COST ACCOUNTING JUSTIFICATION

Table of Contents

• PURPOSE
• GENERAL INFORMATION
• EXHIBIT AND INSTRUCTIONS
• FORM REQUIREMENTS
• NUMBER OF COPIES AND ULTIMATE DISTRIBUTION
• WHERE TO SEND COMPLETED FORMS
• CONTACT INFORMATION
• CROSS REFERENCES

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PURPOSE

The Cost Accounting Justification Forms are to be used to treat the costs normally considered indirect as a direct cost for a sponsored agreement.

GENERAL INFORMATION

Uniform Guidance 2 CFR 200.56 Indirect (facilities & administrative (F&A)) costs, disallows the direct charging of F&A type costs on federal sponsored agreements. However, there are certain unique exceptions to this rule allowing for the direct charging of these types of costs in the event the University can justify the charges. Determining if a cost should be included as a direct cost should normally be done at the proposal stage. There are certain departmental costs which are included as F&A, and therefore, should not be included as a direct cost. Principal Investigators (PI) should work closely with the Research Administrator to ensure that costs normally considered F&A are not included as direct costs in a proposal, unless there is a compelling reason to do so. See Policy RA21 Development of Proposal Budget for additional guidance.

Facilities and administrative type costs are incorporated into the F&A rate charged as an indirect cost to the grant. The types of costs which cannot normally be direct charged are:

• Administrative and clerical salaries (support personnel): This includes departmental staff who provide support for all departmental operations, including research or contract administration and includes administrative assistants, departmental IT staff and others who provide general support for all operations.


• Non-Personnel Costs


• General purpose equipment and supplies: This category includes paper, toner, office supplies, as well as printers, laptops, computers and software and related peripherals.
• Other costs: This category includes, but is not limited to, photocopying, mailing services, telecommunication costs, memberships and group meals. This list is not exhaustive and there may be other non-personnel costs not listed here which would be considered administrative, and therefore would require the exception.


• Cost Accounting Justification Non-Personnel Costs Checklist - This form is optional. It is intended to assist Principal Investigators, Research Administrators and Financial Officers to evaluate the justification of charging costs, which are normally charged as F&A expenses such as general purpose items, services, computers or supplies, directly to a sponsored program. If used, please attach to a Non-Personnel Cost Accounting Justification form.

More detail on these expenses are included in the Cost Accounting Standards FAQ. This document should be reviewed before completing this form.

These costs may be permissible as direct charges. Adequate justification regarding the allowability and allocability of the expense must be documented, through the justification form. The justification must provide detail regarding:

• Allowability: A specific justification of how this cost will directly support the research being conducted - the project specific need for this cost as a direct charge to the project.


• Allocability: A specific allocation of this cost to the project. The detailed criteria to meet the allocability standard are available in the Uniform Guidance 200.405 Allocable costs. A cost is allocable to a sponsored agreement if:
• is incurred solely to advance the work funded under the sponsored project;
• benefits both the sponsored project and other work of Penn State in proportions that can be clearly documented through reasonable methods

At the discretion of the Administrative Area, the justification can be prepared either during proposal preparation or when allocating the cost to a sponsored program. The preferred method is during proposal preparation. The cost must be approved before being charged to the sponsored program. Regardless of the timing, the proposal should provide detailed justification for including these costs as direct charges. Generally, if the cost is not included in the proposal, it will not be permitted as a direct cost at the time of purchase.

NOTE:

General purpose equipment is not allowable except with the prior written approval of the Federal awarding agency or pass-through entity (2 CFR 200.439(b)(1) Equipment and other capital expenditures).

Administrative or clerical salaries are not allowable unless they are explicitly included in the budget or have the prior written approval of the Federal awarding agency (2 CFR 200.413(c) Direct costs).

The appropriate form - one for Administrative/Clerical costs and the other for Non-Personnel costs - must be completed as indicated, and signed by the PI, and approved by those listed. Approval indicates the following:

• Principal Investigator - signature indicates that the PI asserts that this is a valid expense to charge directly to the sponsored award, based on the PI's assessment of the reasonableness, allowability, and allocability of the cost to the project.
  
• Department Head or Institute Director (Administrative and Clerical Costs Justification only) - signature indicates that the Department Head or Institute Director approves of the cost of the administrative or clerical support position and will cover costs if later disallowed.


• Research Administrator or Financial Officer - signature indicates agreement that costs are reasonable, allocable, and allowable as a direct charge to the sponsored award, given the justification provided by the PI.


• Associate Dean/VP for Research/Campus Director of Academic Affairs (DAA) (Administrative and Clerical Costs Justification Only) - signature indicates final approval that cost may be treated as a direct charge to the sponsored award given the justification provided by the PI.

The forms will become a part of the official grant / contract file.

EXHIBIT AND INSTRUCTIONS:

These forms have the digital ID (signature) process enabled. The PDF version has instructions provided for the type and/or format of information to be included within the fill-and-print form fields. Hovering the computer mouse over any form field within the PDF will display these instructions.

To view a printed version of these instructions, click on links below:

Cost Accounting Justification - Administrative/Clerical Costs Exhibit

Cost Accounting Justification - Non-Personnel Costs Exhibit

Cost Accounting Justification - Non-Personnel Costs Checklist Exhibit (optional)

FORM REQUIREMENTS

No form may be used that substitutes for an approved official University form without prior review and approval by the steward of the form/central office, as facilitated by the Office of Systems and Procedures (designated representative of the Associate Vice President for Budget and Finance). See Policy FN17 Required Use of Approved University Forms Appearing in the General University Reference Utility (GURU) and Procedure FN2017 Use of Approved Form Templates Appearing on the GURU Website for full details.

If you encounter any difficulties, contact the GURU support staff by submitting a Technical Support Form request.

NUMBER OF COPIES AND ULTIMATE DISTRIBUTION

*Transitory/Disposable Records - University Records that have temporary value and, as a result, may be destroyed after they are no longer needed. In no event shall be retained longer than the official copy of the University Records as delineated on the Records Retention Schedule.

WHERE TO SEND COMPLETED FORMS

Once all signatures have been obtained, the form is to be returned to the Principal Investigator and retained in the contract file.

CONTACT INFORMATION

For questions or additional details, please contact Research Administration.

To request changes to these forms, please contact the Office of Systems & Procedures by submitting a GURU Technical Support Request form.

CROSS REFERENCES

• Policy AD35 University Archives and Records Management
• Policy RA21 Development of Proposal Budget
• Policy FN17 Required Use of Approved University Forms Appearing in the General University Reference Utility
• Procedure FN2017 Use of Approved Form Templates Appearing on the GURU Website
• Uniform Guidance 200.56 Indirect (facilities & administrative (F&A) costs
• Uniform Guidance 200.405 Allocable costs
• Uniform Guidance 200.413 Direct costs
• Cost Accounting Standards FAQ

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