The Post Award Team is committed to supporting the departments of the Faculty of Arts and Sciences and School of Engineering and Applied Sciences in their management of sponsored funds. In partnership with researchers, departmental administrators, central administrators, and the Office for Sponsored Programs, we support the policies and procedures that enable Harvard to be compliant with the regulations and requirements of our sponsors.
One of the most important aspects of grant administration is the proper expenditure of funds. Sponsored funds can be used to defray most if not all of the costs of doing research. It is imperative, however, to abide by guidelines that specify those expenses that should be listed as direct costs on federal awards, those that should be reimbursed through indirect cost recovery, and those that are not eligible for reimbursement. PIs are ultimately responsible for financial management as well as technical project management. PIs and their research administrative staff should all be aware of the following cost principles, outlined in OMB Circular A-21, which determine the appropriateness of listing an expense as a direct charge on a sponsored award: allowability, allocability, reasonableness, and consistency. More information can also be found in the Guidelines for Federal Sponsored Expenditures.
- Allowability: The permissibility of charging an expense directly to a sponsored research account depends on whether the expense meets federal grant criteria described in OMB circulars, Harvard policies, and whether it is included in the budget submitted to the sponsor.
- Allocability: If a cost is necessary for the performance of a particular research project and can be identified with the project with a high degree of accuracy, it is “allocable” to that project. If a cost benefits two or more interrelated projects in proportions that cannot be accurately determined, the costs may be assigned to benefitted projects using a documented allocation methodology that represents a reasonable approximation of the benefit to each project.
- Reasonableness: Charges must be “reasonable,” i.e., in line with what a prudent person would pay for a similar item or service under similar circumstances.
Consistency: All costs incurred for the same purpose, in like circumstances, are either direct costs only or indirect (F&A) costs only.
- Direct Costs are costs that can be identified specifically with a particular sponsored project with a high degree of accuracy ,i.e., salary and lab supplies
- Indirect Costs are costs that are incurred for common or joint objectives and therefore cannot be identify readily and specifically with a particular sponsored project, instructional Activity or any other institutional Activity i.e. office supplies and postage