News Items

... continued from Updates from the Director

Sorting Out Direct vs. Indirect Costs and How it Applies to your Project Budget
Given the extended nature of the economic slowdown, it is only natural to look for ways to fortify departmental budgets or reward staff that are "doing more with less." In some cases this can be done using an externally funded sponsored program; however, it is important to realize that not all expenses can be directly passed to a sponsored program.  

As you can see from the chart below, some "real costs" cannot be passed to a sponsor according to federal costing regulations. The costs in the right column are considered "indirect costs" because they generally cannot be accurately valued or documented as a direct cost to any given project. The university is compensated for expenses like copying, telephone, and clerical support though our negotiated in-direct cost rate that are applied to external projects.    

Given that these are "real costs" to a department and given that the indirect cost return to a department can be insufficient to provide for things like "additional clerical support," "general office supplies" and the like, the Office of Sponsored Programs is often pressured to include these costs in project budgets as direct costs. It should also be noted that sponsors recognize that this pressure is natural and have increased their scrutiny of budgets to identify this "double charging" (charging once as a direct cost and again through the indirect cost calculation). Sponsors are also increasing audit scrutiny in this area which can result in "disallowed expenses" that must be charged back to a department's budget or IDC recovery Department ID.

Accordingly, please recognize that when this office argues for removal of budget items for "copies" or "clerical support," OR argues for collection of full indirect costs, it is not because we believe those activities are free or that our indirect cost rate has no impact to a budget; it is because sponsors expect JMU to follow these costing standards and will penalize the university and the PI’s department for not following them. 

Typical Direct and Indirect Costs

Direct

Indirect

Salaries & Wages/Fringe Benefits Faculty, technicians, scientists, research assistants, postdoctoral associates, or other programmatic personnel who are necessary to accomplish the goals of the project. Computer Costs (software, supplies and services) Long Distance Telephone Charges Scientific & Technical Equipment Maintenance agreements - related to scientific and technical equipment Materials (including noncapitalized equipment) Participant Expenses (NSF awards "Participant Support Costs") Lab Supplies (items solely consumed by the project) Services Obtained: Animal Care Outside vendors Express mailing services Laboratory testing services Consultant/Professional services Subcontracts Human Subjects Fees Travel NOTE: Costs normally charged as indirect may be charged direct when: · There is a functional difference in the work performed by individuals in the same job classification · Size, nature and complexity goes well beyond normal departmental support · The cost is incurred for the sole benefit of a grant, e.g., mailing a progress report to a sponsor · Costs listed as "indirect" can be charged direct on nonfederal agreements.

Salaries & Wages/Fringe Benefits Clerical and administrative positions such as fiscal officers, accountants, secretaries, directors, vice presidents, president, office personnel, executive assistants, and administrators.     Telephone (data lines, equipment, recurring, installation and maintenance) Equipment (office and general purpose like copiers, fax) Janitorial & Sanitation Services (including hazardous waste) Repair & Maintenance (buildings, grounds, equipment, remodeling, etc.) Subscriptions, Library Books, Periodicals, etc. Postage Memberships Office Supplies Photocopy (for general office use) Utilities Recruitment Travel NOTE: Costs listed in "Direct" become indirect when they are for general institutional purposes or support multiple project/activities, and they cannot be identified with relative ease and with a high degree of accuracy with those projects/activities.

 

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... continued from the Compliance Corner

National Science Foundation, Other Nations Form Global Research Council, Release Merit Review Principles

Leaders of some 50 research councils worldwide, including the National Science Foundation (NSF), announced on May 15 the formation of the Global Research Council and the creation of a set of principles governing merit review that stress "expert assessment, transparency, impartiality, appropriateness, confidentiality, integrity and ethical consideration." The announcements were made following a two-day "inaugural Global Summit on Merit Review," held at NSF's headquarters in Arlington, Virginia. "NSF hosted members from G20/OECD (Organization for Economic Co-operation and Development) countries, which are typically most research intensive, and countries with emerging scientific enterprises, including those involved with the State Department Science Envoys program," the announcement said. "The merit review process, as practiced by NSF and other leading funding agencies, is recognized as an essential tool for evaluating scientific research. In releasing a set of common principles, the summit participants identified best practices and standards that will cultivate multinational research cooperation among countries and across continents." The principles and a video of the press conference are on NSF's website. The next global summit is scheduled for some time in 2013, to be "hosted" by officials from Germany and Brazil.

John Holdren, director of the Office of Science and Technology Policy, also weighed in on the creation of the common principles, terming the action a "significant" development that aligns with President Obama's 2009 call for "American scientists and engineers to work more closely with the international science community, even as he committed to boosting investment in domestic science and technology to new heights." The approved principles "are critical to putting the global research enterprise on a shared foundation that will not only enhance the quality of science but also bolster public trust in that science," Holdren said in a post on the OSTP blog co-authored with NSF Director Subra Suresh.

Links: http://www.nsf.gov/news/news_summ.jsp?cntn_id=124178&org=NSF&preview=false; http://www.whitehouse.gov/blog/2012/05/14/merit-review-ensuring-gold-standard-science-around-globe

 

Sponsored Programs Administration & Accounting