Other Direct Costs

Other Direct Costs

Other direct costs can be a catch all for costing that does not easily belong in any of the other major cost categories. Often they are contracted services rather than supplies, travel, equipment or labor related. They include such costs as:

• Fee for service costs
• Participant support costs
• Maintenance contracts
• Software licenses
• Tuition
• Telephone service

Fee for Service Costs

A fee-for-service cost is when a vendor provides a service for a set fee according to a published rate schedule routinely charged for same or similar items to all potential customers.

• Examples of fee-for-services have included items such as assay services, catscan services, MRI facilities use, aerial photography, etc.
• Provide OPAS a copy of the published rate sheet by loading it to the “Internal Attachments” section in Kuali.
• In contrast to a subrecipient, the vendor would not be responsible for conducting a portion of the research but rather they simply provide a defined service for a set, published fee.
• Fee-for-service items should be budgeted under "Other Direct Cost” and not blended with “Materials and Supplies”.
• If the cost is a university-approved fee, the budget justification must show the facilities/service being utilized along with the actual university-approved fee per unit cost. Load a copy of the university-approved rate sheet to the “Internal Attachments” section in Kuali.

Human Subject Compensation (Research Participation Incentives)

Payment or non-monetary reward to subjects as remuneration for time and inconvenience of participation in research studies, as well as an incentive to participate. Compensation can include monetary (cash, gift cards, vouchers, etc.) and/or non-monetary (gifts/promotional items, course credit, extra credit, etc.) enumeration. Such compensation is subject to limits as outlined in the university's Business and Travel Expense Policy and Standards. See also the Controller's Office guidance on compensating human subjects. When budgeted into a grant or contract budget, such costs are treated as other direct costs and included in the direct cost base when calculating indirect costs.

 All research involving human subjects must be reviewed by the campus Institutional Review Board (IRB).  Approval must be obtained prior to any involvement of subjects.

Participant Support Costs

Participant support costs means direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences, or training projects (2 CFR Part 200.75).

• Costs that qualify as “participant support” are exempt from indirect costs.
• Participant support costs are often subject to special sponsor regulations, in particular, the NSF –excerpted from the “Grant Proposal Guide”:
  
  “This budget category refers to costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with NSF sponsored conferences or training projects. Any additional categories of participant support costs other than those described in 2 CFR § 200.75 (such as incentives, gifts, souvenirs, t-shirts and memorabilia), must be justified in the budget justification, and such costs will be closely scrutinized by NSF. (See also GPG Chapter II.D.9) For some educational projects conducted at local school districts, however, the participants being trained are employees. In such cases, the costs must be classified as participant support if payment is made through a stipend or training allowance method. The school district must have an accounting mechanism in place (i.e., sub-account code) to differentiate between regular salary and stipend payments.”
   
• In contrast with the NSF, NIH states that unless specifically listed as an allowable cost in the Program Announcement, NIH and other PHS agencies applicants should not budget Participant Support Costs. Keep this in mind and note the qualifying criteria in the definition provided above from 2 CFR Part 200.75.
• UMass requires projects to track participant support costs in a separate sub-account
• The transfer of funds budgeted for participant support costs, as defined in the Uniform Guidance (§200.75), to other categories of expense requires sponsor approval.

What does not qualify as participant support costs

• Honoraria for guest speaker at a conference, symposium or workshop
• Human Subjects – Incentive payments to encourage individuals to participate in research study and provide private data/information through intervention or interaction.  This includes participation in surveys and interviews.
• Fellowships – financial support for a postdoctoral fellow to do things such as attend conferences or workshops
• Payments to university employees (faculty, staff, and student employee on the award) or subrecipients
• Project organizer, consultant, facilitator, or coordinator of the workshop, conference, training session
• Speaker fees (unless the majority of time is spent as a participant and not a speaker)
• Rental fees, catering and general supplies

Maintenance Contracts

Budgeted costs must be Reasonable, Allowable, and Allocable (RAA).

• Reasonable: Basis of cost should be provided in the budget justification. The cost should be based on existing costs for same or similar contracts, quotes, or on-line catalog prices. Note basis in your budget justification.
• Allocable: Cost must accrue to the budget based on benefit to the project for the covered item. If the equipment will be used 100% on the project, 100% of the maintenance can be charged to the sponsor. Provide a rationale for proportional usage and corresponding cost. See Budget Justification.

If budgeting based on expected proportional use, split funding generally should not fall below a reasonable level whereby multiple investigators share the cost in a manner that would suggest the need to create a fee based account for shared equipment use.

Split funding maintenance contracts should generally only occur on large laboratory equipment, not small equipment.

Software Licenses

Budgeted costs must be Reasonable, Allowable, and Allocable (RAA).

• Reasonable: Basis of cost should be provided in the Budget Justification. The cost should be based on existing costs for same or similar contracts, quotes, or on-line catalog prices. Note basis in your Budget Justification
• Allocable: Cost must accrue to the budget based on benefit to the project for the covered item.  Software cannot be split funded with other accounts. The budget justification should name the software product; note that it is dedicated to the project; and provide a strong justification for why it is needed especially emphasizing what aspect of the project will benefit from its use. The software should not be general purpose software but rather specialized in a manner that supports the specific technical aims of the project.

Do not split fund software. It must be dedicated exclusively to the aims of the proposed project.

Tuition Charge

A tuition charge (TC) is assessed on working Graduate Research Assistant (GRA) appointments.

• TC is budgeted on an hourly basis during the academic year up to 760 hours per academic year (20 hrs. a week for 38 weeks as outlined in the GEO/university contract definition of "full-time"), per GRA. Summer effort is exempt.
• For current rates, see the Fact Sheet
• TC is always exempt from indirect costs.
• If tuition is not allowed by the sponsor and that restriction is clearly noted in their guidelines, TC cost cannot be budgeted.
• Use the Salary Guide (Excel) found here.

Telephone Service

Toll calls are allowable if they are allocable to the project and justified in the budget justification. Cell phones are generally not allowable due to difficulties of assuring allocability. They are however allowed in extremely unique situations.

Further guidance:

• Explain why these devices are necessary for the performance of grant work or are necessary in order to accomplish the programmatic objectives of the project; clarify how they are for business, not personal use.
• Is there an extensive and continual need for such devices throughout the project life, rather than simply an infrequent or periodic occurrence?
• Demonstrate that the charges are easily allocable to the grant: substantiate that the cost will be solely consumed by, and solely benefit, the sponsored agreement or can be easily allocated in some manner.
• Substantiate that these devices will be used for project work at a remote site inaccessible to normal departmental administrative support or normal phone facilities.

Charges for land lines are also not generally allowable except for extremely unique situations. The land line must be dedicated to the project and a strong justification provided that ties back to the technical needs of the project and specific aims of the project.