Expenses to Watch

Guideline Date: September 2017      Revision: 1     Last Review: August 2017

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The importance of sponsored project expenses cannot be overemphasized. But with the myriad federal regulations, program and University policies that govern allowable project costs, particular expense categories are frequently misunderstood and highly scrutinized by auditors. The sections below highlight project expenses to which principal investigators (PIs) should pay close attention. Before incurring any of these expenses, check the award terms and conditions and University policy to ensure that the expenses are allowable.

Proposal Preparation Costs

Costs of preparing proposals and applications (e.g., copying, mailing, long distance telephone charges, etc.) for the purpose of acquiring sponsored funding are not allowable.

Programmatic Salary Costs

Costs related to protocol development and maintenance, managing substances/chemicals, managing and securing project-specific data and coordination of research subjects are allowable direct costs when they contribute to and are directly related to work under the sponsored project agreement. These programmatic costs may be direct charged using the same underlying requirements as other types of direct costs and are not subject to the prior approval requirements necessary for administrative and clerical salaries. 

Participant Support Costs

Per the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.456 Participant support costs, participant support is allowable only with the sponsor's prior written approval. This includes stipends and subsistence allowances, travel allowances and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences or training projects. Participant support costs are not routinely allowed on sponsored projects but can be charged if the project includes an education or outreach component and the sponsoring agency approves such costs. These costs must be explicitly listed in the proposal budget and approved by the sponsor at the award stage. Participant support costs must be excluded from the base when calculating the indirect cost for project budgets. 


Equipment is defined by the federal government and the University as tangible, nonexpendable property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit (including tax, shipping and installation). Like participant support expenses, equipment is excluded from the base on which F&A is calculated.

Important considerations before purchasing equipment on a sponsored project:

  • General purpose equipment is unallowable as a direct cost except with the prior written approval of the sponsor.
  • The cost of equipment that will benefit more than one sponsored project should be proportionately distributed to all benefiting projects.
  • Budgeted equipment is generally purchased in the beginning of a project unless the scope of work is such that the equipment is essential during a later budget period.
  • Maintenance and repair costs to keep project-specific equipment—whether existing or purchased with project funds—in operating condition may be allowable within the timeframe of the award performance period. These costs are not included in the value of the equipment; rather, they are project operating expenses. 
  • As with equipment purchases, if the maintenance agreement or repair cost benefits more than one sponsored agreement or activity, the cost must be allocated to the various projects proportionately based upon the benefit directly received by each.


Whether food is an allowable expense can be a source of confusion. Food is generally not an allowable sponsored project expense. However, meal costs incurred during the course of travel are generally allowable. Local business meals may be charged directly to a sponsored project if they are linked to a formal meeting or conference at which technical information directly related to the project is being shared or disseminated and there is a formal agenda and documented attendee list. The rules for allowability of food expenses are included in the University Administrative Manual (UAM), Section 1,067: Host Expenses.


Before charging travel to a sponsored project, PIs should review all relevant travel policies—sponsor, program, federal and University—and follow the most restrictive policy, noting any special requirements such as pre-trip approval. Reviewing the Fly America Act, which restricts travelers to American flag air carriers when traveling on federal funds unless exception criteria are met, is especially important. Travelers should also be familiar with export control requirements when travelling internationally. 

Tuition Remission

Some sponsors do not allow student fees or tuition remission as a direct charge to projects. Check the award terms and conditions or agency guidelines if you are employing a graduate student on your project. Because tuition remission is a graduate assistantship benefit, an alternate, non-sponsored funding source will need to be identified to pay these costs if the sponsored project does not allow tuition. 

Memberships and Subscriptions

Per the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, §200.454, the following rules apply to membership and subscription expenses:

  • Costs of membership in business, technical, and professional organizations are allowable.
  • Costs of subscriptions to business, professional, and technical periodicals are allowable.
  • Costs of membership in any civic or community organization are allowable with the prior approval of the federal awarding agency or pass-through entity.
  • Costs of membership in any country club or social or dining club or organization are unallowable.
  • Costs of membership in organizations whose primary purpose is lobbying are unallowable.

Administrative Salaries and Expenses

For guidance on administrative and clerical salaries, please see the policy, Charging Administrative and Clerical Costs to Federally Sponsored Projects.

Office Supplies, Telecommunication Charges and Postage Charges

Office supplies, postage/mailing costs and telecommunication charges (e.g., local telephone line charges, cell phone charges and internet charges are normally treated as facilities and administrative (F&A) costs and are included in the departmental administration component of the F&A rate. These expenses may only be charged to a sponsored project as direct costs in atypical instances such as a project based large-scale mail or telephone survey. Long-distance charges that are specifically identifiable to a project may be directly charged.

Publication Charges

Costs related to the publication or sharing of sponsored project results are allowable. Further, these expenses can be charged to a federal award after the award performance period end date as long as the expenses occur before the end of the 90-day award closeout period.

Computers, Software and Computer Supplies

Computing devices under $5,000 per unit may be direct charged to a sponsored project under the following circumstances:

  1. The devices are essential* and allocable to the project in that they are necessary to acquire, store, analyze, process and publish data and other information electronically. This includes accessories (or "peripherals") for printing, transmitting and receiving or storing electronic information.
  2. The project does not have reasonable access to other devices or equipment that can achieve the same purpose. Devices may not be purchased for reasons of convenience or preference.
  3. Items costing more than $5,000 per unit are considered equipment and follow federal equipment rules for when they can be direct charged.

Recharge Activities and Service Centers

Costs of recharge activities and service centers are allowable as direct costs to a sponsored project in which such costs are required under the scope of the project. All usage must be accounted for and services must be charged to all users based on actual usage using uniform, non-discriminatory rates. The rates must be based on the direct costs of providing the service. Rates must be approved within University policies and appropriately revised based upon review of the actual direct expenses and charges to users. Charging a tax on projects is prohibited. In other words, a programmer's time could be directly recharged based upon hours worked on the project, but three percent could not be charged to all sponsored projects in a department to pay for programing services.

Visa Costs

The Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, §200.463 Recruiting costs, allows short-term, non-immigration visa costs for a specific period and purpose as direct costs to federal awards. The person connected with these visa costs must be critical, necessary and clearly identified as directly connected to the work performed on the federal award. These expenses are classified as recruiting costs, so only the initial visa cost is allowable. J-1 and H-1B visas are for a specific period and purpose; therefore, these visa types are generally allowable if the specific conditions are met.

*PIs are responsible for determining whether or not a device is essential and to what extent the cost of the device is allocable to the sponsored project. PIs and departments should maintain documentation that describes how the proposed computing device meets the above requirements.

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