Sample policies on administrative and indirect costs
The sample policies below fall into three categories:
Category 1: Administrative and Clerical Salaries
Category 2: Direct Cost vs. Indirect Cost
Category 3: “Indirect Costs” [Facilities and Administrative Costs/F&A Costs]
Category 1: Administrative and Clerical Salaries
University of Wisconsin-Madison
This University of Wisconsin-Madison Research and Sponsored Programs FAQ page provides guidance on the direct charging of administrative and clerical salaries to federal grants under the Uniform Guidance regulations (2 CFR 200.413). The website outlines the four mandatory conditions that must be met for such charges to be appropriate: the services must be integral to the project, individuals must be specifically identifiable with the project, costs must be explicitly included in the budget or have prior written approval, and the costs cannot also be recovered as indirect costs. The FAQ format addresses practical implementation questions, including the requirement for at least 20% time allocation (roughly eight hours per week), the need for explicit budget justification language, and specific examples of projects where such charges might be considered appropriate, such as large collaborative programs, data-intensive studies, and geographically remote research sites. The website also covers modular grant applications, effort certification requirements, and the distinction between programmatic activities (which can be directly charged without prior approval) and administrative/clerical activities (which require the four conditions to be met).
This Stanford University “DoResearch” site explains federal and institutional policy and procedure to propose charging administrative expenses to sponsored research projects, with emphasis on compliance with federal Uniform Guidance regulations. The “DoResearch” site delineates the different requirements for federal versus non-federal sponsors, noting that while federal projects must meet the four criteria for direct charging of administrative and clerical salaries (integral to project, specifically identifiable, explicitly budgeted or pre-approved, and not recovered as indirect costs), non-federal sponsors typically allow more flexibility and only require that services benefit the sponsored project. Stanford University's Office of Research uses a Proposal Development and Routing Form (PDRF) that includes this question: “Is this Integral as defined by the Uniform Guidance, allowing administrative and clerical salary expenses to be charged (Federally-Funded Projects only)?” If the PI/PD answers yes, then he or she must then write a justification demonstrating the salaries are “integral.” The “DoResearch” site also addresses practical implementation issues, such as effort reporting requirements, alternatives when administrative costs don’t meet the “integral” standard, and special considerations for NIH modular grants and dean’s office activities.
The Harvard University Office for Sponsored Programs provides a concise framework for managing administrative and clerical salaries on federal awards, emphasizing the procedural and oversight mechanisms necessary for compliance with the federal Uniform Guidance regulations. Sponsored Programs clarify that administrative salaries fund non-technical supporting services such as clerical support, financial management, procurement, and personnel management. The Office reiterates the criteria from the Uniform Guidance for including administrative salaries: integral to the project, specifically and easily identified with the proposed project, identified in budget, and federal program officer approves. Harvard University’s Grant Management Administration System (GMAS) for Sponsored Programs flags for review and approval requests to charge administrative salary as direct costs. Harvard University’s resource page emphasizes the collaborative responsibility between principal investigators, department administrators, and OSP throughout the award lifecycle, particularly for any changes to administrative salary charging during project execution. The site also provides links to NSF and NIH guidelines on charging as direct costs administrative and clerical salaries.
University of Illinois Urbana-Champaign
The University of Illinois Office of Sponsored Programs provides detailed operational criteria and procedure for direct charging of administrative salaries and non-salary costs to federally sponsored research projects. OSP clarifies the criteria, rules, and texts required for review of requests to charge administrative costs as direct costs. OSP provides a matrix system that triggers Form A/CASE Committee review when budget justifications lack requisite information or sponsor approval is absent. The University of Illinois always requires the staff member be providing a minimum of 20% effort to meet the criterion that his or her work is “integral” to the proposed project. An FAQ section addresses the range of costs (administrative salaries, communication costs, equipment repairs and maintenance, office supplies, and so on) that are typically covered by indirect costs but may be charged as direct costs if criteria are met. The resource page strength lies in its granular approach to cost classification, providing concrete examples such as when satellite phones for remote fieldwork or file cabinets for extended sample storage would qualify as direct charges. OSP provides this example of a proposed project that would be eligible to charge administrative and clerical salaries as direct costs: “This is a collaborative project involving over 200 individuals from 30 institutions in 10 countries. The project involves coordination of funding from U.S. Federal government agencies, along with funding from agencies in other partner countries. Our institution will oversee seven subawards to other U.S. institutions, perform data storage and analysis, coordinate annual collaborator meetings, and manage overall project operations. We are requesting agency approval for a xx% time appointment for an administrative professional to be directly charged as an administrative cost in accordance with 2 CFR 200.413.”
Category 2: Direct Cost vs. Indirect Cost
University of Louisiana at Lafayette
The University of Louisiana’s University Research Office gives an overview of direct versus indirect cost classifications under the federal Uniform Guidance. The goal is to provide administrators and faculty with guidance on the distinctions between costs that can be specifically identified with a particular project (“direct costs”) versus those incurred for common institutional objectives (“indirect costs”). University Research’s comparison table systematically categorizes expenditures, distinguishing allowable direct costs (such as faculty salaries, project-specific research supplies, project-related travel, and long distance calls to project participants) from those that must be treated as indirect costs (routine clerical and administrative duties, general office supplies, and building and grounds maintenance). University Research notes specific exceptions that require review and approval (such as administrative and clerical salaries). Particularly valuable for faculty is the practical approach to cost classification, providing concrete examples such as when equipment qualifies as direct costs (scientific/technical/medical equipment) versus indirect costs (general office equipment like copiers and printers).
The University of Minnesota also offers a framework for charging direct costs to sponsored projects, highlighting the federal requirement that all direct costs must be allocable, allowable, and reasonable. This framework clarifies the roles and responsibilities of Principal Investigators, Certified Approvers, and Department Research Administrators in ensuring compliance. The resource addresses the complex requirements for administrative and clerical staff salaries under federal Uniform Guidance, reiterating the four mandatory conditions for direct charging: integral services, specific identification, explicit budgeting or prior approval, and no double recovery as indirect costs. It also provides concrete examples of projects that may qualify, including large multi-institutional collaborations, data-intensive studies, and geographically remote research activities. Particularly valuable for university faculty administrators and faculty, the document offers practical guidance on cost justification, requiring detailed explanations of how proposed administrative charges differ from standard project support levels and how expenses can be accurately documented and allocated. Additionally, it addresses costs related to materials and supplies, travel expenses, and computing devices, with specific criteria for direct charging. The focus on internal controls, proper documentation, and monitoring practices, along with clear warnings against unacceptable charging practices—such as rotating costs among projects or creating administrative pools to bypass regulations—makes this resource a good example of an operational guide for regulatory compliance and institutional accountability in the management of sponsored research funds.
University of Oklahoma Health Sciences
The University of Oklahoma Health Sciences Center has detailed criteria for direct charging of expenditures to sponsored projects, emphasizing the fundamental Cost Accounting Standards principles of necessity, reasonableness, allocability, and allowability under federal Uniform Guidance (2 CFR 200). This site addresses categories of expenses typically treated as facilities and administrative (F&A) costs—including administrative salaries, office supplies, postage, telephone services, computing devices, and memberships—while establishing specific criteria and justification requirements for exceptional circumstances where direct charging may be appropriate. Particularly valuable for university administrators and faculty is the Center’s practical approach to cost classification: the Center provides concrete examples, such as when administrative salaries may be directly charged (for large, complex multi-institutional projects requiring extensive coordination) versus routine activities that must remain indirect costs, and specific criteria for computing devices are essential to the project need rather than convenient or preferred by the PI/PD. The resource emphasizes consistent treatment of like costs and adequate documentation, requiring detailed budget justifications that demonstrate direct project benefit and specifically identify the cost with project objectives. Finally, the Center reinforces the principle that costs incurred for the same purpose in similar circumstances must be treated consistently across all awards to avoid potential double-charging and ensure compliance with federal regulations and institutional cost accounting practices.
University of California, San Francisco’s comprehensive Cost Accounting Standards (CAS) Guidelines provides the institutional framework for cost classification and charging practices on sponsored projects. This resource addresses the fundamental principles of allowable, reasonable, allocable, and consistently treated costs while providing detailed guidance on administrative salary charging, requiring that such costs meet the four standard federal criteria. The Guidelines also establish specific qualifying questions for budget justifications that assess whether administrative support needs exceed routine levels and can be accurately allocated to projects. Something valuable is the comprehensive treatment of non-salary administrative expenses, distinguishing between standard facilities and administrative costs (such as basic telephone services, routine postage, and office supplies) and exceptional circumstances where direct charging may be appropriate when expenses are vital to project performance and significantly exceed routine support levels. The Appendix of unallowable costs, organized by Uniform Guidance citations and specific Public Law restrictions, provides practical guidance for faculty to distinguish between unallowable expenses, allowable alternatives, and high-risk charges requiring special scrutiny. The Guidelines also address contemporary compliance issues such as award verification procedures, recharge costing practices, and institutional policies on family leave benefits.
The Massachusetts Institute of Technology Research Administration Services guidance page provides an overview of cost principles and unallowable costs for sponsored projects. The site emphasizes the four fundamental criteria that all project costs must meet under federal Uniform Guidance and Federal Acquisition Regulation (FAR): allowable, allocable, reasonable, and consistent. This reference defines each criterion with specific regulatory citations, explaining that allowable costs must be specifically related to the sponsored award and necessary for project performance, allocable costs must provide direct benefit and be specifically tied to the project, reasonable costs must reflect what a prudent person would incur under similar circumstances, and consistent costs must be treated uniformly across similar projects as either direct or indirect expenses. The site also clearly categorizes unallowable activities (such as alumni activities, organized fundraising, and lobbying) versus unallowable transactions (such as alcoholic beverages, entertainment, and first-class travel), to help faculty and administrators distinguish between expenditures that are prohibited regardless of project type versus those that may be contextually appropriate.
Category 3: “Indirect Costs” [Facilities and Administrative Costs/F&A Costs]
University of of Nebraska at Omaha
University of Nebraska at Omaha institutional policy gives a detailed definition of indirect costs and the rationale for full recovery of indirect costs. The aim is to ensure university faculty administrators and faculty understand the complexities and necessity of indirect costs, especially that these “costs provide the infrastructure, facilities, and administrative support necessary for researchers to successfully conduct sponsored projects and advance research activities at UNO.” The policy clearly articulates the University’s expectation that the full federally negotiated indirect cost rate be applied to all sponsored projects—both federal and non-federal—while
establishing a formal F&A Rate Reduction (FARR) Form process for the limited circumstances where rate reductions may be justified. For example, both federal and non-federal sponsors may have published policies limiting indirect costs or require significant cost-sharing requirements that can only be met through waiving indirect costs. The University’s Office of Research and Creative Activity requires that indirect cost reduction requests be approved before proposal finalization. To help all stakeholders collaborate in the pre-submission approval process, the Office clarifies the roles and responsibilities of principal investigators, Office of Sponsored Programs personnel, and the Associate Vice Chancellor for Research and Creative Activity.
The University of California, Davis Office of Research provides a concise yet comprehensive framework for understanding when administrative costs may be appropriately charged directly to federal awards, emphasizing the exceptional nature of such charges under OMB Uniform Guidance section 200.413(c). The document clarifies that while administrative and clerical salaries, office supplies, postage, and similar costs should normally be treated as facilities and administrative (F&A) costs, direct charging may be justified when these expenses can be closely identified with specific project objectives and demonstrate proportional benefit to the sponsored work. Particularly valuable for faculty is the practical guidance on effort thresholds, noting that while OMB has not established minimum effort requirements, budget line items of 5%-10% or less are unlikely to be considered integral to projects. Their resource page also addresses non-personnel administrative costs such as computing devices and office supplies, requiring clear demonstration that these items are essential to project fulfillment rather than matters of convenience. Finally, the UC Davis Office of Research stresses the importance of detailed budget justifications at the proposal stage as well as coordination with the Sponsored Programs Office for post-award re-budgeting decisions to check compliance with sponsor requirements.
Last updated: June 2, 2025
Compiled by Angelica Lopez, M.S. Candidate, Public Administration; Administrative Analyst Specialist, University Initiatives. Contact information: angelical@csufresno.edu
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