Office of Sponsored Programs
The Ohio State University

Allowable Costs

Communication Costs

Costs incurred for individual local and long distance telephone calls and fax transmissions are allowable as a direct charge to a project. Monthly telephone service charges are allowable as a direct charge to a project only for those projects located off campus where phone services are included as a budgeted item.

Compensation for Personal Services

Compensation for personal services covers all amounts paid currently or accrued by the institution for services of employees rendered during the period of performance under sponsored projects. Such amounts include salaries, wages, and fringe benefits. These costs are allowable to the extent the total compensation to individual employees conforms to the established policies of the institution, consistently applied, and charges for work performed directly on sponsored projects are determined and supported by government cost principles.

Salary Rates

For the Academic Year
Charges for work performed on sponsored projects by faculty members during the academic year will be based on the individual faculty member’s regular compensation for the continuous period that constitutes the basis of salary. Charges for work performed on sponsored projects during all or any portion of such period are allowable at the base salary rate. In no event will charges to sponsored projects, irrespective of the basis of computation, exceed the proportionate share of the base salary for that period. Since intra-university consulting is assumed to be undertaken as a university obligation requiring no compensation in addition to full-time base salary, the principle also applies to faculty members who function as consultants or otherwise contribute to a sponsored project conducted by another faculty member of the same institution.

In unusual cases where consultation is across departmental lines or involves a separate or remote operation, and the work performed by the consultant is in addition to his or her regular departmental load, any charges for work representing extra compensation above the base salary are allowable provided that such arrangements are specifically provided for in the sponsored agreement or approved in writing by the sponsoring agency.

For Periods Outside the Academic Year
Except as otherwise specified for teaching activity, charges for work performed by faculty members on sponsored projects during the summer months or other period not included in the base salary period will be determined for each faculty member at a rate not in excess of the base salary divided by the period to which the base salary relates. The base salary period used in computing charges for work performed during the summer months will be the number of months covered by the faculty member’s official academic year appointment.

Charges for teaching activities performed by faculty members on sponsored projects during the summer months or other periods not included in the base salary period are based on the university policy governing compensation to faculty members for teaching assignments during these periods.

Equipment and Other Facilities

The costs of permanent equipment or other facilities are allowable when such purchases are approved by the sponsoring agency or provided for by the terms of the sponsored agreement.

General Purpose Equipment or Materials
General purpose equipment means equipment, the use of which is not limited only to research, medical, scientific, or other technical activities. Some examples include office equipment and furnishings, heating and cooling units including air conditioning equipment, reproduction and printing equipment, and motor vehicles.

Unless specifically provided for in the approved project budget, internal prior approval or approval from the sponsor may be required prior to expending federal funds to acquire general purpose equipment.

Special Purpose Equipment
Special purpose equipment is generally defined as equipment that may only be used for research, medical, scientific, or other technical activities. This includes such items as microscopes and X-ray machines.

Capital expenditures for special purpose equipment are allowable as direct charges, provided that the acquisition of items having a unit cost of $5,000 or more is approved in advance by the sponsoring agency or the Office of Sponsored Programs, as appropriate.

Insurance and Indemnification
Costs of insurance required or approved and maintained, pursuant to the research agreement, are allowable.

Maintenance and Repair Costs
Costs incurred for necessary maintenance, repair, or upkeep of property purchased on sponsored projects (including government property, unless otherwise provided for) which neither add to the permanent value of the property nor appreciably prolong its intended life, but keep it in efficient operating condition, are allowable so long as the costs are directly allocable to the sponsored project(s) receiving the benefits of the costs. See the Maintenance Agreement section of this Guide for more details and documentation requirements.

Material Costs
Costs incurred for purchased materials, supplies, and fabricated parts directly related to the research agreement, are allowable. Direct material costs should include only the materials and supplies actually used for the performance of the research.

Meetings and Conference Costs
Costs of meetings and conferences are allowable when the primary purpose is the dissemination of technical information. This includes costs of meals, transportation, rental of facilities, and other items incidental to such meetings or conferences.

Membership, Subscriptions and Professional Activity Costs
Costs of the institution’s membership in business, technical, and professional organizations are allowable. Costs of the institution’s subscriptions to business, professional, and technical periodicals are allowable.

Transportation Costs
Costs incurred for freight, express, cartage, postage, and other transportation services relating either to goods purchased, in process, or delivered, are allowable.

Travel Costs
Travel costs are allowable when they are directly attributable to specific work under an agreement. The difference in cost between first-class air accommodations and less than first-class air accommodations is unallowable except when less than first-class air accommodations are not reasonably available to meet necessary mission requirements, such as when less than first-class accommodations would require circuitous routing, require travel during unreasonable hours, greatly increase the duration of the flight, result in additional costs which would offset the transportation savings, or offer accommodations that are not reasonably adequate for the medical needs of the traveler.

Foreign travel is defined as any travel outside of Canada and the United States and its territories and possessions. Foreign travel costs are generally allowable; however, if the proposed travel is not included in the approved budget from the sponsor, internal institutional prior approval or sponsor approval may be required.

Domestic travel costs are allowable. However, in instances where there is no travel budget in the sponsored agreement, internal review by your sponsored program officer, or sponsor approval, may be required. Some sponsored agreements include more stringent restrictions. For example, agreements with the State of Ohio usually restrict out-of-state travel.

Additional Information

OMB Circular A-21 – Cost Principles for Educational Institutions