Principles of Sponsored Project Support

6.1 Principles of Sponsored Project Support

The majority of externally sponsored funding at BU is provided by the federal government. Cost accounting principles for higher education awardees are established by the Federal Office of Management and Budget (OMB). The OMB circulars that are most relevant to universities include the following:

OMB Circular A-21 (now 2 CFR 220): Cost Principles for Educational Institutions. This circular establishes principles for determining direct and F&A costs applicable to grants, contracts, and other agreements with educational institutions. OMB Circular A-21 notes that costs may be charged directly to sponsored projects if expenses meet the following criteria:

6.1.1 Reasonableness: The nature of the expenditure and the amount are prudent under the circumstances.

6.1.2 Allocability: The expenditure provides a direct benefit to the project (i.e., the cost of a piece of equipment that is required to accomplish the work of two projects may be proportionately shared by those projects).

6.1.3. Consistency: Costs incurred for the same purpose in like circumstances are treated consistently as direct or F&A (indirect) costs across the institution.

6.1.4 Allowability: Costs conform to any limitations or exclusions as set forth in OMB Circulars.

Examples of unallowable costs under federal sponsorship include: alcoholic beverages, entertainment costs, and most memberships. Costs that do not meet all of the above criteria may NOT be charged to federal awards. Non-governmental sponsors may apply different cost principles. Investigators must read the sponsor instructions carefully and consult with the OSP offices for further advice.

For Additional Information see:

OMB Circular A-110 (now 2 CFR 215): Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and other Non-Profit Organizations. This circular sets forth the minimum administrative requirements to which educational institutions must adhere. Individual federal agencies are required to implement OMB Circular A-110 as individual agency regulations. Examples are the NIH Grants Policy Statement or the NSF Grant Policy Manual.

OMB Circular A-133: Audits of Institutions of Higher Education and Other Non-Profit Institutions. This circular establishes audit requirements and defines federal responsibilities for implementation and monitoring of institutions of higher education receiving federal awards.