As governed by OMB Circular A-21, the total cost of a sponsored agreement is comprised of the allowable direct costs incident to its performance, plus the allocable portion of the allowable indirect costs (Facilities and Administration costs) of the institution.
Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. In general, expenses are chargeable as direct costs to sponsored awards only if they are:
Indirect (or Facilities and Administration) costs are those 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.
"Facilities" includes depreciation and use allowances, interest on debt, equipment and capital improvements, operation and maintenance expenses, and library expenses.
"Administration" includes general administration and general expenses, departmental administration, sponsored projects administration, student administration and services, and all other types of expenditures not listed specifically under one of the subcategories of "Facilities".
Since computers and electronic devices (including but not limited to cell phones, iPads, GPS, software, and other related applications) are generally used for many different activities (such as instruction, research, administration, email, personal use), they usually are not considered direct costs to a federally funded project. Under federal regulations, they should normally be treated as Facilities and Administrative costs and should be recovered through the indirect cost rate.
To be considered as direct costs, these items must be:
Documentation supporting computer and electronic device purchases must:
To maintain its allowability, a computer or electronic device must be used primarily (at least 95%) on the award. Incidental use should never cause the computer or electronic device to be removed from the project location. Software, upgrades, computer supplies, etc. purchased on federal awards must be likewise necessary for the conduct of the research and conform to these requirements.
As supplementary guidance, below are policy statements about general purpose equipment excerpted from the National Science Foundation (NSF) and the National Institute of Health (NIH).
GENERAL PURPOSE EQUIPMENT: Expenditures for general purpose equipment are unallowable unless the equipment is primarily or exclusively used in the actual conduct of the research (AAG, IV, E, 2).
EQUIPMENT: Office equipment (copiers, laptops, desktop computers, personal handheld computers, fax machines, scanners, etc.) that is used for general office purposes (rather than justified as a specific research purpose) are not allowable as direct costs; they are allowable as an F&A cost (Part II, A, 7.5).
The Director of Grants and Contracts shall oversee this policy and review it at least once every two years. Changes to this policy shall be made in accordance with the college's Policy on Policies.