Tips:
- Before charging a cost directly to a sponsored project, make sure the cost can be specifically identified with that project and is allowable under the award terms and USD policies. If you are unsure whether a cost should be charged directly or treated as an indirect cost, contact Grants Accounting before making the charge.
Costs on sponsored projects are generally classified as either direct costs or indirect costs, also called Facilities and Administrative (F&A) costs.
Direct Costs
Direct costs are expenses that can be specifically identified with and assigned to a particular sponsored project. Examples may include:
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Salaries and wages for employees working on the project
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Project-specific supplies and materials
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Travel related to the project
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Equipment purchased for the project
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Participant support costs, when allowable
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Other costs that directly benefit and can be specifically identified with the project
A direct cost must be allowable, allocable, and reasonable, and must comply with the terms and conditions of the sponsored award and USD policies.
Indirect (F&A) Costs
Indirect costs are costs incurred to support sponsored projects but that cannot be readily and specifically identified with a particular project. These costs are also referred to as Facilities and Administrative (F&A) costs.
F&A costs may include expenses related to:
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Facilities and building operations
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Utilities
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Administrative support
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Accounting and financial services
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Sponsored program administration
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Other institutional infrastructure that supports sponsored research and activities
F&A costs are generally recovered through an approved F&A rate applied to the appropriate direct cost base. The applicable F&A rate and cost base are determined by the sponsored award, USD's negotiated rate agreement, and sponsor requirements.
A cost should not be charged directly to a sponsored project simply because funding is available. The cost must meet the requirements for direct charging and be appropriately supported by the project.