Cost considerations are critical throughout the life cycle
of a grant. An applicant's budget request is reviewed for compliance with the
governing cost principles and other requirements and policies applicable to the
type of recipient and the type of award. Any resulting award will include a
budget that is consistent with these requirements.
NIH anticipates that, because of the nature of research, the
grantee may need to modify its award budget during performance to accomplish
the award's programmatic objectives. Therefore, NIH provides some flexibility
for grantees to deviate from the award budget, depending on the deviation's
significance to the project or activity. More significant post-award changes
require NIH prior approval. Prior approval requirements and authorities are
discussed in Administrative Requirements—Changes
in Project and Budget.
During post-award administration, the GMO, or a GMO
designee, monitors expenditures for conformance with cost policies. The GMO's
monitoring includes, among other things, responding to prior approval requests
and reviewing progress reports, audit reports, and other periodic reports. The
GMO also may use audit findings as the basis for final cost adjustments (see Administrative Requirements—Closeout).
This chapter addresses the general principles underlying the allowability of costs, differentiates direct costs
from F&A costs, and highlights a number of specific costs and categories of
cost for NIH applicants and grantees. It is not intended to be all-inclusive
and should be used as a supplement to the applicable cost principles.
7.2 The Cost Principles
In general, NIH grant awards provide for reimbursement of
actual, allowable costs incurred and are subject to Federal cost principles.
The cost principles establish standards for the allowability of costs, provide detailed guidance on the cost accounting treatment of costs
as direct or F&A costs, and set forth allowability and allocability principles for selected items of cost. Applicability of a particular set of
cost principles depends on the type of organization (regardless whether
domestic or foreign) making the expenditure. For example, a for-profit
organization collaborating with a university grantee would be subject to the
cost principles for commercial organizations, while the university would be subject
to the cost principles for educational institutions.
The cost principles are set
forth in the following documents and are incorporated by reference in 45 CFR
parts 74.27 and 92.22. As noted below, OMB
Circulars A-21, A-87 and A-122 have relocated to Title 2 in the Code of
Federal Regulations (2 CFR) :
OMB Circular
A-122 (relocated to 2 CFR 230) — Cost Principles for Non-Profit
Institutions. Larger non-profit organizations that are specifically listed in
Attachment C to OMB Circular A-122 are subject to the Federal cost principles
applicable to commercial organizations (48 CFR 31.2) rather than to the
cost principles for non-profit organizations.
45
CFR 74, Appendix E — Principles for Determining Costs Applicable to
Research and Development under Grants and Contracts with Hospitals.
The cost principles apply to all NIH award instruments,
award mechanisms, and special programs and authorities, including modular
awards and awards under SNAP with one exception: they do not apply to Kirschstein-NRSA individual fellowship awards. The
allowable use of funds under those awards is included in Ruth L. Kirschstein National Research Service Awards in IIB.
Grantees may use their own accounting systems, policies, and
procedures to implement the cost principle requirements as long as they meet
the standards prescribed in 45 CFR part 74.21 or 92.20 for financial management
systems.
The cost principles address
four tests to determine the allowability of costs.
The tests are as follows:
Reasonableness (Including Necessity). A cost may be
considered reasonable if the nature of the goods or services acquired or
applied and the associated dollar amount reflect the action that a prudent
person would have taken under the circumstances prevailing when the decision to
incur the cost was made. The cost principles elaborate on this concept and
address considerations such as whether the cost is of a type generally
necessary for the organization's operations or the grant's performance, whether
the recipient complied with its established organizational policies in
incurring the cost or charge, and whether the individuals responsible for the
expenditure acted with due prudence in carrying out their responsibilities to
the Federal government and the public at large as well as to the organization.
Allocability. A cost is allocable to a specific grant, function, department, or other
component, known as a cost objective, if the goods or services involved are
chargeable or assignable to that cost objective in accordance with the relative
benefits received or other equitable relationship. A cost is allocable to a
grant if it is incurred solely in order to advance work under the grant; it
benefits both the grant and other work of the institution, including other
grant-supported projects; or it is necessary to the overall operation of the
organization and is deemed to be assignable, at least in part, to the grant. A
cost is allocable as a direct cost to a grant if it is incurred solely in order
to advance work under the grant or meets the criteria for closely related
projects determination (See Cost Considerations—Allocation
of Costs and Closely Related Work).
Consistency. Grantees must be consistent in
assigning costs to cost objectives. Costs may be charged as either direct costs
or F&A costs, depending on their identifiable benefit to a particular
project or program, but all costs must be treated consistently for all work of
the organization under similar circumstances, regardless of the source of
funding.
Conformance. This test of allowability – conformance
with limitations and exclusions as contained in the terms and conditions of
award, including those in the cost principles – varies by the type of activity,
the type of recipient, and other characteristics of individual awards. Cost Considerations—Allowability of Costs/Activities provides information
common to most NIH grants and, where appropriate, specifies some of the
distinctions if there is a different treatment based on the type of grant or
grantee. IIB contains additional information on allowability of costs for particular types of grants, grantees, and activities.
These four tests apply regardless of whether the particular
category of costs is one specified in the cost principles or one governed by
other terms and conditions of an award. These tests also apply regardless of
treatment as a direct cost or an F&A cost. The fact that a proposed cost is
awarded as requested by an applicant does not indicate a determination of allowability.
7.3 Direct Costs and Facilities and Administrative Costs
A direct cost is any cost
that can be specifically identified with a particular project, program, or
activity or that can be directly assigned to such activities relatively easily
and with a high degree of accuracy. Direct costs include, but are not limited
to, salaries, travel, equipment, and supplies directly benefiting the
grant-supported project or activity. Most organizations also incur costs for
common or joint objectives that cannot be readily identified with an individual
project, program, or organizational activity. Facilities operation and
maintenance costs, depreciation, and administrative expenses are examples of
costs that usually are treated as F&A costs. The organization is
responsible for presenting costs consistently and must not include costs
associated with its F&A rate as direct costs.
Note, the term facilities
and administrative costs and the term indirect
costs may be used interchangeably to determine applicable policies. For NIH
purposes, including the NIHGPS, these costs will be referred to as F&A
costs; however, other documents or non-NIH entities may refer to them as indirect costs.
Project costs consist of the allowable direct costs directly
related to the performance of the grant plus the allocable portion of the
allowable F&A costs of the organization, less applicable credits (as
described below and in the cost principles).
The amount NIH awards for each budget period will reflect
the total approved budget for the grant, including direct costs and, if
applicable, F&A costs. (SBIR and STTR awards also may include a fee as
specified in Grants to For-Profit
Organizations—Small Business Innovation Research and Small Business Technology
Transfer Programs in IIB.) If a grantee waives reimbursement of full
F&A costs, NIH will either not award F&A costs or will award only partial
F&A costs, as appropriate. The NIH award amount shown in the NoA constitutes NIH's maximum financial obligation to the
grantee under that award.
7.4 Reimbursement of Facilities and Administrative Costs
For grant programs that can provide F&A cost
reimbursement, NIH will generally not provide F&A costs unless the grantee
has established an F&A cost rate covering the applicable activities and
period of time, except for awards under which F&A costs are reimbursed at a
fixed rate.
In addition, NIH will not require a recipient to establish
an F&A rate if the organization's total operations consist of a single
grant-supported project or if the organization appropriately and consistently
treats all costs as direct costs to projects and accounts for them as such. In
the latter case, the GMO must be satisfied that the organization's accounting
system can adequately identify and support all costs as direct costs to the
project. This includes being able to identify and segregate costs on the basis
of a process that assigns costs commensurate with the benefits provided to
individual projects (see Administrative
Requirements—Management Systems and Procedures—Financial Management System
Standards).
F&A rates are negotiated by DCA, DFAS in the Office of
Acquisition Management and Policy, NIH (responsible for negotiating F&A
cost rates for for-profit entities receiving awards from HHS), or other agency
with cognizance for F&A cost rate (and other special rate) negotiation. If
an applicant is advised by the GMO of the need to establish a rate, the GMO
will indicate the responsible office to be contacted. If a grantee does not have a negotiated F&A rate, the use of a
temporary F&A rate, such as 10% of salaries and wages (S&W), may be
used while a rate agreement is being negotiated.
F&A cost proposals must be prepared in accordance with
the applicable cost principles and guidance provided by the cognizant office or
agency, and must conform to cost policies in the NIHGPS. Further information
concerning the establishment of F&A rates and the reimbursement of F&A
costs may be obtained from DCA or DFAS (see Part III). DCA should be consulted to determine the need to submit a
Disclosure Statement (DS-2) pursuant to the requirements of OMB Circular A-21.
Regardless of
the type of recipient, the negotiated rate(s) in effect at the beginning of the
competitive segment will be used to determine the amount budgeted for F&A
costs for each year of the competitive segment. If the rate agreement does not
extend to the end of the project period, the last rate in effect will be used
to establish the total cost commitment for any remaining future years. NIH
generally will not award additional F&A costs beyond those calculated in
the approved budget.
F&A costs awarded may be subject to upward or downward
adjustment, depending on the type of rate negotiated and grantee type.
Generally, grantees may rebudget between direct and
F&A costs (in either direction) without NIH prior approval, provided there
is no change in the scope of the approved project. F&A cost reimbursement
on grants subject to OMB Circular A-21 is based on the rates used in the award,
which are not subject to adjustment in reimbursement except for the
establishment of permanent rates when a provisional rate was used for funding.
Therefore, grantees subject to A-21 may not rebudget from direct costs to accommodate a rate increase if the F&A costs provided
for a period were based on negotiated (fixed or predetermined) rates rather
than provisional rates (defined as not "negotiated" for the application of the
OMB Circular A-21 requirement). However, for non A-21 grantees, F&A cost
reimbursement is based on the negotiated F&A rate agreement consistent with
the time period when the cost is incurred, except if F&A costs were limited
or not provided, SBIR/STTR awardees, and other grantees that have never
established a rate. F&A costs are subject to downward adjustment if the
proposal that served as the basis for the negotiation included unallowable
costs.
Some grants require negotiation of project costs annually,
e.g., clinical trials. For these
awards, the policies pertain to each year of support rather than to a multiyear
competitive segment.
Once NIH awards a grant, it is not obligated to make any
supplemental or other award for additional F&A costs or for any other
purpose. There are limited circumstances under which the GMO may award F&A
costs where none were previously awarded or may increase the amount previously
awarded. If an award does not include an amount for F&A costs because the
applicant or grantee did not submit a timely F&A cost proposal and the
grantee subsequently establishes a rate, the GMO may amend the award to provide
an appropriate amount for F&A costs if the amendment can be made using
funds from the same Federal fiscal year in which the award was made. However,
the amount will be limited to the F&A costs applicable to the period after
the date of the grantee's F&A cost proposal submission. This provision does
not affect local governmental agencies that are not required to submit their
F&A (indirect) cost proposals to the Federal government. They may charge
F&A costs to NIH grants based on the rate computations they prepare and
keep on file for subsequent Federal review.
If funds are available, a GMO
may amend an award to provide additional funds for F&A costs, but only
under the following circumstances:
NIH made an error in computing the award. This
includes situations in which a higher rate than the rate used in the grant
award is negotiated and the date of the rate agreement for the higher rate is
before 1 calendar month prior to the beginning date of the grant budget
period.
NIH restores funds previously recaptured as part
of a grantee's unobligated balance.
The grantee is eligible for additional F&A
costs associated with additional direct costs awarded for the supplementation
or extension of a project.
NIH does not reimburse indirect costs under the following classes of awards:
Fellowships. F&A costs will not be provided on Kirschstein-NRSA
individual fellowships or similar awards for which NIH funding is in the form
of fixed amounts or is determined by the normal published tuition rates of an
institution and for which the recipient is not required to account on an actual
cost basis.
Construction and Modernization. F&A costs will not be provided on construction or modernization grants.
Grants to Individuals. F&A costs will not be provided on
awards to individuals.
Grants to Federal Institutions. F&A costs will not be provided on grants to
Federal institutions.
Grants in Support of Scientific Meetings (Conference Grants). F&A costs will not
be provided under grants in support of scientific meetings.
Endowment Grants. F&A costs will not be provided for endowment grants.
NIH limits the amounts included in the F&A base for the following type of costs:
Genomic Arrays (GA) are a high-throughput genetic analysis technology which enables the study of genetic variation and gene expression at high resolution. Approaches such as genome-wide association and gene expression profiling often depend upon manufactured products known as microarrays or bead arrays. These tools are exceptional among laboratory supplies in that they are almost always procured from a commercial source; have a relatively high unit cost and are often utilized in large numbers. The treatment of the costs for purchase of GA as "supplies" in these specialized award budgets at high levels of usage would result in the application of F&A cost recovery that is disproportionate to the actual administrative burden associated with the relatively high cost of the procurement of these GA. Accordingly, for purposes of budgeting for and award of high volume purchases of GA in excess of $50,000 per year, the standard treatment of these resources as supplies in determining the F&A base of an award will be non-applicable. Instead the requested and reimbursed costs for GA will utilize as a surrogate the concept of subcontracts (consortium/contractual cost). Therefore for each budget year, the first $50,000 of GA will be treated as "supplies", and any GA in excess of $50,000 (for high volume requirements) will use as a surrogate the budgeting and reimbursement concept utilized for subcontracts (consortium/contractual cost), providing consistent budgeting, accounting and reimbursement of these costs.
NIH provides F&A costs without the need for a negotiated rate under the following classes of awards:
Research Training and Education Grants (e.g., R25), and K Awards. F&A costs under Kirschstein-NRSA institutional research training
grants and K awards will be budgeted and reimbursed at a rate of 8 percent of modified
total direct costs, exclusive of tuition and fees, health insurance (when
awarded as part of tuition and fees), expenditures for equipment, and
consortiums in excess of $25,000. State, local, and Indian tribal governmental
agencies may receive full F&A cost reimbursement under NIH Kirschstein-NRSA institutional research training grants and
K awards. For this policy, State universities or hospitals are not considered
governmental agencies.
Grants to Foreign Institutions and International Organizations. With the exception of
the American University of Beirut and the World Health Organization, which are
eligible for full F&A cost reimbursement, F&A costs under grants to
foreign and international organizations will be funded at a rate of 8 percent
of modified total direct costs, exclusive of expenditures for equipment. NIH
provides F&A costs under these grants to support the costs of compliance
with applicable public policy requirements including, but not limited to, the
protection of human subjects, animal welfare, financial conflict of interest, and
invention reporting. NIH will not support the acquisition of or provide for
depreciation on any capital expenses (facilities) or the normal general
operations of foreign and international organizations. Awards to domestic
organizations with a foreign or international consortium participant may
include 8 percent of modified total direct costs, less equipment, for the
consortium.
7.5 Cost Transfers, Overruns, and Accelerated and Delayed Expenditures
Cost transfers to NIH grants by grantees, consortium
participants, or contractors under grants that represent corrections of
clerical or bookkeeping errors should be accomplished within 90 days of when
the error was discovered. The transfers must be supported by documentation that
fully explains how the error occurred and a certification of the correctness of
the new charge by a responsible organizational official of the grantee,
consortium participant, or contractor. An explanation merely stating that the
transfer was made "to correct error" or "to transfer to correct project" is not
sufficient. Transfers of costs from one project to another or from one
competitive segment to the next solely to cover cost overruns are not
allowable.
Grantees must maintain documentation of cost transfers,
pursuant to 45 CFR part 74.53 or 92.42, and must make it available for audit or
other review (see Administrative
Requirements—Monitoring—Record Retention and Access). The grantee should
have systems in place to detect such errors within a reasonable time frame;
untimely discovery of errors could be an indication of poor internal controls.
Frequent errors in recording costs may indicate the need for accounting system
improvements, enhanced internal controls, or both. If such errors occur, grantees
are encouraged to evaluate the need for improvements and to make whatever
improvements are deemed necessary to prevent reoccurrence. NIH also may require
a grantee to take corrective action by imposing additional terms and conditions
on an award(s).
The GMO monitors grantee expenditure rates under individual
grants within each budget period and within the overall project period. The
funding that NIH provides for each budget period is based on an assessment of
the effort to be performed during that period and the grantee's associated
budget, including the availability of unobligated balances. Although NIH allows
grantees certain flexibilities with respect to rebudgeting (see Administrative Requirements—Changes in
Project and Budget), NIH expects the rate and types of expenditures to be
consistent with the approved project and budget and may question or restrict
expenditures that appear inconsistent with these expectations.
The GMO may review grantee cash drawdowns to determine whether they indicate any pattern of accelerated or delayed
expenditures. Expenditure patterns are of
particular concern because they may indicate a deficiency in the grantee’s
financial management system or internal controls. Accelerated or delayed
expenditures may result in a grantee's inability to complete the approved
project within the approved budget and period of performance. In these
situations, the GMO may seek additional information from the grantee and may
make any necessary and appropriate adjustments.
7.6 Allocation of Costs and Closely Related Work
When salaries or other activities are supported by two or
more sources, issues arise as to how the direct costs should be allocated among
the sources of support. In general, a cost that benefits two or more projects
or activities in proportions that can be determined without undue effort or
cost should be allocated to the projects on the basis of the proportional
benefit. A cost that benefits two or more projects or activities in proportions
that cannot be determined because of the interrelationship of the work involved
may be allocated or transferred to the benefiting projects on any reasonable
basis as long as the costs charged are allowable, allocable, and reasonable
under the applicable cost principles and the grantee’s financial management
system includes adequate internal controls (for example, no one person has
complete control over all aspects of a financial transaction).
7.7 Applicable Credits
The term applicable credits refers to those receipt or negative expenditure types of transactions that
operate to offset or reduce direct or F&A cost
items. Typical examples are purchase discounts, rebates or allowances,
recoveries or indemnities on losses, and adjustments for overpayments or
erroneous charges. Additional information concerning applicable credits is
included in the cost principles.
A number of universities and other organizations have
established closely affiliated, but separately incorporated, organizations to
facilitate the administration of research and other programs supported by
Federal funds. Such legally independent entities are often referred to as
"foundations," although this term does not necessarily appear in the name of
the organization. Sometimes, the parent organization provides considerable
support services, in the form of administration, facilities, equipment,
accounting, and other services, to its foundation, and the latter, acting in
its own right as an NIH grantee, includes the cost of these services in its
F&A proposal.
Costs incurred by an
affiliated, but separate, legal entity in support of a grantee foundation are
allowable for reimbursement under NIH grants only if at least one of the
following conditions is met:
The affiliated organization is charged for, and
is legally obligated to pay for, the services provided by the parent
organization.
The affiliated organizations are subject to
State or local law that prescribes how Federal reimbursement for the costs of
the parent organization's services will be expended and requires that a State
or local official acting in his or her official capacity approves such
expenditures.
There is a valid written agreement between the
affiliated organizations whereby the parent organization agrees that the
grantee foundation may retain Federal reimbursement of parent organization
costs. The parent organization may either direct how the funds will be used or
permit the grantee foundation that discretion.
If none of the above conditions are met, the costs of the
services provided by the parent organization to the grantee foundation are not
allowable for reimbursement under an NIH grant. However, the services may be
acceptable for cost-sharing (matching) purposes.
Foundations that represent already existing grantee
organizations should contact DGP, OPERA before attempting to
become a separately recognized applicant organization.
7.9 Allowability of Costs/Activities
The governing cost principles address selected items of
cost, some of which are mentioned in this section for emphasis. This section is
not intended to be all-inclusive. The cost principles should be consulted for
the complete explanation of the allowability or unallowability of costs.
This section also includes NIH-specific requirements
concerning costs and activities. The allowability of
costs under specific NIH awards may be subject to other requirements specified
in the program legislation, regulations, or the specific terms and conditions
of an award, which take precedence over the general discussion provided here.
Specific program requirement may also be covered in other sections of the NIH
GPS. Applicants or grantees that have questions concerning the allowability of particular costs should contact the GMO.
If a cost is allowable, it is allocable as either a direct
cost or an F&A cost, depending on the grantee's accounting system. For some
costs addressed in this section, the text specifies whether the cost is usually
a direct cost or an F&A cost.
Unless otherwise indicated in the NoA,
an award based on an application that includes specific information concerning
any costs or activities that require NIH prior approval constitutes the prior
approval for those costs or activities. The grantee is not required to obtain
any additional approval for those costs/activities. Post-award requests to
incur costs or undertake activities requiring prior approval that are not
described in the approved application are subject to the requirements in Administrative Requirements—Changes in Project and
Budget.
Consortium participants and contractors under grants are
subject to the requirements of the cost principles otherwise applicable to
their type of organization and to any requirements placed on them by the
grantee to be able to comply with the terms and conditions of the NIH grant.
The cost principles do not address profit or fee. NIH policy
allows the payment of fee on SBIR/STTR grants (see Grants to For-Profit Organizations chapter in
IIB) but NIH will not provide profit or fee to any other type of recipient
under any other grant program or support mechanism. A fee may not be paid by a
grantee to a consortium participant, including a for-profit organization.
However, a fee (profit) may be paid to a contractor providing routine goods or
services under a grant in accordance with normal commercial practice.
7.9.1 Selected Items of Cost
Exhibit 5: Selected Items of Cost The table presents specific items that may or may not be included in the cost portion of grants.
Items
Explanation of Allowable Costs
Advertising
Allowable only for recruitment of staff, trainees, or
study participants; procurement of goods and services; disposal of scrap or
surplus materials; and, other specific purposes necessary to meet the
requirements of the grant-supported project or activity.
Alcoholic Beverages
Unallowable as an entertainment expense, but allowable if
within the scope of an approved research project.
Alteration and Renovation
Individual A&R projects that are treated as direct
costs and that will not exceed $500,000 will be subject to the A&R
policies specified in this exhibit and in the Construction Grants chapter, as applicable. Individual A&R projects exceeding $500,000 in
direct costs will be subject to the requirements specified in the Construction Grants chapter.
Routine maintenance and repair of the organization's
physical plant or equipment, which is allowable and is ordinarily treated as
an F&A cost, is not considered A&R for purposes of applying this
policy. Certain allowable costs of installing equipment, such as the
temporary removal and replacement of wall sections and door frames to place
equipment in its permanent location, or the costs of connecting utility
lines, replacing finishes and furnishings, and installing any accessory
devices required for the equipment's proper and safe utilization, may be
considered either equipment costs or A&R costs, depending on the grantee's
accounting system.
A&R costs are not allowable under grants to
individuals, and grants in support of
scientific meetings (conference grants). In all other cases, these costs are
allowable unless the program legislation, implementing regulations, program
guidelines, or other terms and conditions of the award specifically exclude
such activity.
The A&R must be consistent with the following criteria
and documentation requirements:
The building has a useful life consistent with
program purposes and is architecturally and structurally suitable for
conversion to the type of space required.
The A&R is essential to the purpose of the
grant-supported project.
The space involved will be occupied by the
project.
The space is suitable for human occupancy
before A&R work is started except where the purpose of the A&R is to
make the space suitable for some purpose other than human occupancy, such as
storage.
If the space is rented, evidence is provided
that the terms of the lease are compatible with the A&R proposed and
cover the duration of the project period.
If the A&R will affect a site listed in
(or eligible for inclusion in) the National Register of Historic Places, the
requirements specified in "Preservation of Cultural and Historic Resources"
have been followed.
Work necessary to obtain an initial occupancy permit for
the intended use is not an allowable A&R cost.
A grantee may rebudget up to 25
percent of the total approved budget for a budget period into A&R costs
without NIH prior approval unless such rebudgeting would result in a change in scope. If the rebudgeting will result in an A&R project exceeding $500,000, NIH will consider the rebudgeting to be a change in scope, and the grantee must
submit to the NIH awarding IC the documentation specified in the Construction Grants chapter for prior approval of A&R projects above that dollar level.
Under foreign grants or foreign components under domestic
grants, major A&R (>$500,000) is unallowable. Minor A&R
(<$500,000) is generally allowable on grants made to foreign organizations
or to the foreign component of a domestic grant, unless prohibited by the
governing statute or implementing program regulations.
Allowable for the production of an audiovisual.
"Audiovisual" means any product containing visual imagery, sound, or both,
such as motion pictures, films, videotapes, live or recorded radio or
television programs or public service announcements, slide shows, filmstrips,
audio recordings, multimedia presentations, or exhibits where visual imagery,
sound, or both are an integral part. "Production" refers to the steps and
techniques used to create a finished audiovisual product including, but not
limited to, design, layout, scriptwriting, filming or taping, fabrication,
sound recording, and editing.
A recipient with in-house production capability must
determine whether it would be more efficient and economical to use that
capability or to contract for the production of an audiovisual.
If an audiovisual intended for members of the general public
(i.e., people who are not researchers or health professions personnel or who
are not directly involved in project activities as employees, trainees, or
participants such as volunteers or patients) is produced under an NIH
grant-supported project, the grantee must submit two copies of the finished
product along with its annual or final progress report (see Administrative
Requirements—Monitoring—Reporting and Administrative Requirements—Closeout).
The costs of such copies are allowable project costs.
Audiovisuals produced under an NIH grant-supported project
must bear an acknowledgment and disclaimer, such as the following:
The production of this [type of audiovisual (motion picture, television program,
etc.)] was supported by Grant No.____________ from [name of NIH awarding IC].
Its contents are solely the responsibility of [name of grantee organization]
and do not necessarily represent the official views of [name of NIH awarding
IC].
Audit Costs
Allowable (see Administrative Requirements—Monitoring—Audit and section 230 of OMB Circular A-133). The charges may be treated as a
direct cost when the audit's scope is limited to a single NIH grant-supported
project or program, as specified in
45 CFR 74.26(d), or when it includes more than one project but the costs can
be specifically identified with, and allocated to, each project on a
proportional basis, and this practice is followed consistently by the
grantee. Otherwise, charges for audits should be treated as F&A costs.
Bad Debts
Unallowable.
Bid and Contract Proposal Costs
Allowable as an F&A cost. See 45 CFR 74.28(b)(1) for
policy for non-profit organizations covered by OMB Circular A-122.
Bonding
Allowable. See 45 CFR parts 74.21, 74.47(c) and 92.36 for
policies and requirements concerning bonding.
Books and Journals
Allowable. If an organization has a library, books and
journals generally should be provided as part of normal library services and
treated as F&A costs.
Building Acquisition
Unallowable unless building acquisition or construction is
specifically authorized by program legislation and is provided for in the NoA. For real property acquired with NIH grant support,
the cost of title insurance may be charged to the grant in proportion to
the Federal share of the acquisition cost. Filing fees for recording the
Federal interest in the real property in appropriate records of the
applicable jurisdiction also may be charged to the grant. (Also see Construction
Grants—Allowable and Unallowable Costs and Activities in IIB.)
Child Care Costs
Allowable if incurred to assist individuals to participate
as subjects in research projects. Such costs also may be allowable as a
fringe benefit for individuals working on a grant-supported project (see Fringe Benefits in this exhibit).
Communications
Allowable. Such costs include local and long-distance
telephone calls, telegrams, express mail, and postage, and usually are
treated as F&A costs.
Allowable only when program legislation specifically
authorizes new construction, modernization, or major A&R, and NIH
specifically authorizes such costs in the NoA. When
authorized, construction activities may include construction of a new
facility or projects in an existing building that are considered to be
construction, such as relocation of exterior walls, roofs, and floors;
attachment of fire escapes; or completion of unfinished shell space to make
it suitable for human occupancy (see Construction Grants chapter in IIB).
Consultant Services
Allowable. A consultant is an individual retained to
provide professional advice or services for a fee but usually not as an
employee of the requiring organization. The term consultant also includes a firm that provides paid professional advice or services.
Grantees must have written policies governing their use of consultants that
are consistently applied regardless of the source of support. Such policies
should include the conditions for paying consulting fees. The general
circumstances of allowability of these costs, which
may include fees and travel and subsistence costs, are addressed in the
applicable cost principles under "professional services costs."
In unusual situations, a person may be both a consultant
and an employee of the same party, receiving compensation for some services
as a consultant and for other work as a salaried employee as long as those
separate services are not related to the same project and are not charged to
the same project. For example, consulting fees that are paid by an
educational institution to a salaried faculty member as extra compensation
above that individual's base salary are allowable, provided the 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 workload.
Grantees, consortium participants, and contractors under
grants that want to be able to charge employee consulting costs to
grant-supported projects must establish written guidelines permitting such
payments regardless of the source of funding and indicating the conditions
under which the payment of consulting fees to employees is proper. Unless
subject to OMB Circular A-21, the grantee, consortium participant, or
contractor also must document that it would be inappropriate or infeasible to
compensate the individual for those services through payment of additional
salary. Under no circumstances may an individual be paid as a consultant and
an employee under the same NIH grant.
Authorization for consulting fees paid to individuals
serving as both employees and consultants of the same party must be
documented in writing, on a case-by-case basis, by the head of the
organization (or his/her designee) incurring the costs – i.e., the recipient
organization, consortium participant, or contractor. If the designee is
personally involved in the project, the authorization may be given only by
the head of the recipient organization, consortium participant, or
contractor. This authorization must include a determination that the required
conditions are present and that there is no apparent or actual conflict of
interest.
Grantees, consortium participants, and contractors under
grants are encouraged to obtain written reports from consultants unless such
a report is not feasible given the nature of the consultation or would not be
useful. Documentation maintained by the receiving organization should include
the name of the consulting firm or individual consultant; the nature of the
services rendered and their relevance to the grant-supported activities, if
not otherwise apparent from the nature of the services; the period of
service; the basis for calculating the fee paid (e.g., rate per day or hour
worked or rate per unit of service rendered); and the amount paid. This
information may be included in the consultant's invoice, in the report, or in
another document.
Unallowable. Contributions set aside for events whose
occurrence cannot be foretold with certainty as to time, intensity, or
assurance of their happening are unallowable under non-construction grants.
Contingency funds do not include pension funds, self-insurance funds, and
normal accruals (also see Reserve Funds in this
exhibit). (See also Construction
Grants—Allowable and Unallowable Costs and Activities in IIB
concerning contingency funds under construction grants.)
Customs and Import Duties
Allowable under grants to domestic organizations when
performance will take place entirely within the United States, its
possessions, or its territories, or when foreign involvement in the project
is incidental to the overall grant-supported project. Charges may include
consular fees, customs surtaxes, value-added taxes, and other related
charges. Consular fees, customs surtaxes, value-added taxes and other related
charges are unallowable on foreign grants or the foreign component of a
domestic grant. (See also Grants
to Foreign Institutions, International Organizations, and Domestic Grants
with Foreign Components—Allowable and Unallowable Costs in IIB for
the allowability of these costs.)
Depreciation or Use Allowances
Allowable. Such costs usually are treated as F&A
costs. Depreciation or use charges on equipment or buildings acquired under a
federally supported project are not allowable.
Donor Costs
Allowable as payment to volunteers or research subjects
who contribute blood, urine samples, and other body fluids or tissues that
are specifically project-related. Donor costs are not considered a research
patient care expense (see the Research
Patient Care Costs chapter in IIB). Also see Incentive Costs in this exhibit.
Drugs
Allowable if within the scope of an approved research
project.
Project funds may not be used to purchase drugs classified
by FDA as "ineffective" or "possibly effective" except in approved clinical
research projects or in cases where there is no alternative other than therapy
with "possibly effective" drugs.
Dues or Membership Fees
Allowable as an F&A cost for organizational membership
in business, professional, or technical organizations or societies.
Payment of dues or membership fees for an individual’s
membership in a professional or technical organization is allowable as a
fringe benefit or an employee development cost, if paid according to an
established organizational policy consistently applied regardless of the
source of funds.
Entertainment Costs
Unallowable. This includes the cost of amusements, social
activities, and related incidental costs.
Equipment
Allowable for purchase of new, used, or replacement
equipment as a direct cost or as part of F&A costs, depending on the
intended use of the equipment. NIH prior approval may be required as
specified in Administrative
Requirements—Changes in Project and Budget.
Office equipment (copiers, laptops, desktop computers,
personal handheld computers, fax machines, scanners, etc.) that is used for
general office purposes (rather than justified as a specific research
purpose) are not allowable as direct costs; they are allowable as an F&A
cost.
Funds provided under a conference grant may not be used to
purchase equipment.
Unallowable except when resulting from violations of, or
failure of the organization to comply with, Federal, State, or local laws and
regulations and incurred as a result of compliance with specific provisions
of an award, or when such payments are authorized in advance in writing by
the NIH awarding IC.
Fringe Benefits
Allowable as part of overall compensation to employees in
proportion to the amount of time or effort employees devote to the
grant-supported project, provided such costs are incurred under formally
established and consistently applied policies of the organization (see Salaries and Wages in this exhibit).
Unallowable when the primary intent is to confer
distinction on, or to symbolize respect, esteem, or admiration for, the
recipient of the honorarium. A payment for services rendered, such as a
speaker's fee under a conference grant, is allowable.
Incentive
payments to volunteers or patients participating in a grant-supported project
or program are allowable. Incentive payments to individuals to motivate them
to take advantage of grant-supported health care or other services are allowable if within the
scope of an approved project. See Salaries and Wages/Bonus Funds & Incentives in this exhibit for incentive payments to employees.
Indemnification
Absent express statutory authority, unallowable if the
indemnification would result in liability that is indefinite, indeterminate
or potentially unlimited. In those rare cases where authority does allow this
cost, it would be reflected in the NoA.
Independent Research and Development Costs
Unallowable, including their proportionate share of
F&A costs.
Insurance
Allowable. Insurance usually is treated as an F&A
cost. In certain situations, however, where special insurance is required as
a condition of the grant because of risks peculiar to the project, the
premium may be charged as a direct cost if doing so is consistent with
organizational policy. Medical liability (malpractice) insurance is an
allowable cost of research programs at educational institutions only if the
research involves human subjects. If so, the insurance should be treated as a
direct cost and assigned to individual grants based on the manner in which
the insurer allocates the risk to the population covered by the insurance.
The cost of insuring equipment, whether purchased with
project funds or furnished as federally owned property, normally should be
included in F&A costs but may be allowable as a direct cost if this
manner of charging is the normal organizational policy.
Unallowable as a direct cost unless specifically
authorized on the grant award. May be allowable as F&A costs, provided
they are authorized under applicable cost principles and are included in the
negotiation of F&A cost rates. Such costs include licensing or option
fees, attorney's fees for preparing or submitting patent application, patent
maintenance, or recordation of patent-related information.
IRB or IACUC Costs
Costs associated with IRB review of human research
protocols, or IACUC review of animal research protocols, are not allowable as
direct charges to NIH-funded research unless such costs are not covered by
the organization's F&A rate.
Laboratory Directed Research & Development
NIH awards to DOE laboratories will not include the
proportionate share of F&A costs for Laboratory Directed Research &
Development (LDRD) in accordance with the MOU with the Department of Energy
dated June 18, 1998, although the NIH will not restrict the DOE laboratory
contractors from recovering LDRD costs within the total funding included in
an award. In addition, DOE has agreed to waive the Overhead Rate on all NIH
grant awards to DOE laboratory contractors.
Allowable. Generally treated as an F&A cost but,
subject to the limitations described in the applicable cost principles, may
be treated as a direct cost for legal services provided by individuals who
are not employees of the grantee organization. Before a grantee incurs legal
costs that are extraordinary or unusual in nature, the grantee should make an
advance agreement regarding the appropriateness and reasonableness of such
costs with the GMO.
Legal costs incurred in defending or prosecuting claims,
whether equitable or monetary, including administrative grant appeals, are
unallowable charges to NIH grant-supported projects, except as provided in
the applicable cost principles.
Library Services
General library support is not allowable as a direct cost
but may be included in the grantee's F&A pool. However, such services are
allowable as a direct cost when specifically required for the conduct of the
project and when identifiable as an integral part of the grant-supported
activity (e.g., in those programs designed to develop and support such
services).
Lobbying
Generally unallowable, including costs of lobbying
activities to influence the introduction, enactment, or modification of
legislation by the U.S. Congress or a State legislature. Under certain
circumstances, as provided in the applicable cost principles, costs
associated with activities that might otherwise be considered "lobbying" that
are directly related to the performance of a grant may be allowable. The
grantee should obtain an advance understanding with the GMO if it intends to
engage in these activities. Unallowable for State and Local governments and
for-profit organizations. (Also see Public
Policy Requirements and Objectives—Lobbying Prohibition, Appropriation Mandates—Lobbying—Appropriation Prohibition, and Administrative
Requirements—Monitoring—Reporting concerning lobbying
restrictions, the required certification, and reporting.)
Maintenance and Repair Costs
Costs incurred for necessary maintenance, repair or upkeep
of buildings and equipment (including Federal 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 an efficient operating
condition, are allowable. Costs incurred
for improvements which add to the permanent value of the buildings and
equipment or appreciably prolong their intended life shall be treated as
capital expenditures.
Meals
Allowable for subjects and patients under study, or where
specifically approved as part of the project activity, provided that such
charges are not duplicated in participants' per diem or subsistence
allowances, if any.
When certain meals are an integral and necessary part of a meeting or conference (i.e., a working meal where business is transacted), grant funds may be used for such meals only when consistent with terms of award.
The cost of meals served at a meeting or conference, for which the primary purpose is the dissemination of technical information, is no longer allowable on NIH grants where the primary purpose of the grant is to support a conference or meeting (see also Support of Scientific Meetings (Conference Grants) Section 14.10.1). However when such a meeting/conference is an ancillary effort under a grant where the primary purpose is other than to support such a meeting/conference, then the cost of meals would be allowable. When allowable as a direct charge, the cost of any meal must meet a test of reasonableness. However, recurring business
meetings, such as staff meetings, should not be broadly considered as
meetings for the primary purpose of disseminating technical information in
order to justify charging meals or refreshment to costs to grants.
Allowable. For institutions of higher education and
non-profit organizations, such costs must be incurred according to the
established policies of the organization consistently applied regardless of
the source of funds, the organization's policies must meet the test of
reasonableness, the methods of cost allocation must be equitable for all
activities, the amount assigned to each fiscal year must be determined in
accordance with generally accepted accounting principles, and the cost
assigned to a given fiscal year must be paid or funded for all plan
participants within 6 months after the end of that fiscal year.
State, local, or Indian tribal governments or hospitals
may use the "pay-as-you-go" cost method (i.e., when pension benefits are paid
by the grantee directly to, or on behalf of, retired employees or their
beneficiaries) in lieu of the method described above. Under this method, the
benefits may be charged in the grantee's fiscal year in which the payments
are made to, or on behalf of, retired employees or their beneficiaries,
provided that the grantee follows a consistent policy of treating such
payments as expenses in the year of payment. See the applicable cost
principles for additional information on the allowability of costs associated with pension plans.
Pre-Award (Pre-Agreement) Costs
Allowable. A grantee may, at its own risk and without NIH
prior approval, incur obligations and expenditures to cover costs up to 90
days before the beginning date of the initial budget period of a new or
renewal award if such costs:
are necessary to conduct the project, and
would be allowable under the grant, if
awarded, without NIH prior approval.
If specific expenditures would otherwise require prior
approval, the grantee must obtain NIH approval before incurring the cost. NIH
prior approval is required for any costs to be incurred more than 90 days
before the beginning date of the initial budget period of a new or competing
continuation award.
Grantees may incur pre-award costs before the beginning
date of a non-competing continuation award without regard to the time
parameters stated above.
The incurrence of pre-award costs in anticipation of a
competing or non-competing award imposes no obligation on NIH either to make
the award or to increase the amount of the approved budget if an award is
made for less than the amount anticipated and is inadequate to cover the
pre-award costs incurred.
NIH expects the grantee to be fully aware that pre-award
costs result in borrowing against future support and that such borrowing must
not impair the grantee's ability to accomplish the project objectives in the
approved time frame or in any way adversely affect the conduct of the
project.
Pre-Award Costs are generally not applicable to training
grants or fellowships. See respective sections for Individual
Fellowships and Institutional
Training Grants in the Ruth L. Kirschstein National Research Service Award chapter in IIB for additional information.
Profit or Fee
Except for grants
awarded under the SBIR/STTR programs, under an NIH grant, no profit or fee
will be provided to a for-profit organization, whether as a grantee or as a
consortium participant. A profit or fee under a grant is not a cost, but is
an amount in excess of actual allowable direct and F&A costs. In accordance with normal commercial
practice, a profit/fee may be paid to a contractor under an NIH grant
providing routine goods or services to the grantee.
Public Relations Costs
Allowable only for costs specifically required by the
award or for costs of communicating with the public and the press about
specific activities or accomplishments under the grant-supported project or
other appropriate matters of public concern. Such costs may be treated as
direct costs but should be treated as F&A costs if they benefit more than
one sponsored agreement or if they benefit the grant and other work of the
organization.
Publications
Allowable. Charges for publication in professional journals,
including author fees, are allowable if such costs are actual, allowable, and
reasonable to advance the objectives of the award; are charged consistently
(by the journal) regardless of the source of support; and all other
applicable rules on allowability of costs are met.
The costs of reprints and publishing in other media, such
as books, monographs, and pamphlets, also are allowable.
Allowable subject to the conditions and restrictions
contained in the applicable cost principles. These costs may include
help-wanted advertising costs, costs of travel by applicants to and from preemployment interviews, and travel costs of employees
while engaged in recruiting personnel. Visa costs are an allowable direct cost
as part of recruiting costs as long as the institution has an
employee/employer relationship with the individual. Project funds may not be
used for a prospective trainee's travel costs to or from the grantee
organization for the purpose of recruitment. However, other costs incurred in
connection with recruitment under training programs, such as advertising, may
be allocated to a grant-supported project according to the provisions of the
applicable cost principles (also see Travel, Relocation Costs, and Visa
Costs in this exhibit).
Registration Fees (for Symposiums and Seminars)
Allowable if necessary to accomplish project objectives.
Relocation Costs
Allowable – in other than change of grantee organization
situations – when such costs are incurred incidental to a permanent change of
duty assignment (for an indefinite period or for a stated period of no less
than 12 months) for an existing employee working on a grant-supported
project, or when a new employee is recruited for work on the project, provided
that the move is for the grantee's benefit rather than the individual's and
that payment is made according to established organizational policies
consistently applied regardless of the source of funds. Relocation costs may
include the cost of transporting the employee and his or her family,
dependents, and household goods to the new location and certain expenses
associated with the sale of the former home. If relocation costs have been
incurred in connection with the recruitment of a new employee, whether as a
direct cost or an F&A cost, and the employee resigns for reasons within
his or her control within 12 months after hire, the grantee must credit the
grant account for the full cost of the relocation charged to the grant.
Allowable subject to the limitations below. Rental costs
are allowable to the extent that the rates are reasonable at the time of the
decision to lease in light of such factors as rental costs of comparable
property, if any; market conditions in the area; the type, life expectancy,
condition, and value of the property leased; and available alternatives. Because
of the complexity involved in determining the allowable amount under certain
types of leases, grantees are encouraged to consult the GMO before entering
into leases that will result in direct charges to the grant project.
Rental costs under leases that create a material equity in
the leased property, as defined in the applicable cost principles, are
allowable only up to the amount that would be allowed had the grantee purchased
the property on the date the lease agreement was executed. This would include
depreciation or use allowances, maintenance, taxes, and insurance, but would
exclude unallowable costs.
When a grantee transfers property to a third party through
sale, lease, or otherwise, and then leases the property back from that third
party, the lease costs that may be charged to NIH projects generally may not
exceed the amount that would be allowed if the grantee continued to own the
property.
Rental costs under "less-than-arms-length" leases are
allowable only up to the amount that would be allowed under the applicable
cost principles had title to the property been vested in the grantee. A
less-than-arms-length lease is one in which one party to the lease agreement
is able to control or substantially influence the actions of the other. Such
leases include, but are not limited to, those between divisions of an
organization; between organizations under common control through common
officers, directors, or members; and between an organization and its
directors, trustees, officers, or key employees (or the families of these
individuals), directly or through corporations, trusts, or similar
arrangements in which they hold a controlling interest.
Research Patient Care
The costs of routine and ancillary services provided by
hospitals to individuals, including patients and volunteers, participating in
research programs are allowable. Incurrence of patient care costs if not
previously approved by NIH and rebudgeting additional funds into, or rebudgeting approved
amounts out of, the research patient care costs category may be considered a
change in scope and require prior approval by the NIH awarding IC.
Routine services include the regular room services, minor medical and surgical supplies, and
the use of equipment and facilities for which a separate charge is not
customarily made. Ancillary services are those special services for which charges customarily are made in addition
to routine services, e.g., x-ray, operating room, laboratory, pharmacy, blood
bank, and pathology. See the Research
Patient Care Costs chapter in IIB for NIH policy concerning
reimbursement of these costs.
The following otherwise allowable costs are not classified
as research patient care costs: items of personal expense such as patient
travel; consulting physician fees; and any other direct payments to
individuals, including inpatients, outpatients, subjects, volunteers, and
donors. Such costs should be included in the "Other Expenses" category of the
grant budget.
Reserve Funds
Contributions to a reserve fund for self-insurance are
allowable as specified in the governing cost principles (also see Contingency Funds in this exhibit).
Sabbatical Leave Costs
Sabbatical leave costs may be included in a fringe benefit
rate or in the organization's F&A rate. Salary may be charged directly to
a project for services rendered to the project by individuals while they are
on sabbatical leave, provided the salary is proportional to the service
rendered and is paid according to established organizational policies
applicable to all employees regardless of the source of funds. Sabbatical
leave paid by an individual's employer, in combination with other
compensation (e.g., partial salary from an NIH grant), may not exceed 100
percent of that individual's regular salary from his or her organization.
Salaries and Wages
Allowable. Compensation for personal services covers all
amounts, including fringe benefits, paid currently or accrued by the
organization for employee services rendered to the grant-supported project.
Compensation costs are allowable to the extent that they are reasonable,
conform to the established policy of the organization consistently applied
regardless of the source of funds, and reasonably reflect the percentage of
time actually devoted to the NIH-funded project. Direct salary is exclusive
of fringe benefits and F&A costs. This salary guidance does not apply to
consultant payments or to contracts for routine goods and services but it
does apply to consortium participants (see the Consortium Agreements chapter in IIB). Salaries of federal employees with permanent appointments
are unallowable except in certain circumstances (see the Grants to Federal Institutions and
Payments to Federal Employees Under Grants chapter
in IIB).
Salaries and Wages / Payroll Distribution
Salary and wage amounts charged to
grant-supported projects for personal services must be based on an adequate
payroll distribution system that documents such distribution in accordance
with applicable Federal Cost Principles and consistently applied
institutional policy and practices.
Salaries and Wages / Overtime Premiums
Premiums for overtime generally are
allowable; however, such payments are not allowable for faculty members at
institutions of higher education. If overtime premiums are allowable, the
categories or classifications of employees eligible to receive overtime
premiums should be determined according to the formally established policies
of the organization consistently applied regardless of the source of funds.
Salaries and Wages / Bonus Funds & Incentive Payments
Allowable as part of a total compensation
package, provided such payments are reasonable and are made according to a
formally established policy of the grantee that is consistently applied
regardless of the source of funds.
Salaries and Wages / Payments for Dual Appointments
For investigators receiving compensation from the
institution (grantee/contractor) and separately organized clinical practice
plans, compensation from such sources may be included in the institutional
base salary (IBS) budgeted and charged to NIH sponsored agreements if all of
the following criteria are met:
Clinical practice compensation must be set by the institution. *
Clinical practice activity must be shown on the institution's payroll or salary
appointment forms and records approved by the institution.
Clinical practice compensation must be paid through or at the direction of the
institution.
Clinical practice activity must be included and accounted for in the institution's
effort reporting and/or payroll distribution system.
The institution must assure that all financial reports and supporting documents
associated with the combined IBS and resulting charges to NIH grants are
retained and made available to Federal officials or their duly authorized
representatives consistent with the requirements of 45 CFR 74.53 (A-110
Subpart C 53).
* "Set by the institution" means the grantee/contractor institution must be in a
position to document and certify that the specified amount of clinical
practice compensation is being paid in essentially the same manner as other
specified amounts of the committed IBS (compensation) of the investigator. Further,
this requires that the IBS not vary based on the specific clinical services
provided by investigator within the periods for which total IBS is certified
by the grantee institution.
Tuition remission and other forms of compensation paid as,
or in lieu of, wages to students under
research grants are allowable, provided the following conditions are met:
The individual is performing activities necessary to the grant
Tuition remission and other forms of compensation are consistently provided, in
accordance with established institutional policy, to students performing
similar activities conducted in nonsponsored as
well as in sponsored activities
During the academic period, the student is enrolled in an advanced degree program at
a grantee or affiliated institution and the activities of the student in
relation to the federally sponsored research project are related to the
degree program.
Charges for tuition remission and other forms of
compensation paid to students as, or in lieu of, salaries and wages are
subject to the reporting requirements in section J.10. of OMB Circular A-21,
or an equivalent method for documenting the individual's effort on the
research project. Tuition remission may be charged on an average rate basis.
NIH will determine the allowability and
reasonableness of such compensation under a grant on the basis of OMB
Circular A-21 and its current operating guidelines.
The maximum amount NIH will award for compensation of a
graduate student receiving support from a research grant is the zero-level Kirschstein-NRSA stipend in effect when NIH issues the
grant award (see current levels posted at https://grants.nih.gov/training/nrsa.htm).
Payments made for educational assistance
(e.g., scholarships, fellowships, and student aid costs) may not be paid from
NIH research grant funds even when they would appear to benefit the research
project.
Service Charges
Allowable. The costs to a user of organizational services
and central facilities owned by the grantee organization, such as central
laboratory, technology infrastructure fees, computer services and next
generation computing/communication costs, are allowable provided that they
are not covered by F&A costs. They must be based on organizational fee
schedules consistently applied regardless of the source of funds.
Severance Pay
Allowable only to the extent that such payments are
required by law, are included in an employer-employee agreement, are part of
an established policy effectively constituting an implied agreement on the
part of the organization, or meet the circumstances of the particular
employment. The amount of severance pay to be provided should be determined
according to established organizational policy consistently applied
regardless of the source of funds and should be reasonable, taking into
consideration the practice of similar types of organizations and the extent
of the organization's dependence on Federal funds. The applicable cost
principles should be consulted regarding the different treatment of severance
pay in regular and mass termination situations.
Allowable. Such costs include taxes that an organization
is required to pay as they relate to employment, services, travel, rental, or
purchasing for a project. Grantees must avail themselves of any tax
exemptions for which activities supported by Federal funds may qualify. State
sales and use taxes for materials and equipment are allowable only when the
State does not grant a refund or exemption on such taxes.
Termination or Suspension Costs
Unallowable except as follows. If a grant is terminated or
suspended, the grantee may not incur new obligations after the effective date
of the termination or suspension and must cancel as many outstanding
obligations as possible (see Administrative
Requirements—Enforcement Actions—Suspension, Termination, and Withholding of
Support). NIH will allow full credit to the grantee for the
Federal share of otherwise allowable costs if the obligations were properly
incurred by the grantee before suspension or termination – and not in
anticipation of it – and, in the case of termination, are not cancelable. The
GMO may authorize other costs in, or subsequent to, the notice of termination
or suspension. See 45 CFR parts 74.62(c) and 92.43.
Trailers and Modular Units
Allowable only if considered equipment as provided below.
A "trailer" is defined as a portable vehicle built on a chassis that is
designed to be hauled from one site to another by a separate means of
propulsion and that serves, wherever parked, as a dwelling or place of business.
A "modular unit" is a prefabricated portable unit designed to be moved to a
site and assembled on a foundation to serve as a dwelling or a place of
business. The determination of whether costs to acquire trailers or modular
units are allowable charges to NIH grant-supported projects depends on
whether such units are classified as real property or equipment. The
classification will depend on whether the grantee's intended use of the
property is permanent or temporary.
A trailer or modular unit is considered real property when
the unit and its installation are designed or planned to be installed
permanently at a given location so as to seem fixed to the land as a
permanent structure or appurtenance thereto. Units classified as real
property may not be charged to an NIH grant-supported project unless
authorizing legislation permits construction or acquisition of real property
and the specific purchase is approved by the NIH awarding IC.
A trailer or modular unit is considered equipment when the
unit and its installation are designed or planned to be used at any given
location for a limited time only. Units classified as equipment may be
charged to NIH grant-supported projects only if the terms and conditions of
the award do not prohibit the purchase of equipment and NIH prior approval is
obtained, as appropriate.
A trailer or modular unit properly classified as real
property or as equipment at the time of acquisition retains that
classification for the life of the item, thereby determining the appropriate
accountability requirements under 45 CFR part 74.32 or 74.34 or part 92.31 or 92.32, as
applicable.
Allowable for freight, express, cartage, postage, and
other transportation services relating to goods either purchased, in process,
or delivered, including instances when equipment or other property is moved
from one grantee to another. In a change-of-grantee situation, the cost of
transportation may be charged to the grant at either the original or the new
organization, depending on the circumstances and the availability of funds in
the appropriate active grant account (see Administrative Requirements—Changes in
Project and Budget—Prior Approval Requirements).
Travel
Allowable as a direct cost where such travel will provide
direct benefit to the project.
Travel / Employees
Consistent with the organization's established travel
policy, these costs for employees working on the grant-supported project may
include associated per diem or subsistence allowances and other
travel-related expenses, such as mileage allowances if travel is by personal
automobile.
Domestic travel is travel performed within the recipient's
own country. For U.S. and
Canadian recipients, it includes travel within and between any of the 50
States of the United States
and its possessions and territories and also travel between the
United States and
Canada and within Canada.
Foreign travel is defined as any travel outside of Canada
and the United States and its territories and possessions. However, for an
organization located outside Canada and the United States and its territories
and possessions, foreign travel means travel outside that country.
In all cases, travel costs are limited to those allowed by
formally established organizational policy and, in the case of air travel,
the lowest reasonable commercial airfares must be used. For-profit grantees'
allowable travel costs may not exceed those established by the FTR, issued by
GSA, including the maximum per diem and subsistence rates prescribed in those
regulations. This information is available at http://www.gsa.gov.
If a recipient organization has no established travel policy, those
regulations will be used to determine the amount that may be charged for
travel costs.
Grantees are strongly encouraged to take advantage of
discount fares for airline travel through advance purchase of tickets if
travel schedules can be planned in advance (such as for national meetings and
other scheduled events).
Grantees must comply with the requirements of the Fly America Act
(49 U.S.C. 40118) which generally provides that foreign air travel funded by
Federal funds may only be conducted on U.S flag air carriers and under applicable Open Skies Agreements. For additional
information regarding the Fly America Act and its exceptions, see Public Policy Requirements and Objectives—Fly
America Act.
Applicants and grantees should consult
application instructions to determine how to budget for travel costs under
specific mechanisms and for certain types of travelers, because they are not
all required to be budgeted as travel (e.g., research subjects).
Travel / Research Patients
If research patient care is an approved
activity of the grant-supported project, the costs of transporting
individuals participating in the research protocol to the site where services
are being provided, including costs of public transportation, are allowable.
The purchase of motor vehicles for this purpose also may be allowable. (See
also Research Patient Care in
this exhibit.)
Visa Costs
Allowable direct cost as part of recruiting costs on an NIH grant, as
long as the institution has an employee/employer relationship with the
individual. It is the responsibility of the institution to monitor the status
of the individual's visa and ensure they have sufficient time to fulfill the
obligations of the research they are being paid for on the
grant. However, if the person is already an employee and the cost
in question is a visa renewal then this isn't a recruiting cost so the
cost would not be an allowable charge to a grant. Expedited processing
fees are generally unallowable unless and until they become part of standard
processing fees. Fraud fees are allowable if they are required fees.
Department of Homeland Security SEVIS Form I-901 is a required fee and is
allowable. See also Recruitment Costs in this exhibit.
NIH Staff 
