PURPOSE: The purpose of this procedure is to help project directors and administrators understand the guidelines for applying 0MB Circular A-21; Section F. Identification and Assignment of Indirect Costs; Part 6. Departmental Administrative Expenses; Paragraph b. which discusses secretarial/clerical salaries and certain other office related expenses. For easy of reference these will be referred to as F.6.b. expenses.

The pertinent sentences of F.6.b. are: "The salaries of administrative and clerical staff should normally be treated as indirect costs. Direct charging of these costs may be appropriate where a major project or activity explicitly budgets for administrative or clerical services and the individuals involved can be specifically identified with the project or activity. Items such as office supplies, postage, local telephone costs, and memberships shall normally be treated as indirect costs."

GENERAL: The University policy is to comply with all rules, regulations and restrictions imposed in any grant or contract the University accepts. Therefore, as a general University policy, F.6.b. expenses will be treated as indirect costs except for the important exceptions noted below. Indirect costs are recovered by charging the negotiated indirect cost rate on the modified total direct cost base on each sponsored agreement. These are not recovered by direct charging the grant or contract.

0MB Circular A-21 is a Federal document that applies to all direct and pass-through Federal grants and contracts. Certain other the State of New Jersey, selectively apply the Federal rules and regulations to their grants and contracts All awards that apply 0MB A-21 are considered covered awards for this procedure. Each award should be read carefully to determine if the Federal rules apply.

PROCESS: In order to directly charge any F.6.b. expenses to covered awards certain conditions and processes must be followed. These conditions and processes are outlined below.

ADMINISTRATIVE AND CLERICAL SALARIES:

Administrative and clerical salaries may be treated as direct costs if all of the following criteria are met:

· The project/proposal must require an extensive amount of administrative services which is significantly greater than the routine level of such services provided by academic departments.

· The costs must be able to be identified specifically with a particular project relatively easily with a high degree of accuracy.

· The costs must be explicitly budgeted and justified in the grant application or proposal.

Please also review Attachment A in which the 0MB gives their guidance on where direct charging of F.6.b. salaries is appropriate. The 0MB guidance includes six examples which are not exhaustive.

If the above conditions are met, the Project Director would be justified in submitting the direct charges in his/her proposal. If the Office of Research and Sponsored Programs (ORSP) agrees, Dr. Andrew Rudczynski will sign the proposal for the University and sent it to the appropriate agency for consideration.

Occasionally, the Project Director will not anticipate the need for F.6.b. salaries on covered awards until after the award has been received and work begun. With the exception of the Public Health Service (PHS) and the National Science Foundation (NSF), F.6.b. salaries may not be charged to covered awards without prior agency approval. The Project Director must write to the sponsor’s grant/contract officer for approval of an exception. Any such request must be countersigned by Dr. Andrew Rudczynski of the ORSP.

PHS and NSF (see Attachments B & C) will allow rebudgeting of F.6.b. salaries under expanded authority provided the salaries meet the first two criteria mentioned earlier or meet the exceptions provided by the 0MB. Project Directors must document and justify the need for the F.6.b. salaries in writing and sent it to the Division of Grant and Contract Accounting (DGCA) for approval. The OGGA will review the request for reasonableness, If the reviewer has a question on its technical merit, it will be sent it to the ORSP for approval. The Project Directors will be notified promptly by the DGCA of acceptance or rejection (and reasons why).

EXPENSES SUCH AS TELEPHONE, OFFICE SUPPLIES, POSTAGE AND MEMBERSHIPS:

Generally, these expenses are allowable if they are directly associated with the administrative and clerical salaries that meet the criteria listed above or if they have prior sponsor approval. Directly associated costs are those that would not have been incurred had the original expense not been incurred. For example, if an award requires extensive telephone polling and data entry into a data base and has sponsor approval for the administrative and clerical support required but has no approval for other expenses: The charging to the award of long distance telephone costs as well as costs for telephone and data entry forms would be allowable and consistent with the award’s purposes. Charging the award supplies and postage not directly associated with the polling and data entry may be allowable, but would need to be separately justified and approved. Membership expenses are rarely anything but a departmental support item.

If any directly associated costs were not explicitly budgeted and justified in the proposal, the project director must send a memo to the DGCA accountant specifically identifying these costs and their relationship to the project. The accountant is responsible for reviewing and approving the request. The requestor will be notified, with reason(s) why, if the request cannot be approved.

ACCEPTANCE BY THE AWARDING AGENCY:

If the agency accepts the proposal, it can accept or reject any of the F.6.b. expenses. If the agency rejects any of the expenses, we must treat the rejected expenses as indirect expenses and insure they are not charged to the project. If the Project Director is notified by the agency that some or all of the F.6.b. expenses are rejected, the Project Director must inform DGCA so the grant or contract is administered properly.

QUESTIONS: Contact the DGCA accountant or supervisor responsible for your account.