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University of Colorado Denver

Office of Grants and Contracts
 

Costs Overview

Office of Grants and Contracts


 

Cost Types

Direct Costs

Those costs that can be easily and accurately identified specifically with a particular sponsored project.

Examples:

  • salaries/fringe benefits for principal investigator, co-investigators, technical staff, and collaborators (relative to the level of effort expended on the project);
  • laboratory supplies;
  • long-distance telephone toll charges;
  • animals and animal care costs;
  • equipment costs;
  • travel costs;
  • specialized shop costs.

Facility and Administrative Costs:

Those costs that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project.

Examples:

  • salaries/fringe benefits for administrative and/or secretarial staff;
  • routine departmental administrative and accounting costs;
  • membership dues/fees for technical and/or professional organizations;
  • office supplies;
  • ordinary and routine postage;
  • costs associated with preparing proposals, including typing, copying and mailing costs;
  • telephone hook-up fees and local service charges;
  • computer hook-up fees.

Consistent Treatment:

  • Costs incurred for the same purpose in like circumstances must be treated consistently as either direct or F&A costs.

Allowable Costs

Section J of OMB Circular A-21 provides a list of allowable and unallowable costs, and the principles to be applied in establishing the allowability of certain items. These principles are applicable irrespective of whether a particular item of cost is to be treated as a direct cost or an F&A cost. Failure to mention a particular item of cost is not intended to imply that it is either allowable or unallowable; rather, determination as to allowability in each case should be based on the treatment provided for similar or related items of cost. In case of a discrepancy between the provisions of a specific sponsored agreement and the provisions in Section J, the agreement should govern.

Cost Principles

Federal cost principles outlined in OMB Circular A-21 establish the following requirements:

  • Costs must be reasonable and necessary for the performance of the sponsored program.
  • Costs that benefit more than one sponsored program should be allocated to the “users” in proportion to the benefits received, using a reasonable basis for reflecting use or level of service.
  • Costs may not be shifted to other sponsored programs due to cost overruns, avoidance of restrictions imposed by law, or for convenience.

UC Denver Fiscal Policy 4-7 provides more information and guidance on the treatment of costs as either direct or F&A costs.

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