CONTENTS

Direct costs: Those categories that have clearly identified cost elements, designated by type or function. These types include personnel and non-personnel items.

Facilities and Administrative Costs (F&A): Institutional or infrastructure categories that are apportioned a cost factor based on federal guidelines for allowable costs elements. Costs are typically expressed as a rate, based on a pool of direct cost items, for example, Modified Total Direct Costs (MTDC). The University of Pittsburgh Controller's Office issues an annual statement confirming the negotiated F&A costs schedule. Currently applicable rates are provided below:
Actual F&A Rates

Personnel: A detailed cost element reflecting a salary or wage basis paid to each class of individual employed on a project. All salaries for personnel are expressed as a percentage of effort. Various sponsor guidelines may limit the percentage effort charged to a sponsored program, place ceilings on the maximum salary base used to calculate a fraction of salary requested, or place other constraints on the types of personnel supported under a particular program. Personnel classifications include senior project individuals, technical staff, administrative/clerical staff, and various types of trainees (post-doctoral fellows, graduate students, research associates).

Federal funding agencies also limit the direct cost budgeting of administrative or clerical staff charged to sponsored accounts. Secretarial and administrative support are part of the F&A costs. If you are now charging these items as direct cost items to your ongoing research projects, or if you are planning to include these costs in future research applications (proposals), you must be sure that they are project specific and can be tied back to the specific project(s) and/or proposal(s). Charging these items as direct costs when they are not project specific will result in the University's non-compliance with OMB Circular a-21, section J.F6(B) and with the cost accounting standards.

A budget narrative explaining individual budget elements should accompany the budget schedules. For future year projections, specific agencies prescribe that certain modest inflation factors be used. Project leaders are cautioned to consult with Office of Research staff or agency contacts prior to using 'rule of thumb' inflation factors.

Principal Investigator: The lead person charged with responsibility for technical project direction and oversight. May be assisted by one or more Co-PIs and/or Co-Investigators.

Fringe Benefits: Non-cash compensation provided to employees pertaining to mandated or institutional provisions. Examples, usually expressed as percentage of the wage or salary base, reflect a composite rate that includes incremental factors for social security, health insurance, liability insurance, workman's compensation, and related factors. For FY 2004, and beyond, rates are differentiated as follows:
Actual Fringe Benefit Rates

Tuition and fees: Project designers and budget planners must recognize the distinction between students as trainees (their primary responsibility) and as employees. As employees, individuals have specific task responsibilities in addition to their studies. Tuition must be correctly identified as Graduate Student Fringe Benefits for each individual.

Typically, training programs involving students as trainees only pay 8% F&A costs. Accordingly, for such training programs, you should budget actual tuition costs and fees, at the appropriate rates.

Equipment Defined as an article of nonexpendable, tangible personal property, having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. Capital expenditures equal to or exceeding $5,000 should be charged to the capital subcode series 6100-6199. Equipment costing between $2,000 and $4,999.99 in sponsored budgets should be charged to the applicable non-capital expense subcodes and draw overhead based on the effective F&A rate.

Consultant costs: Defined as non-institutional employees retained for a short duration of time for their expertise. Typically, consultants are paid a per diem maximum, per federal guidelines; otherwise, an appropriate fee for a limited term of service commensurate with the market or specialty. Extended-term consultancies may be subject to institutional or sponsor restrictions, or force a change of classification to employee status. See especially the University of Pittsburgh Handbook for Faculty or Staff, as appropriate.

Supplies: Any category of expendable material required as an essential inventory item for the conduct of a particular project. May include scientific or laboratory supplies, laboratory animals, chemicals and other disposable items. General office supplies are part of the F&A costs and should not be used anywhere in the proposal, including the budget justification. You must indicate that they are project specific.

Travel: Cost details are usually itemized on a per trip basis; include air or ground transportation and per diem travel expenses. The destination, purpose, and number of travelers for each trip should be identified. Economy or lowest available fare class must be utilized. Per diem and meal allowance rates follow federal guidelines for geographic sites. Please refer to University of Pittsburgh Travel Policy 05-07-01. [Link to the Pitt Travel policy]

The standard IRS mileage allowance for the business use of personal automobiles and for updates of one-way mileage from Oakland to some popular business destinations for University of Pittsburgh faculty and staff, go to http://www.pts.pitt.edu/Travel/common/mileage.html

Alterations and renovations: Specific facilities costs required to modify or update dedicated space for the planned project. General construction costs are typically not supported.

Other expenses: Itemized by category or unit cost. Examples include publication costs, page charges, computing charges, rental or lease charges, equipment maintenance contracts, long-distance phone charges, and modest fee-for-service contracts. General telephone charges and postage, are part of the F&A costs and should not be used anywhere in the proposal, including the budget justification. You must indicate that they are project specific.

Consortium or Contractual Costs: A cost item that is the aggregate value of project performance or service to be rendered by other institutional partners. These aggregate charges must in turn be supported by detailed cost breakouts for each collaborating institution. This cost breakout should be accompanied by the signed authorization for the collaborating institution(s), and submitted to the Office of Research along with the complete proposal transmittal materials. Subject to award action, the University of Pittsburgh, as the prime awardee, will issue a subcontract document to the collaborating institution(s). Subcontract costs in excess of the first $25,000 are not charged F&A costs. Assess F&A Costs on the first $25,000 for each subcontract (this does not mean for each year). Do not apply F&A Costs to any portion of a subcontract with Carnegie Mellon University (see below).

Research collaborations with colleagues at Carnegie Mellon University continue to be fostered and supported. To clarify the current grants administration procedure with regard to such collaborations, staff and faculty should note the following:

• Faculty whose primary employer is the University of Pittsburgh should continue to submit proposals through the established sponsored programs transmittal procedures, in cooperation with the Office of Research.
  
• Faculty whose primary employer is Carnegie Mellon University should submit their proposal as a subcomponent first through the CMU sponsored research office.
  
• Subcontracts between the University of Pittsburgh and CMU shall incorporate their respective institution's cost structures, including appropriate direct costs and established federal Indirect Cost Rates. However, as a reciprocal measure between the two institutions, subcontracts are exempt from the normally assessed indirect cost on the first $25,000 of each subcontract.

Commitments of real resources (institutional funds, personnel, facilities or equipment) involving such collaborations must be appropriately documented. General statements concerning such commitments will be scrutinized in the proposal review process.

Any question concerning these procedures should be referred to your constituency's Grants and Contracts Officer.

Requirements for Subcontractors

A. NSF - Institutional Requirements

1. Cover Page or Letter of Intent signed by Mr. DiPalma’s counter part at the subcontracting institution

2. Work Statement

3. Signed NSF Budget Pages

4. Only University of Pittsburgh employees can be listed on the NSF Cover Page

B. NSF - Agency Requirements

1. Budget pages must be submitted electronically with the proposal

C. NIH - Non Modular Requirements

1. Statement of Intent to Enter into a Consortium Agreement or the Face Page

2. Budget

3. Budget Justification

4. Curriculum Vitae

5. Checklist

6. Other Support

7. Scope of Work

8. Only University of Pittsburgh employees can be listed under personnel on an NIH cover page

D. NIH – Modular

1. Letter of Intent to Enter into a Consortium Agreement

2. Budget Justification

3. Year one detailed budget

4. Summary budget page

5. Checklist page

Be sure to include an F&A Cost Calculation Page with the Checklist Page. NIH wants the base, rate, amount and exclusions for each year. (Never List tuition remission as an exclusion. It should be listed as GSR Fringe Benefits).

Cost sharing: Some federal programs require cost sharing, i.e., some contribution, usually at a nominal rate, to total project costs by the institution. In many circumstances, cost sharing is merely desirable or requested by a program officer, but not mandated under the terms of the particular program. Cost sharing is a REAL cost. It should never be included in a proposal unless required by a sponsor and then, only to the percentage that is required by the sponsor. Usually, cost sharing takes the form of contributed time for project personnel, already paid by unit accounts. Project directors are cautioned that mandatory cost sharing will be audited, so that documentation must be as clear as for the sponsor-portion of the budget. The ledger source to be charged the "real dollar" matching funds must be clearly identified.

For projects that do not recover the full F&A cost rate, the unrecovered difference may be shown as part of the cost-sharing budget. The unrecovered difference is calculated by comparing the difference between the full institutional F&A cost rate charged to the project, and the limited dollar amount or rate that the sponsor will pay.