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Guidelines for Justifying and Documenting Administrative Expenses

 

Background

As a recipient of Federal funds, UCI is required to propose, account for, and report costs in a consistent manner and in accordance with federal regulations and University policies. OMB Circular A-21 requires that administrative expenses shall normally be treated as Facilities and Administrative (F&A) costs.

Definitions

UCI Research Policy - Budgeting and Charging Administrative Expenses to Sponsored Projects defines certain terms, including the following, which are restated below for the convenience of the reader:

Administrative expenses include salaries and related benefits of those employees who perform administrative/clerical (non-technical) activities, and other non-salary administrative expenses incurred to support a project. Lists of the most common, routine administrative/clerical activities and non-salary administrative expenses are available in the Administrative/Clerical Salaries - Special Guidance and Non-Salary Administrative Expenses - Special Guidance sections of the Budget Development web page.

Special Circumstance exists when a project requires an extensive amount of administrative/clerical personnel support, or non-salary administrative expenses that are significantly greater than the routine level of support that is provided to every UCI sponsored project.

Major Project, as defined in OMB Circular A-21 and used in this policy, is a project that requires an extensive amount of administrative/clerical personnel support, which is significantly greater than the routine level of such services provided by academic departments.

Unlike Circumstance exists when the scope of the project requires non-salary administrative expenses that are significantly greater than the routine level of support provided to every UCI sponsored project.

Justifying Administrative Expenses

A. Administrative/Clerical Salaries

The following criteria must be met before administrative and/or clerical salaries are charged to a federal project:

  • It is necessary to incur the cost to perform the project's scope of work; and
  • The cost must be identifiable to the project with a high degree of accuracy; and
  • The proposal resulting in the award describes, in the budget justification, the project activities that satisfy the federal definition of Major Project and the budget explicitly includes administrative and clerical salaries (i.e., the individuals and/or positions providing administrative or clerical support must be specifically identified with the project activities); or
  • The sponsor's prior approval of rebudgeting is obtained, provided that the prior approval request submitted to, and approved by, the sponsor explicitly includes administrative and clerical salaries (i.e., the individuals and/or positions providing administrative or clerical support must be specifically identified with the project activities); or
  • The terms and conditions of the award transfers certain rebudgeting authority to UCI, provided that any such rebudgeting is approved at the appropriate level within UCI, that the delegated rebudgeting authority is not restricted in such a way as to prohibit the direct charging of administrative or clerical salaries, and that the project activities that satisfy the definition of Major Project are documented in the administering unit's award file; or
  • The award received by UCI was made in response to a modular grant application, provided that the award terms do not prohibit the direct charging of administrative or clerical salaries and that the project activities that satisfy the definition of Major Project are documented in the administering unit's award file.

B. Non-Salary Administrative Expenses

The following criteria must be met before non-salary administrative expenses are charged to a federal project:

  • It is necessary to incur the cost to perform the project's scope of work; and
  • The cost must be identifiable to the project with a high degree of accuracy; and
  • The proposal resulting in the award describes, in the budget justification, the project activities that satisfy the definition of Unlike Circumstance and the budget explicitly includes non-salary administrative expenses (i.e., such expenses are specifically identified with project activities); or
  • The sponsor's prior approval of rebudgeting is obtained, provided that the prior approval request submitted to, and approved by, the sponsor explicitly includes non-salary administrative costs (i.e., such expenses are specifically identified with the project activities); or
  • The terms and conditions of the award transfers certain rebudgeting authority to UCI, provided that any such rebudgeting is approved at the appropriate level within UCI, that the delegated rebudgeting authority is not restricted in such a way as to prohibit the direct charging of non-salary administrative expenses, and that the project activities that satisfy the definition of Unlike Circumstances are documented in the administering unit's award file; or
  • The award received by UCI was made in response to a modular grant application, provided that the award terms do not prohibit the direct charging of non-salary administrative costs and that the project activities that satisfy the definition of Unlike Circumstance are documented in the administering unit's award file.

Documenting Administrative Expenses

Administering units are responsible for maintaining and retaining (in accordance with the UCI Records Retention Schedule) all documentation that explains and justifies a determination that Major Projects and/or Unlike Circumstance pertained to a specific cost or group of costs charged to a sponsored agreement.

A. Administrative/Clerical Salaries

When direct charging administrative/clerical salaries, the following documentation is required:

  • Proposal Budget -- as described above in Section A of Justifying Administrative Expenses.
  • Administrative Approval (AA) Form -- check the Major Project box indicating that an administrative/clerical salary expense is included in the proposal budget. The signature of the Principal Investigator, Chair or Director, and Dean or Vice Chancellor serve to certify this determination.
  • Administering Unit Award File -- if administrative salaries are not included in the sponsor-approved budget, but are charged to a sponsored project (e.g., after post-award rebudgeting), the administering unit's award file must include a description of, and justification for, the specific administrative salaries. In addition, the award file must include the Principal Investigator's approval of such costs.
  • Personnel Activity Reports (PARs) -- all effort of administrative/clerical staff direct charged to a federal sponsored project must be reported and certified by the appropriate official.
  • Time sheet -- for staff employees (if required), a monthly time sheet should be prepared and signed by the employee and supervisor.

B. Non-Salary Administrative Expenses

When direct charging non-salary administrative expenses, the following documentation is required:

  • Budget Proposal -- as described above in Section B of Justifying Administrative Expenses.
  • Administrative Approval (AA) Form -- check the Unlike Circumstance box indicating that a non-salary administrative expense is included in the proposal budget. The signature of the Principal Investigator, Chair or Director, and Dean or Vice Chancellor serve to certify this determination.
  • Administering Unit Award File -- if a non-salary administrative expense was not included in the sponsor-approved budget, but is charged to a sponsored agreement (e.g., after post-award rebudgeting), the administering unit award file must include a description of, and justification for the specific non-salary administrative expense. In addition, the award file must include the Principal Investigator's approval of such costs.

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