Guideline Charge

Allowable Costs on federally funded contracts and grants


The following guideline outlines the allowable costs for grants, contracts, and subawards at the University of Texas at Dallas (UTD). The guideline assures compliance with The Office of Management and Budget Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) - 2 CFR Part 220.

The Cost Accounting Standards (CAS) and OMB Uniform Guidance provide the basic criteria to determine direct costs on federally sponsored projects. 

Guideline Statement

Regardless of the funding agency, UTD determines cost allowability for sponsored programs based on answering the following questions:


*Allocable: The cost is incurred for the benefit of only one project, or the item can be easily assigned to multiple benefiting projects. A specific project may only be charged that portion of the cost that represents the direct benefit to that project.

*Allowable: Costs must conform to any limitations or exclusions stated in generally accepted accounting principles or in the sponsored agreement; i.e., the cost must be designated as “allowable” and not specifically as “unallowable” by regulation or grant/contract-specific award conditions.

*Consistent: Similar costs are treated as direct or F&A costs when incurred in like circumstances. Costs generally direct charged to a sponsored project should not be included as F&A costs on other projects when incurred for the same purposes. Where UTD treats a particular type of cost as a direct cost of sponsored agreements, all costs incurred for the same purpose in like circumstances shall be treated as direct costs of all activities of the institution.

*Reasonable: Cost is generally recognized as necessary for the performance of the project and one that a prudent person would consider reasonable given the same set of circumstances.

*Facilities & Administrative (F&A) Costs: Costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. F&A costs are synonymous with the term “indirect costs.”

*Unlike Circumstances: When a cost is incurred for a purpose outside of the normal practices or activities for that type of cost.

Guidelines for Allowable Costs

The following are roles and responsibilities to ensure no unallowable costs are to be expended on sponsored projects:

Principal Investigator


  1. Assume overall responsibility for programmatic aspects and financial stewardship of an award
  2. Complete and submit technical reports in a timely manner (interim and final)
  3. Initiate proposal submission
  4. Initiate request for budget revision
  5. Initiate request for no-cost extension
  6. Initiate request for cost transfers in accordance with University, as well as federal policy and procedures (OMB circular A-21)
  7. Review and accept subaward terms and conditions
  8. Review and approve subaward invoices
  9. Manage subaward performance
  10. Review and approve effort certification
  11. Assist with collection efforts on past due invoices, as needed

Department Administrator


  1. Act as a liaison between the Principal Investigator (PI) and the Research Office
  2. Assist principal investigator with proposal preparation
  3. Monitor and reconcile expenditures to ensure allowability, allocability, consistency, and reasonableness
  4. Monitor and reconcile balances to ensure spending within budget and to prevent over-expenditures
  5. Maintain backup documentation related to expenditures within terms and conditions of the award (record retention)
  6. Fund, monitor, track and document cost share commitments
  7. Manage and verify effort certification submissions
  8. Assist PI with request for budget revision
  9. Process cost transfers in a timely manner, in accordance with University and federal policy and procedures (Uniform Guidance)
  10. Initiate purchase order request for approved subaward agreements
  11. Review subaward invoices to verify funding availability
  12. Assist with collection efforts on past due invoices, as needed
  13. Review, complete, and submit closeout checklist in a timely manner

Research-Office of Sponsored Projects(OSP)


  1. Notify researchers regarding funding opportunities and sponsor policies and procedures.
  2. Provide technical assistance to researchers drafting proposals, review proposals, and process proposals for submission to sponsoring agencies.
  3. Negotiate terms for awards and contracts.
  4. Receive award documents from Sponsor and forward to Post-Award Management for creation of a cost center.
  5. Assist with the following post-award administrative functions: re-budgeting, time extensions, and tracking of technical reports.

Research-Office of Post Award Management(OPM)


  1. Provides guidance and interpretation of federal regulations, agency specific requirements, and University policies and procedures
  2. Establishes new cost center and post-budget for all sponsored projects in conjunction with SFO.
  3. Establishes and monitors cost share cost center and budget in conjunction with SFO.
  4. Approves expenditures on sponsored projects after PI has approved.
  5. Audit expenditure balance and award activity to verify financial compliance with University and sponsor regulations and to ensure allowability, allocability, and reasonableness.
  6. Verify and audit cost share in accordance with award terms and conditions
  7. Verify data within effort certification submissions in accordance with University policies and procedures
  8. Approves cost transfers, PAFs, and Auto JE’s to remove unallowable costs and over expenditures
  9. Initiate semi-annual effort certification process
  10. Provide training, as needed.

Unallowable Costs

Typically unallowable costs on federal awards:

Allowable Cost

A cost is allowable when allowed by OMB Uniform Guidance (OMB 2 CFR Part 220), it serves the grant purpose (instruction, research, public service), federal regulations, and is allowed by The University of Texas at Dallas Expenditure Policy (UTDBP3097)

Such costs are:

Proposal Budget Checklist

The purpose of this checklist is to provide principal investigators with a budget development tool for sponsored programs. Costs fall into two major categories—direct costs and facilities and administrative costs (F&A). When developing your budget, be sure to visit Sponsored Projects web site and Post Award Management for further information.

Direct Costs (Costs Directly Related to the Specific Project)

Personnel Costs

Senior Personnel Salaries

_Fringe Benefits_All persons paid to perform work on a grant or contract who are University employees are entitled to receive fringe benefits.

Other Direct Costs Typically Associated with Research and/or Training Projects

Animal Care

To record payment for animal care services provided by UTD animal care facility.
Faculty who anticipate the use of a particularly large number of research animals or animals requiring special care should consult with the Animal Resources Center staff to see whether the funds estimated will be adequate and whether the Animal Resource Center has adequate facilities to accommodate the animals.

Capital Expenditures

Equipment means an article of non-expendable, tangible personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per acquisition components, other than on-campus machine-shop labor, used to fabricate an item of capital equipment may be considered as capital equipment for budgeting purposes and should be identified for inventory purposes.

Computer Software


Lab and Medical Supply

Leases and Rentals

Materials and Supplies


NOTE: The cost of food/meals*while not in travel status*will normally*not*be allowed as a direct charge on federally sponsored (or federal flow-down) projects, as these costs are typically considered a personal expense.

Note that sponsors may place more stringent restrictions than specified in this procedure; refer to the terms and conditions outlined in the notice of award for requirements and/or treatment of such costs.

Section V-C-5

“5. Meetings and Conferences. The points below summarize the allowability of various items of cost associated with conferences, symposia, workshops, or other meetings supported by an NSF grant. Any costs charged to an NSF grant also need to be reasonable and directly allocable to the supported activity. See AAG Chapter VI.G.5 for funding limitations on international travel grants. Meeting and conference costs identified below, are only allowable if such costs are specifically and clearly identified in the proposed scope of work and budget, as modified and approved by NSF.NSF funds are not to be spent for meals or coffee breaks for intramural meetings of an organization or any of its components, including, but not limited to, laboratories, departments and centers, as a direct cost.”

Section V-C-5-g

“g. Meals and Coffee Breaks. When certain meals are an integral and necessary part of a conference (e.g., working meals where business is transacted), grant funds may be used for such meals. Grant funds may also be used for furnishing a reasonable amount of hot beverages or soft drinks to conference participants and attendees during periodic coffee breaks.”

Section V-C-5-i

“i. Entertainment. Costs of entertainment, amusement, diversion, and social activities, and any costs directly associated with such costs (such as tickets to shows or sporting events, meals, lodging, rentals, transportation, and gratuities) are unallowable. Travel, meal, and hotel expenses of awardee employees who are not on travel status are unallowable. Costs of employees on travel status are limited to those allowed under the governing cost principles for travel expenses. (See AAG Chapter V.B.4).”


Photocopy Charges

Professional Services

Publication/Page Charges

Rental Equipment




Subject Payments

Student Support

Student Participant

Pay program participant small non-compensatory stipends and possibly reimbursement of travel costs or other out-of-pocket costs incurred to support attendance at a workshop, conference, seminar, symposia, or other short-term training or information sharing activity<span></span>*in support for the objective of obtaining a degree.

Telecommunication Charges




Facilities and Administrative Costs (a.k.a. Indirect Costs, Overhead,Tax)

Facilities and administrative costs must be included using the University’s federally-negotiated rates unless the sponsor has a written policy applicable to all potential proposers which deviates from these rates. All deviations are subject to UT Dallas administrative approval. Sponsor guidelines limiting facilities and administrative costs must be provided with your proposal.To calculate the facilities and administrative costs for a project, do the following:Calculate the Total Direct Costs (TDC) which is simply the sum of all direct costs:

Calculate the Modified Total Direct Cost (MTDC) by subtracting the following exempt items from the TDC:

Multiply the F&A rate against the MTDC base to calculate the facilities and administrative costs for the project.Add the TDC to the F&A costs to calculate the Total Project Costs.Summary:

Other Budget Considerations

UTD Cost Sharing</u>
Cost Sharing is defined as committed resources that are NOT funded in a research agreement. Common examples include salary costs in excess of the NIH salary cap and committed but unfunded effort. This cost share is funded by a departmental account. On all grants, no cost sharing commitments may be submitted unless specifically approved by the respective Dean.

Since in-kind expenses are not expenditures made by the university, documentation must include the value of the donated equipment, supplies, and/or volunteer services.Types of cost sharing:

Policy Links

Allowable Cost on federally funded Contracts and Grants

The University of Texas at Dallas Expenditure Policy (UTDBP3097)

OMB Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance)

OMB 2 CFR Part 220

Cost Accounting Standards (CAS)

The Office of Sponsored Projects

Issued: June 2015