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Direct Charging of Administrative and Clerical Salaries to Federal Awards
The following guidelines address salaries and fringe benefits of administrative and clerical staff and are based on the Uniform Guidance, 2 CFR §200.413.
The salaries of administrative and clerical staff should normally be treated as indirect (F&A) costs. To be able to direct charge administrative and clerical salaries, federal agencies require that all four of the following conditions must be met:
1. Administrative or clerical services are integral to a project or activity.
2. Individuals involved can be specifically identified with the project or activity.
3. Such costs are explicitly included in the budget or have the prior written approval of the federal awarding agency.
4. The costs are not also recovered as indirect costs.
The principal investigator is responsible for providing justification in a proposal or budget modification request that these salaries should be direct charged. The word "integral" is generally interpreted as activities that are necessary or fundamental to the project. If the proposal is accepted, and the federal agency issues the award without explicitly deleting the administrative cost, no other action by the PI is necessary. However, administrative and clerical salary expenses should be reviewed routinely through the life of the award. If the charges no longer meet all four of the conditions, they must be removed from the federal award and charged elsewhere.
Also see: Allowable Costs
The guidance for non-federal sponsors is similar, but it may be more flexible. It is important to be familiar with the program guidelines as well as terms and conditions. Sponsor terms and conditions may restrict the direct charging of administrative and clerical salaries. All other sponsor-required stipulations apply (rebudgeting, prior approval, etc.). If there are questions, please contact your SPA team for advice.
Responsibility for Compliance
PIs and their department administrators are responsible for ensuring that costs assigned to federal projects are appropriate. Restricted cost categories and other inappropriate charges can be readily detected in audits, and resulting disallowances must be reimbursed to the federal government from the funds of the responsible unit.