Direct vs. Indirect

1. Direct vs. Indirect Business and Fiscal Officers Meeting - 5/18/10 Presented by: Glen Jones, Director Post-Award Research and Sponsored Programs

2. Direct Cost Defined • “Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or F&A costs. Where an institution treats a particular type of cost as a direct cost of sponsored agreements, all costs incurred for the same purpose in like circumstances shall be treated as direct costs of all activities of the institution.”(OMB Circular A-21 D.1.) • Costs Necessary to meet the grant’s scientific and technical requirements.

3. Indirect Cost (F&A) Defined • “F&A costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.” (OMB Circular A-21 E.1.) • Costs associated with the administration of a grant.

4. Direct Costs – Salaries/Benefits • Examples of salaries directly charged to grants • Principal Investigator (PI) • Other Faculty – typically Co-PI • Research Assistant • Technician • Research Scientist • Post Doc • Graduate Research Assistant (GRA)

5. Indirect Costs – Salaries/Benefits • Examples of salaries considered to be F&A • Fiscal Officer • Administrative Assistant • Department Administrator • Accountant • Staff Assistant • Administrative Officer

6. Direct Costs - Supplies • Examples of supplies directly charged to grants • Chemicals • Gases • Radioisotopes • Computer Software (scientific & technical)

7. Indirect Costs - Supplies • Examples of supplies considered to be F&A • Pens and Pencils • Paper and Tablets • Files, Folders and Binders • Computer Software (general purpose) • General Office Supplies

8. Direct vs. Indirect – Equipment • Examples of equipment directly charged to grants • Technical & Scientific Equipment • Computer & Computer Equipment (Technical Purpose) • Examples of equipment considered to be F&A • Copier • Furniture • Computer Hardware (General Purpose)

9. Direct vs. Indirect – Telephone Charges • Examples of telephone charges directly charged to grants • Long Distance • Examples of equipment considered to be F&A • Basic Line Charges • Local Calls • Pagers and Cell Phones • Voice Mail

10. Direct vs. Indirect - Mailing • Examples of mailing costs directly charged to grants • Freight • UPS/FedEx • Priority Mail • Examples of mailing costs considered to be F&A • Postage

11. Direct vs. Indirect – Printing and Duplicating • Examples of printing costs directly charged to grants • Duplicating – technical related material • Page Charge/Reprints • Reference Material • Printing – technical materials • Examples of mailing costs considered to be F&A • Duplicating and Printing (administrative material)

12. Direct vs. Indirect – Other • Examples of Other costs that are generally considered direct • Animals and Animal Care • Recharge Center Charges • Maintenance/Repair (Scientific Equipment) • Examples of Other costs that are generally considered indirect (F&A) • Dues and Memberships • Subscriptions • Maintenance/Repair (General Purpose Equipment)

13. Direct vs. Indirect – Additional Thoughts • The previous examples are in no way comprehensive • When in doubt, please contact RSP • Costs generally considered F&A can be directly charged in some cases • Documentation is the key • Always document technical purpose on transaction