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Sponsored Programs Policies...
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Policy statement and procedures Adopted August 2008
The University will follow the restrictions and requirements of U.S. Office of Management and Budget (OMB)’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, known as Uniform Guidance and applicable federal regulations with respect to charging direct and administrative costs (F&A or indirect) to federally sponsored projects. All unallowable charges must be removed from the sponsored account.
As a recipient of federal awards, the University is obligated to comply with rules and regulations concerning the consistent treatment of direct costs and administrative (F&A or indirect) costs. The consistent treatment of expenditures, as direct or indirect costs, ensures that sponsors do not pay twice for the same type of costs. The OMB has adopted regulations from the Cost Accounting Standards Board (CASB) and applied them to educational institutions for direct and indirect charges.
The University follows guidelines provided in the Uniform Guidance and CASB’s Cost Accounting Standards for Educational Institutions to identify and account for costs, both allowable and unallowable as well as direct and indirect. Uniform Guidance provides general standards to identify allowable costs that can be charged to a sponsored agreement. (See Procedures for more detailed information.)
Uniform Guidance also requires the University to identify unallowable costs and exclude them from any application, proposal, billing or claim related to a federally sponsored agreement. Instead, they must be charged to specific expense accounts in the University’s accounting system so they can be easily distinguished from allowable costs charged to the sponsored agreement. Appendix A lists University expense accounts that must be excluded from any transactions under any federally funded agreement, while Appendix B lists and describes unallowable costs, as defined in 2 CFR §200.420-.475.
Finally, Uniform Guidance mandates that administrative costs be treated as facilities and administrative (F&A, formerly “indirect”) costs and generally should not be charged directly to awards funded by the federal government. Uniform Guidance provides guidance as to when it may be appropriate to charge administrative costs directly to federally sponsored agreements. Special care should be exercised so that costs incurred for the same purpose in “like circumstances” are treated consistently as either direct costs or F&A costs.
All direct costs must be charged in a timely manner and be:
Any expense that does not meet all of the above requirements cannot be charged to the sponsored account.
Indirect Cost Information
Definition and Examples of Direct Charging
According to Uniform Guidance, consistency means that costs incurred for the same purpose, in “like circumstances,” must be treated uniformly as either direct costs or as F&A costs. Certain types of costs (e.g., salaries of administrative and clerical staff, office supplies, postage, local telephone charges) are normally treated as F&A costs (indirect or overhead costs) and cannot be charged directly to sponsored projects unless “unlike circumstances” can be justified.
In accordance with the guidelines of Uniform Guidance, F&A costs will be considered for direct charging under the following circumstances:
The direct charging of office supplies, postage and/or telecommunications costs, substantially beyond that normally provided by the responsible administrative unit, may be approved under the following circumstances:
Notwithstanding the above guidelines, if the sponsor, the Finance Office, or University auditors disapprove the expense for any reason, then the cost must be removed from the sponsored account.
F&A or Indirect Cost Rate
The Finance Office will prepare and negotiate the F&A rate in conformance with OMB Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, known as Uniform Guidance standards. The submission will be reviewed by federal auditors and negotiated by the University with representatives of the University’s cognizant federal agency, the Department of Health and Human Services (DHHS). The current maximum Indirect Cost Rate Agreement with DHHS outlines the rate that must be incorporated into all budgets.
The University’s current maximum on-campus negotiated rate is 44% (22% off-campus) of modified total direct costs, consisting of all salaries and wages, fringe benefits, materials, supplies, services, travel and subawards up to the first $25,000 of each subaward (regardless of the period covered by the subaward). Modified total direct costs shall exclude equipment, capital expenditures, charges for patient care, student tuition remission, rental costs of off-site facilities, scholarships, and fellowships as well as the portion of each subaward in excess of $25,000. Additionally, the following cost categories are exempt from the application of the F&A rate: adaptation of equipment for accessibility, interpretation, CART, note taking, support for GU student workers, fellowship stipends, and subawards to other institutions of higher education, or other accessibility related costs. The purpose of this waiver on those cost categories is to ensure that Gallaudet is applying for federal funds on a level playing field with other institutions that are applying for those same competitively awarded funds. The agreement expires on September 30, 2023.
The Office of Sponsored Programs (OSP) is the liaison between the principal investigator (PI) and the federal sponsor. All proposals will be in compliance with Uniform Guidance.
Origination date: August 2008
Last amended date: May 2020
Next review date:
The following table lists University expense account codes related to federally unallowable costs. They must always be used to facilitate compliance with federal regulations. Account Number Account Description 5222 Travel-Departmental 5251 Vehicle Repair and Maintenance Reimbursement 5261 Vehicle Insurance/Registration 5265 Transportation-Driver Costs 5271 Miscellaneous Transport...
Guideline Type: Operations Manual
The following costs are generally unallowable on federal awards, except as noted. 2 CFR §200.420-.475 should be consulted for more detailed explanations and guidelines. The corresponding paragraph where more information can be found is provided in parentheses before each item. (§200.421) Advertising and Public Relations...
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