Procedures to Account for Certain Restricted Expenses on Federal Projects
Effective for all federal accounts
as of July 1, 1994
Updated 02/14/03
TO: Project Directors and Administrators of Federal Sponsored Projects
FROM: Robert L. Barbret, Manager Sponsored Programs
DATE: October 3, 1996
SUBJECT: Procedures to Account for Certain Restricted Expenses on Federal Projects
Purpose
OMB Circular A-21 guidelines require certain expenses to be reviewed to determine if they are allowable. These expenses include: clerical and administrative salaries, supplies (consumable and office supplies), postage, telephone line charges and local calls, memberships and dues, journals and other subscriptions, books, and hosting and food expenses. The main purpose of these federal guidelines is to confirm that all expenses charged to a research project have a "Direct Benefit" and should be charged as "Direct Costs" to the project.
While some expenses may have a "Direct Benefit", they may be more appropriate as charges on a discretionary ChartField combination. Some of these expenses may already be included in the indirect cost recovery under federal guidelines and therefore, are not appropriate to the federal project. For example, general postage and telephone charges are included in the indirect cost recovery calculations and should not be charged as direct costs to a federal project, unless specifically requested and approved in the proposed budget submitted to the sponsor.
Request of Funds in Original Budget Proposal & Post-award Requests
When a grant proposal is submitted to the sponsor, specific funding should be requested for any category of expenses that may be questioned under OMB Circular A-21. Justification should be provided as to why these expenses are necessary to conduct research during the scope of the project. For example, it may be appropriate to request funds for general postage in conjunction with an anticipated survey that will be mailed out as part of the research project.
A job aide titled "Review of A-21 Monitored Budgets" has been produced to assist Project Directors and Project Administrators in preparing proposal budgets by identifying those types of expenses included in the A-21 monitored budget categories. The job aide also identifies those types of expenses that are not included in the A-21 monitored budget categories.
Other post-award considerations apply to purchase requisitions, petty cash reimbursements, Non Po vouchers, transfer vouchers, journal entries, hosting/travel expense reports, and purchasing card expense reports. When preparing these documents, a more descriptive Account code than 615560 or 616040 should be provided, when one is available. If an accurate Account code is not available, contact the Financial Operations-Financial Reports area to establish a new Account.
Annual and Final Review
A review of certain
restricted expenses is required for awards with activity beginning 7/1/94 or
later. Sponsored Programs staff will review all Federal Project/Grants on an
annual basis. In addition to the annual
review one will be completed when the final Financial Status Report and/or
final bill are completed. The review may result in costs being identified that
need to be addressed. In such cases an A-21 Report will be sent to the Project
Director detailing the costs to be reviewed.
A job aide titled
"Review
of A-21 Reports" has been produced to assist Project Directors and
Project Administrators in reviewing these reports. The job aide analyzes how
expenses will be treated (1) if the funds were requested and approved as part
of the initial budget submission, (2) are classified with an incorrect Account
or (3) if the expense is justified but the funds were not approved as part of
the budget submission. To use this job aide, find the Account for the
restricted expense in the first column and determine the correct treatment from
one of the last three columns.
If you have any questions, please contact your Project/Grant coordinator.