When preparing your budget, it is important to understand which costs can be charged to your project and why a particular cost may be allowed or not allowed. What can be charged (allowable) is governed by a number of laws, regulations and policies, as well as sponsor guidelines.
Examples of some common allowable costs are listed below. This list is not exhaustive, and some items may not be allowed depending on the sponsor or program.
- Technical staff salaries and related expenses (ERE)
- Laboratory supplies (e.g. chemicals)
- Long distance phone charges
- Animals and animal care costs
- Well-justified computer costs
- Travel costs
- Specialized shop costs
- Research equipment repair and maintenance costs
- Data processing supplies
- Printing costs for technical reports
- Express mail
The Office of Management and Budget (OMB)
The Office of Management and Budget (OMB) is the executive agency that advises the President on the federal budget. It also oversees and coordinates the Administration's procurement, financial management, information, and regulatory policies. The OMB establishes government-wide grants management policies and guidelines through circulars and commons rules; these are then adopted by each grant making agency.
Office of Management and Budget (OMB) Uniform Guidance for Federal Awards, establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions. Under these principles, costs must be:
- Reasonable: A cost is reasonable if, in its nature and amount, does not exceed that which would be incurred by a prudent under the circumstances prevailing at the time the decision was made to incur the cost (2 CFR 200.404).
- Allocable to the particular sponsored agreement: A cost is allocable to a sponsored project if (1) it is incurred solely to advance the work under the sponsored agreement; or (2) it benefits both the sponsored project and other work of the institution in proportions that can be approximated through use of reasonable methods.
- Given consistent treatment throughout the institution.
- Compliant with any limitations or exclusions set forth in applicable federal regulations and the particular award's terms and conditions.
University of Arizona
The University of Arizona’sFinancial Services Manual, Section 9.10, Requisitions/Reimbursements and 9.10 Allowable by Fund Source provides guidance on which costs are allowable on sponsored projects. See additional information about unallowable costs under Managing Projects.
National Institutes of Health
The NIH Grants Policy Statement, Section 7, Cost Considerations, provides a list of specific items that may or may not be included as costs in a grant.
National Science Foundation
The NSF's Chapter V, Allowability of Costs, summarizes the allowability of frequently encountered direct cost items.
Defense Contracts
10 USC Section 2324, Allowable Costs under Defense Contracts, lists the specific costs that are allowable and not allowable under defense contracts.
Non-Federal Sponsors
The University of Arizona receives funding from a wide variety of sources. The terms of an individual award take precedence over the general provisions of OMB Uniform Guidance. For example, although travel is allowable under Uniform Guidance, it may not be allowable under a particular award. In this case, the University of Arizona would not be able to charge travel costs to the project. Information regarding cost allowability should be outlined in the proposal guidelines. Please contact Sponsored Projects & Contracting Services for assistance.