This is an important reminder concerning restricted cost categories related to federally sponsored projects.
The Uniform Guidance sets forth principles for determining costs applicable to federal grants, contracts and other agreements with educational institutions. These guidelines require the institution (i.e., the University of Iowa) to present costs consistently as either direct costs or indirect costs, prescribing whether certain costs should be treated as direct or indirect. In summary, this section of the Uniform Guidance states that the following costs should not normally be charged as direct costs to federal grants, contracts and other agreements: salaries and associated benefits of administrative and clerical staff, office supplies, local telephone costs, memberships and postage.
In order to allow these charges against federally sponsored projects at UI, the items must be included in the budget approved by the sponsoring agency. Several sponsoring agencies have also made it clear that inclusion in the budget and subsequent award by the agency does not make a cost allowable. Principal Investigators and their departments are responsible for ensuring that costs assigned to federal projects are appropriate as direct costs. Restricted cost categories and other inappropriate charges can be readily detected in audits, and resulting disallowances must be reimbursed to the federal government from departmental funds.
To view the University guidelines in their entirety, including examples where direct charging these types of costs may be appropriate, please click here.