Administrative and clerical salaries can be charged directly to a federal sponsor when the effort is integral to the project.
Last Update:3/15/2015
Stanford Summary
Administrative and clerical salaries should typically be treated as facilities and administrative costs on federally sponsored projects; however, when certain criteria are met, they may be allowed as a direct cost.
The Uniform Guidance eliminates the major project criteria from A-21 for the direct charging of administrative and clerical salaries and now requires an administrative salary to meet the criteria of integral.
Direct charging of costs administrative and clerical salaries to federally sponsored projects is appropriate only if ALL of the following conditions are met:
1. Administrative or clerical services are integral to a project or activity
- The requirement that the cost is “integral” means the services are essential, vital, or fundamental to the project or activity
2. Individuals involved can be specifically identified with the project or activity
3. Such costs are explicitly included in the budget or have the prior written approval of the federal awarding agency
- A budget justification must be included in the proposal
4. The costs are not also recovered as indirect costs
Non-federally Sponsored Projects
Direct charging of administrative or clerical salaries to a non-federally sponsored project is appropriate if the services benefit the sponsored project. Some non-federal sponsors may have specific requirements for direct charging of administrative costs. Such requirements need to be addressed in proposals.
Application at Stanford
The Uniform Guidance is effective for federally sponsored agreements and new funding increments incorporating the Uniform Guidance awarded on or after December 26, 2014. Federal awards received before December 26, 2014 must continue to follow the requirements in OMB A-21 and Stanford’s policy on Charging for Administrative and Technical Expenses (RPH 15.4).
All federal proposals with an anticipated start dates of after December 26, 2014 must propose using the concept of integral when proposing administrative or clerical salaries.
Federal awards received before December 26, 2014 must continue to follow the requirements in OMB A-21 and Stanford’s policy on Charging for Administrative and Technical Expenses (RPH 15.4).
Non-federally Sponsored Projects
Direct charging of administrative or clerical salaries to a non-federally sponsored project is appropriate if the services benefit the sponsored project. Some non-federal sponsors may have specific requirements for direct charging of administrative costs. Such requirements need to be addressed in proposals.
Sample Budget Justification
"The PI has included effort for administrative salary that is integral to the project, and not for general support of the academic activities of the faculty or department. Effort charged to this project can be specifically identified to the project."
Describe how the administrative role is integral, i.e., essential, vital or fundamental, to the project.....
NIH Implementation
NIH modular grants or similar grant instruments do not require line-item budgets. (Note: Rebudgeting authority may be used to charge administrative expenses not included in the approved budget if specific rebudgeting authority for clerical and administrative expenses is allowed by award and sponsor rebudgeting guidelines. See, for example, NIH administrative requirements.)
Stanford FAQs
- How does the integral definition change our current policy?
A project no longer needs to be identified as “major;” however, the administrative salary expense needs to be integral or essential to the project in order to be direct charged. It must also be included in the proposal budget and justification. Most of the other requirements for direct charging salary are the same as with major projects.
- What should be included in a budget justification for charging administrative/clerical salaries?
A description of administrator’s salary that is being proposed and what makes it integral to the sponsored project. This should include:
- a description of the administrator’s role
- how the administrator’s effort relates to and benefits the project
- the level of effort expressed as a percentage FTE or person months per sponsor instructions
- the time period(s) in which the person will be working
- any other information that will aid the sponsor in evaluating and funding the proposed salary.
NOTE: Although NIH modular grants or similar grant instruments do not require line-item justifications, the personnel, including administrative salaries, do need to be described in a modular budget’s justification.
When you prepare your PDRF in SeRA, there will be a question about whether the administrator’s salary is “integral” to the project. A “yes” response will trigger a flag is SeRA to indicate that the administrator’s salary is “integral.”
- Does the “integral” criteria apply to non-federal sponsored projects?
Most non-federal sponsors do not require the administrative activity to be integral. However, some non-federal sponsors may include such a requirement or the sponsor may incorporate OMB Uniform Guidance requirements. Check the terms and conditions of the award to determine if your non-federal projects have adopted the Uniform Guidance or the “integral” requirement.
- Is there a minimum threshold for charging administrative and clerical salaries in order for it to be considered integral?
No, but you must consider that there is a continuum in terms of the amount of effort devoted and charged to the sponsored project. The lower the percentage effort proposed, the more difficult it may be to document and justify the integral nature of the activity.
- Is an administrator’s review of quarterly expenditure statements or annual payroll distribution considered integral?
This activity would not be considered integral for most sponsored projects. This activity may be considered integral for program project grants, projects that involve multiple faculty and/or multiple institutions, or projects with significant administrative complexity.
- My project is funded by a non-federal sponsor. What administrative activities can I charge directly to my project?
You may charge any administrative activities and the related costs that provide benefit to the sponsored project and are within the terms and conditions of the sponsored agreement.
- What are some types of proposals at Stanford that might have administrative salary charges that would be considered integral?
Some examples include:
- Any grant mechanism that provides for an administrative core, such as NSF Engineering Research Centers, NIH program project grants, NIH Center grants such as the Spectrum Stanford Center for Clinical and Translational Research and Education, etc.
- Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
- Projects that require monitoring and management of multiple subawards and/or foreign subawards
- I budgeted for an administrator’s salary and the sponsor lined it out. Do I have to cost share the administrator’s salary if they will still perform the work?
No.
- If my project was classified as “major,” and additional funding is received on or after December 26, 2014, what should I do?
It will need to follow the definition of “integral” under the Uniform Guidance. If it previously met the major project criteria, it will most likely meet the “integral” requirement. (See Note re: PDRF flag under Q. 2.)
10. I am proposing a conference grant and I don't believe the resources provided by the Worklife Office will be sufficient. Can I budget for an administrator to expand on these resources?
Yes. Uniform Guidance allows for administrative salaries that are integral to the project and for the cost of identifying (but not providing) local dependent-care resources.
FAQs for Direct Charging Administrative Supplies
Charging administrative costs for technical purposes has not changed and does not require the project to be “major” nor the expenditure to be “integral.” The allocable (benefiting), allowable and reasonable criteria are the same.
- How will a reviewer know that the administrative items I’m charging to the project are allocable?
Since the benchmark is no longer project based (i.e., Major Project) but transaction based (i.e., allocable to the project) it is important to articulate its need and benefit to the project in the transaction, itself (e.g. purchase order, Pcard transaction, reimbursement, etc.) Of course, this is true for all transactions, but especially so for administrative-appearing items.
