Direct costs are expense that can identified and directly attributed to a sponsored project. The most common examples of direct costs are Personnel, Equipment, Consultants, Supplies, Travel, and Subcontracts. Additional information about these categories and Bradley policies concerning them can be found below.
To be eligible as a direct cost, a cost must be (a) must be reasonable; (b) must be allocable to the sponsored project; (c) must be given consistent treatment through application of those generally accepted accounting principles appropriate to the circumstances; and (d) must conform to any limitations or exclusions set forth by the sponsor as to types or amounts of cost items.
Reasonable costs: A cost may be considered reasonable if the nature of the goods or services acquired or applied, and the amount involved therefore, reflect the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made. Considerations involved in the determination of the reasonableness of a cost are: (a) whether or not the cost is of a type generally recognized as necessary for the operation of the institution or the performance of the sponsored project; (b) whether or not the individuals concerned acted with due prudence in the circumstances, considering their responsibilities to the institution, its employees, its students, the Federal Government, and the public at large; and, (c) the extent to which the actions taken with respect to the incurrence of the cost are consistent with established institutional policies and practices applicable to the work of the institution generally, including sponsored project.
Allocable costs: A cost is allocable to a particular cost objective (i.e., a specific function, project, department, or the like) if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship. Subject to the foregoing, a cost is allocable to a sponsored agreement if (1) it is incurred solely to advance the work under the sponsored project; (2) it benefits both the sponsored project and other work of the institution, in proportions that can be approximated through use of reasonable methods, or (3) it is necessary to the overall operation of the institution and is deemed to be assignable in part to sponsored projects.
Consistent treatment of costs: The University must estimate costs in its sponsored project proposals in a manner consistent with the cost accounting practices it uses in accumulating and reporting costs. All costs incurred for the same purpose, in like circumstances, must be accounted for and handled in uniform and consistent fashion.
Compensation requested for personnel from the funding agency must be for actual time devoted to the activity.
Faculty (Senior Personnel)
Your department may consider your participation in sponsored program activities as part of your normal or reasonable faculty load, in which case your University provided salary is your compensation for sponsored program activities during the period of appointment. If your participation in such activities is considered beyond a normal load, you may seek compensation through a variety of mechanisms, as described below. When compensated for a sponsored project, the PI or PD must be in full-time residence at Bradley, unless otherwise indicated in the proposal.
- Release time from normal duties during the academic year
Release time refers to freeing part of an individual's time from regular duties to carry out the sponsored activity. Release time can be budgeted for any employee, not just faculty members. It is the mechanism by which a department and the University can be reimbursed directly for faculty and staff time devoted to externally funded sponsored projects. Prior to budgeting release time, you must contact your Department Chair for the appropriate arrangement.
There are two types of release time - that for which the sponsor pays and that for which the University pays (matching contributions). To cover the costs of instruction, the department and college share sponsor-paid release time funds.
To calculate the amount to be budgeted for your release time, you will need to determine what percentage of your time will be devoted to the activity. For example, if you are requesting to be released from one course during each semester (1/4 or 25% release time), then you need to ask for 1/4 of your academic salary in your budget. This example assumes a four-course teaching load each semester.
- Summer support
For federally funded projects, the monthly rate of compensation is 1/9 of the 9-month contract total, if you are on an "academic year" appointment, or 1/12 of the full-year contract total, if you hold a 12-month appointment. Other agencies may have different policies and in those cases the University policy on extra compensation will apply.
- Extra Compensation
See section II.B.3.b of the Faculty Handbook.
Student Research Assistants
Salaries and stipends for graduate and undergraduate student assistants must be identified in the budget. To budget for student help you need to specify: the total number of hours for the project, or the percentage of time (full or part time) for each student's pay rate, noting that salaries must be at least the federal minimum wage (hyperlink to federal minimum wage).
Students may receive stipends and tuition from a sponsored project, if the duties are in addition to their course work as students. Undergraduate students typically are not assigned work loads of over 10 hours per week during the academic year. Graduate students may be classified as full-time (20 hours) or part-time (10 hours). Graduate student assistantships generally are a combination of tuition remission and stipend. Graduate student stipends are generally set by departments or colleges, and you should budget accordingly. Contact the Graduate School for current graduate tuition rates. Depending on the sponsor guidelines and indirect cost policy, a graduate student may have to pay tuition and fees or may receive a fee waiver.
Technicians and Secretaries
Technical assistants are generally compensated on an hourly basis. If they are Bradley employees, their compensation rate is governed by the applicable University policy.
The University usually does not permit administrative or clerical salaries to be charged to a sponsored project unless the administrative or clerical staff’s responsibilities are exclusive to the sponsored project or have clearly defined responsibilities that can be readily identified and charged solely to the sponsored project.
Fringe Benefits include Social Security and Medicare (FICA), unemployment and worker's compensation insurance, retirement plan contributions, etc. Most funding agencies cover these expenses when a grant or contract includes compensation for personnel. The fringe benefit rate for full-time employees of Bradley University is 25.0% of the base portion of the employee’s salary (9 or 12 month) covered by the award. For example, if you receive a release from teaching one course during the academic year to work on a sponsored project, the funding agency would provide 12.5% of your base salary and pay the fringe benefits for that portion of your salary. The fringe benefit rate in a proposal that includes compensation for part-time employees or full-time employees receiving wages during summer or interim extra compensation periods is 10.0%. They are not calculated against undergraduate and graduate student salaries. Fringe benefits for Bradley employees cannot be waived in grant proposals where they are an allowable cost. When the funding agency does not directly provide fringe benefits, they are deducted from the employee's compensation through the award.
Each major item of equipment should be described in the budget and justified in the proposal. Equipment is defined in accordance with federal regulations (OMB A-21 Circular). To be classified as equipment, an item must meet all of the following criteria:
- have an acquisition cost of at least $1,000
- have a useful life of more than one year
- not be expended or consumed in research
- be complete in itself and retain its identity as a separate item.
Allowable equipment is equipment not already available through the University. Freight charges should be included in the purchase price of the equipment. Maintenance, lease and rental contracts, equipment repair and fabrication should be budgeted separately. If any equipment requires special space needs, maintenance and/or staffing beyond the grant period, permission for continued support for these needs must be obtained before submission of the grant. Title to equipment purchased for sponsored projects should remain with the University.
Consultants' or lecturers' expenses, including fees, travel, per diem, lodging, and other expenses while staying in Peoria on Bradley business, should be included in the budget. Consultants should be named and their organizational affiliation identified. The nature and extent of their service to the project may have to be justified in a written narrative. Federal and University regulations generally do not permit payment of consulting fees to our own employees from sponsored projects. If University faculty and staff are needed on a sponsored project, they should be considered part of the personnel budget and their salaries budgeted accordingly.
Materials and Supplies
The types of expendable equipment and supplies required should be indicated, with estimated costs. If substantial funds are required for supplies, you should offer a detailed breakdown of these items in the proposal, and give justification. Examples of items to include in this section are: Lab supplies such as chemicals, glassware, disposables, histology supplies; Office supplies, questionnaires, and test materials; Animals: including purchase, shipping, housing and maintenance; Small equipment items such as hot plates, power supplies, water baths; Materials for equipment fabrication; and/or Instructional materials.
Travel, both domestic and foreign, is often a necessary part of a sponsored project. Transportation and per diem costs should be budgeted in accordance with the University's approved travel reimbursement rates, but also take into consideration any special sponsor requirements (for example, that a US airline should be used for foreign travel if possible).
Clearly state the reasons why travel is necessary for the project. Special permission from agencies may be needed for foreign or out-of-state travel. Allowances for air travel normally will not exceed round-trip jet economy-air accommodations. In general, only people directly involved with the project may travel on grant funds. Examples of expenses to include in this section are: Attendance at professional meetings, including air fare or mileage, hotel, and per diem costs, and registration; Field work, including vehicle, mileage charges, field station fees and living expenses; Travel to sponsor-required meetings or to consult with experts; and/or Local travel for interviewers, outreach personnel.
If some part of your project must be performed by colleagues at another university or by an outside company, a subcontract will be issued for the work. (Sponsors are generally unwilling to issue two or more separate awards for the same project.)
A complete proposal (budget and technical information) should be requested from the prospective subcontractor. This proposal should be signed by an official authorized to enter into contractual agreements for the subcontractor. It may be necessary to solicit subcontract bids from several firms or organizations, including minority-owned or small business firms. If it is necessary to consider only a single source, a sole source justification may be required before the University can enter into an arrangement with that firm. The subcontract proposal will be incorporated into your proposal to the sponsor. At no time before receipt of the award should a commitment be made or implied to a subcontractor. Commitments will be negotiated with a subcontractor only after the sponsor has awarded Bradley the contract or grant.
If you are contacted by someone at another institution about being a subcontractor on a project, talk with OSP before sending a proposal to the prime contractor. Subcontract proposals are treated in exactly the same way as any other proposal to an off-campus sponsor, and the university routing procedure must be followed.
Other Direct Costs
These are costs that do not fit into any of the above categories.
Examples of such costs include:
- Publication Costs
Publication costs are not allowable as a direct cost of grants or contracts unless formally approved by the awarding agency. Costs for typing, editing, graphs, illustrations, tables, reprints, and other costs incurred prior to printing are not costs of publication and should be budgeted in other appropriate categories.
- Copying and Printing Costs
- Telephone and Fax charges
Long distance telephone costs incurred by sponsored projects should be budgeted. However, in most cases, basic monthly telephone service charges, as well as installation charges, are considered indirect costs and need not be included.
- Equipment maintenance, repair, and service contracts
- Human subject fees
- Space and equipment rental
- Machine shop charges
- Trainee or Participant Costs
Trainees have no responsibilities except their course work and education. If a trainee is supported on a sponsored project (usually intended specifically as a training program) the actual tuition and fees must be budgeted. Allowable costs include:
- Stipends and allowances
- Tuition and fees
- Project supplies