as to why the travel is necessary. If provision for travel to other countries is not included in the original proposal, the funding agency must be consulted prior to the commitment of grant funds for such purposes. Notification should provide evidence that the travel is essential to the objective for which the grant was awarded. Per diem rates for foreign countries are available in the Division of Sponsored Programs Office.

  1. General. Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the institution. Such costs may be charged on an actual basis, on a per diem or mileage basis in lieu of actual costs incurred, or on a combination of the two, provided the method used is applied to an entire trip and not to selected days of the trip, results in reasonable charges, and is in accordance with the institution's travel policy and practices consistently applied to all institutional travel activities.
  2. Lodging and subsistence. Costs incurred by employees and officers for travel, including costs of lodging, other subsistence, and incidental expenses, shall be considered reasonable and allowable only to the extent such costs do not exceed charges normally allowed by the institution in its regular operations as a result of an institutional policy and the amounts claimed under sponsored agreements represent reasonable and allocable costs. In the absence of an acceptable institutional policy regarding travel costs, the rates and amounts established under subchapter I of Chapter 57 of Title 5, United States Code, or by the Administrator of General Services, or the President (or his or her designee) pursuant to any provisions of such subchapter shall apply to sponsored agreements (41 U.S.C. 420).
  3. Commercial air travel. Airfare costs in excess of the lowest available commercial discount airfare, Federal Government contract airfare (where authorized and available), or customary standard (coach or equivalent) airfare, are unallowable except when such accommodations would: require circuitous routing; require travel during unreasonable hours; excessively prolong travel; greatly increase the duration of the flight; result in increased costs that would offset transportation savings; or offer accommodations not reasonably adequate for the medical needs of the traveler. Where an institution can reasonably demonstrate to the sponsoring agency either the nonavailability of discount airfare or Federal contract airfare for individual trips or, on an overall basis, that it is the institution's practice to make routine use of such airfare, specific determinations of nonavailability will generally not be questioned by the Federal Government, unless a pattern of avoidance is detected. However, in order for airfare costs in excess of the customary standard commercial airfare to be allowable, e.g., use of first-class airfare, the institution must justify and document on a case-by-case basis the applicable condition(s) set forth above.
  4. Air travel by other than commercial carrier. "Cost of travel by institution-owned, -leased, or -chartered aircraft," as used in this subsection, includes the cost of lease, charter, operation (including personnel costs), maintenance, depreciation, insurance, and other related costs. Costs of travel via institution-owned, -leased, or -chartered aircraft shall not exceed the cost of allowable commercial air travel, as provided for in subsection c.

Helpful Documents

Other anticipated direct costs necessary for carrying out research should be itemized. Items include:

  • postage
  • long distance telephone charges
  • freight
  • machine maintenance and repair
  • service contracts
  • computer services
  • manuscript preparation
  • equipment rental
  • laundry
  • insurance (when appropriate)


Federal Policy: Direct Costs

The following guidelines should be observed when preparing budget proposals or directly charging costs under federally sponsored agreements:

Administrative and Clerical Salaries and Benefits

Administrative and clerical salaries and benefits associated with routine services such as typing reports, filing, handling mail, making travel arrangements, answering telephones, etc., should not be budgeted or charged as direct costs, even when there is a direct benefit to the project.

Office Supplies

Office supplies that are normally used in the general administrative support of a project should not be included in the budget. Office supplies that are used exclusively for project-specific activities may continue to be included in the budget. Since many items of office supplies are used for both general administrative support and project-specific activities, it is important that these items, when included in the budget, be described in terms of their proposed use.

Local Telephone Costs

Local telephone rentals used to conduct routine business of the project should not be included in the budget. Telephone lines, including data lines, modems, and telephones, used to conduct surveys or to maintain contact with project activities conducted at remote locations may continue to be included in the budget.

Telephone Toll Calls

Telephone toll calls (long distance) may continue to be included in the budget. However, care must be taken to ensure that calls are directly related to project-specific activities.

Memberships in Professional and Scientific Organizations

Memberships in professional and scientific organizations may no longer be included in the budget.


Postage may be included in the budget when it is directly related to the conduct of the study, including correspondence with the sponsor and project participants. Additional postage may be included in the budget to disseminate surveys and materials produced as a result of the project activities.

When any of the above costs are included in proposal budgets, they should be explicitly justified and explained. Before any of these charges will be allowed against sponsored agreements, awards must provide evidence that the budget has sponsoring agency approval. Principal investigators and their departments are responsible for ensuring that costs assigned to federal projects are appropriate. Restricted cost categories and other inappropriate charges can be detected readily in audits, and resulting disallowances must be reimbursed to the federal government from departmental funds.