Ordinarily Unallowable Direct Costs

Many of the items presented below are typically supported by institutional facilities and administrative cost recoveries, therefore they are ordinarily not allowed as direct costs on federal projects. They are allowable on federal projects only if required for unusual circumstances or for non-routine activities as described in the project narrative and explicitly described in the budget narrative.

  • Salaries of Administrative and Clerical Personnel – The salaries of administrative and clerical personnel are normally treated as an indirect cost unless they meet the definition of “unlike purpose and circumstance” and are integral to the award. As stipulated in the Uniform Guidance, direct charging of administrative salaries is allowable when all of the following 4 conditions are met:
    • Administrative or clerical services are integral to a project or activity;
    • Individuals involved can be specifically identified with the project or activity;
    • Such expenses are explicitly included in the budget or have the prior written approval of the federal awarding agency; and
    • The costs are not also recovered as indirect costs.
    • NOTE:  if the item is not included in the awarded budget or the proposed budget narrative, OSP approval post award is required.
  • Advertising – Advertising is generally not allowable except for recruiting of personnel identified in the award or for communicating with the public on research results (outreach activities).
  • Food and Drink – Entertainment expenses, including meals and alcohol, are not allowed on federal awards.  Circumstances where food (beverages for breaks or meals) may be an allowable expense would include conferences or workshops that are documented by notices/invitations, a formal agenda and a participant list. Receptions at the end of a conference, seminar, or workshop are ordinarily not allowable on federal awards.  For non-federal awards, food or alcoholic beverages may be allowable if presented in the proposal’s budget and budget narrative, e.g. an award to support the annual meeting of a professional society and supported by source documentation or similar activity.
  • Communication Costs – Local calls, line installation, postage are not allowable unless essential for project objectives. Long distance calls are allowable to direct charge in support of project objectives.
  • Office Supplies – Office supplies and related items, as administrative items of cost, are ordinarily not allowable as direct costs unless required for unusual or other non-routine needs such as training manuals, large surveys, etc. The need for and basis for the costs of these items must be presented in the budget justification; there should also be clearly identifiable activities described in the project narrative.
  • General Purpose Instruments – The following items will ordinarily not be allowable as direct costs unless essential for the project, documented in budget narrative, and approved by OSP and the sponsor;
    • Personal Computers
    • Server
    • Cell Phones
    • Software Purchases
    • Furniture