# Spending Funds ## Spending Funds Research Finance ![Person pointing at computer screen ](/sites/g/files/omnuum5536/files/styles/hwp_28_10__1920x685/public/2025-07/AdobeStock_912183451.jpeg?itok=9mmOocYJ) ## expand\_more ## On This Page [Administrative Salaries](https://prod-fasresearchadministration.drupalsites.harvard.edu/spending-funds#administrative-salaries) [Cost Transfers](https://prod-fasresearchadministration.drupalsites.harvard.edu/spending-funds#cost) [Indirect Costs](#IDC) [Internal Billings](https://prod-fasresearchadministration.drupalsites.harvard.edu/spending-funds#internal_billing) [Supplementing Stipends](https://prod-fasresearchadministration.drupalsites.harvard.edu/spending-funds#stipends) [Travel and Entertainment](https://prod-fasresearchadministration.drupalsites.harvard.edu/spending-funds#travel) [Unallowable Costs](https://prod-fasresearchadministration.drupalsites.harvard.edu/spending-funds#unallowable_costs) ### Spending Sponsored Funds 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 cost principles which determine the appropriateness of listing an expense as a direct charge on a sponsored award: allowability, allocability, reasonableness, and consistency. More information can be found in the [University Guidelines for Federal Sponsored Expenditures](https://osp.finance.harvard.edu/sponsored-expenditures-guidelines). ### Roles and Responsibilities While research administrators play a key role in day-to-day financial oversight, Principal Investigators (PIs) are ultimately responsible for both the technical and financial management of their awards. PIs should work closely with their administrators to ensure all charges comply with sponsor requirements and Harvard policy. ![A group of people at a meeting table seen from above, wearing light-colored business shirts. The table is covered with reports, charts, a laptop displaying graphs, a tablet with a marketing projections chart, pens, notebooks, and sticky notes.](/sites/g/files/omnuum5536/files/styles/hwp_1_1__480x480/public/2025-08/banners3.jpg?h=1f33f440&itok=P4fQ-ORf) ### Administrative Salaries The University defines administrative and clerical personnel as those providing non-technical support for departmental, institute, or center activities, such as clerical support, financial management, procurement, business services, budgeting, and personnel management. [ Administrative Salaries arrow\_circle\_right ](https://osp.finance.harvard.edu/administrative-and-clerical-salaries-federal-awards) ![A woman writing in a notebook while studying at a table with a laptop.](/sites/g/files/omnuum5536/files/styles/hwp_1_1__480x480/public/2025-08/banners5.jpg?itok=zL0tQPRN) ## Cost Transfers In accordance with OMB costing principles, it is essential to explain and justify the transfer of charges onto federally funded sponsored awards when the original charge was previously recorded elsewhere on Harvard’s General Ledger. To ensure that cost transfers (CTs) comply with policy expectations, all CTs must be reviewed and approved by the department’s Lead Research Administrator before submission to FORA for review. [ Cost Transfer Policy arrow\_circle\_right ](https://osp.finance.harvard.edu/cost-transfer-policy) Open all sections Close all sections ### Submitting Cost Transfers to FORA expand\_more - When a CT is ready for submission, please email the required documentation to [FORA\_Cost\_Transfer@fas.harvard.edu](mailto:FORA_Cost_Transfer@fas.harvard.edu). - Include “**Under 90-day**” or “**Over 90-day**” in the subject line, as appropriate. - Approved CTs will be returned to the department with instructions to post the journal within 5 business days and to save the supporting documentation in GMAS. - Please note: CTs over 90 days must also be approved by OSP before posting. ### Cost Transfer Batch Naming Convention expand\_more **Please only use the CT batch naming convention for journals that fall under the CT policy (see below):** - **CT Journal Voucher Batch Name naming convention** "CT^TUB^DEPT^ Preparer's Initials^Description^Date (or Date Range) of original transaction(s)" **Please use JV batch naming conventions for regular journal entries that do NOT require cost transfer approval (see below):** - **Journal Voucher Batch Name naming convention** "JV^TUB^DEPT^ Preparer's Initials^Description^Date (or Date Range) of original transaction(s)" - **Transaction Line Description convention** Describe the journal, referencing the original expense. *Example: "Transfer June '07 salary to fund 123456"* ### Resources expand\_more - [Cost Transfer Policy](http://osp.finance.harvard.edu/cost-transfer-policy) - [Cost Transfer Process](https://osp.finance.harvard.edu/cost-transfer-process) - [Cost Transfer Request Form](/sites/g/files/omnuum5536/files/2025-12/cost_transfer_request_form_march_2025_final.pdf "Cost Transfer Request Form") - [Cost Transfer Summary Flowchart](/sites/g/files/omnuum5536/files/2025-12/cost_transfer_summary_flowchart_july_2020.pdf "Cost Transfer Summary Flowchart") - [Cost Transfer Summary Flowchart (Accessible version)](https://osp.finance.harvard.edu/cost-transfer-summary-flowchart) - [Cost Transfer Approvers](https://osp.finance.harvard.edu/cost-transfer-process#Approvers) - [Cost Transfer Calculator](/resource/cost-transfer-calculator "Cost Transfer Calculator") - [Ecrt Object Codes](/sites/g/files/omnuum5536/files/2025-12/ecrt_object_codes_harvard.pdf "eCRT Object Codes") - [Introduction to Cost Transfers Online Training](https://trainingportal.harvard.edu/Saba/Web_spf/NA1PRD0068/app/me/learningeventdetail/cours000000000040715?regId=regdw000000001771718 "Introduction to Cost Transfers Training") - [OSP Glossary](https://osp.finance.harvard.edu/research-administration-glossary) ## Indirect Costs Indirect costs (IDC) — also known as overhead or facilities and administrative (F&A) costs — are the essential costs of conducting sponsored activities that cannot be directly assigned to a specific project. These include expenses related to facilities, infrastructure, and administrative support that enable research and other sponsored programs to take place. IDC represents a share of real, ongoing costs such as building maintenance, utilities, IT infrastructure, and compliance services. Failing to attribute these costs to sponsored awards shifts the financial burden to other University-funded activities and detracts from core academic and research priorities. **Indirect Costs at Harvard** Harvard University is committed to recovering the full cost of facilities and administrative support provided to sponsored research, in line with sound financial management and responsible stewardship. These costs are recovered by applying negotiated indirect cost (IDC) rates to the direct costs of each award. Federal IDC rates are negotiated with the Department of Health and Human Services/Cost Allocation Services (DHHS/CAS) and are documented in three separate rate agreements: - [Harvard University – Cambridge, Allston, and the Wyss Institute (University Rate Area)](https://osp.finance.harvard.edu/sites/g/files/omnuum11801/files/2025-07/FY26_Final%20University%20Area%20Rate%20Agreement%20Signed.pdf) - [Harvard Medical School (including the Harvard School of Dental Medicine)](https://osp.finance.harvard.edu/sites/g/files/omnuum11801/files/2025-07/FY26_Harvard%20Medical%20School.3305.RA_.24FB_JJ%20Signature.pdf) - [Harvard T.H. Chan School of Public Health](https://osp.finance.harvard.edu/sites/g/files/omnuum11801/files/2025-07/FY26_Harvard%20School%20of%20Public%20Health%20signed%20Rate%20Agreement.pdf) The FAS uses the University Rate Area agreement for all federally sponsored research activities. For non-federal awards, Harvard's policy is to recover the maximum allowable indirect costs. **Resources:** - [PDF version of Policy for the Application of Indirect Costs to Sponsored Awards](https://osp.finance.harvard.edu/sites/g/files/omnuum11801/files/office-for-sponsored-programs/files/policy_for_the_application_of_indirect_costs_to_sponsored_awards_april_2019.pdf) - [F&A Rates - Federal Sponsors](https://osp.finance.harvard.edu/fa-cost-rates-federal-sponsors) - [Object Codes and IDC basis (August 2023)](https://osp.finance.harvard.edu/file_url/378) ## Internal Billings Proper accounting treatment for transactions is required where one Harvard unit bills another Harvard unit for goods or services, including internal billings from academic service centers and from central service units. See more here: [Internal Billings](https://policies.fad.harvard.edu/pages/internal-billing-transactions). ## Supplementing Stipends For FAS, questions around stipend supplementation or establishing a second salaried appointment for work on sponsored awards should follow the best practices outlined in the documents linked on this page. **FAS Guidance Documentation:** [FAS Guidance for Supplementing Stipends or Salaries from Sponsored Awards](/sites/g/files/omnuum5536/files/2026-04/Supplementing_stipends_or_salaries_from_sponsored_awards.pdf "Fellowship Stipends, Salaries, and Stipend Supplementation") **Background:** Harvard’s [Sponsored Expenditure Guidelines](https://osp.finance.harvard.edu/sponsored-expenditures-guidelines) state that “payments to supplement a fellowship are unallowable on any federal award.” This refers specifically to stipend supplementation, not salary through a secondary appointment. Fellowships often provide stipends to support postdoctoral fellows and graduate students, but these may fall short of Harvard’s full financial commitment as outlined in appointment or student support letters. To address this gap, departments may consider: - Supplementing stipends, when approrpiate and allowable - Creating a second salaried appointment, when stipend supplementation is not **Other Considerations:** In order to determine whether stipend supplementation or a second salaried appointment is the best approach for support, sponsored award terms and conditions dictated by the stipend source as well as the secondary source of support (stipend supplementation or second salaried appointment) must always be considered. Open all sections Close all sections ### FAS Guidance Documentation expand\_more [FAS Guidance for Supplementing Stipends or Salaries from Sponsored Awards](/sites/g/files/omnuum5536/files/2026-04/Supplementing_stipends_or_salaries_from_sponsored_awards.pdf "Fellowship Stipends, Salaries, and Stipend Supplementation") [FAS Faculty Affairs : FAS Guide to Research Appointments](https://prod-facultyresources.drupalsites.harvard.edu/sites/g/files/omnuum1751/files/2025-07/research_appointments_matrix%20-%20revised%207-15-25.pdf) ### Overview expand\_more Harvard’s [Sponsored Expenditure Guidelines](https://osp.finance.harvard.edu/sponsored-expenditures-guidelines) state that “payments to supplement a fellowship are unallowable on any federal award.” This refers specifically to stipend supplementation, not salary through a secondary appointment. Fellowships often provide stipends to support postdoctoral fellows and graduate students, but these may fall short of Harvard’s full financial commitment as outlined in appointment or student support letters. To address this gap, departments may consider: - Supplementing stipends, when appropriate and allowable - Creating a second salaried appointment, when stipend supplementation is not permitted ### What to Consider expand\_more In order to determine whether stipend supplementation or a second salaried appointment is the best approach for support, sponsored award terms and conditions dictated by the stipend source as well as the secondary source of support (stipend supplementation or second salaried appointment) must always be considered. ## Travel and Entertainment Travel charged to sponsored awards must comply with the Harvard Travel Policy and any sponsor-specific rules. Federal sponsors may impose more restrictive limits on airfare class, lodging, per diem, or international travel. [ Travel and Entertainment Policy arrow\_circle\_right ](https://osp.finance.harvard.edu/sponsored-travel-guidance) Open all sections Close all sections ### OMB Uniform Guidance expand\_more Travel expenses charged to federally sponsored projects must meet all three of the following criteria per [OMB Uniform Guidance 2 CFR 200.474](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E/subject-group-ECFRed1f39f9b3d4e72/section-200.474): - Allowable under both Uniform Guidance and the specific award terms - Allocable to the project with a high degree of accuracy - Reasonable, reflecting what a prudent person would pay under similar circumstances ### Fly America Act expand\_more Unallowable costs include commuting, limousines, non-travel status expenses, and airfare above standard economy, unless an approved exception applies. Federal awards also require travel on a U.S. flag carrier in accordance with the [Fly America Act](https://www.gsa.gov/policy-regulations/policy/travel-management-policy-overview/fly-america-act). ### Appendix G expand\_more Harvard’s revised University Travel Policy clarifies that business class or economy upgrades are not allowed on federal funds unless a documented exception is approved. See [Appendix G](https://hwpi.harvard.edu/os_fast/files/fad_policies/files/appendix_g_sponsored.pdf?__authen_application=CADM_HUIT_ATS_AWS_HWPI&__authen_time=Fri%20Feb%2005%2013%3A49%3A39%20EST%202016&__authen_pgp_signature=iQA/AwUAVrTuw8DVI4Mo/BzXEQIP0ACeOdvQgCogokgxOSkQyrcKHRZVN2QAn30l%0D%0AcEbhaONx2qBmMoAEJmebxWeG%0D%0A%3DATJi%0D%0A&__authen_pgp_version=5.0&__authen_huid=60713847&__authen_ip=10.1.5.24&pa=2091501865) for details on allowable airfare exceptions and additional guidance. ### Resources expand\_more - [Federal Lowest Economy Airfare Travel Reimbursement Exception Form (FATREF)](https://osp.finance.harvard.edu/sites/g/files/omnuum11801/files/2025-07/fly_america_travel_reimbursement_exception_form.pdf) - [Harvard Travel Policy](https://policies.fad.harvard.edu/pages/travel-0) - [Open Skies Agreement](https://www.gsa.gov/policy-regulations/policy/travel-management-policy-overview/fly-america-act#OSA) ##### Featured Policies [Harvard Travel Policy ](https://policies.fad.harvard.edu/pages/travel-0 "Harvard Travel Policy") [FAS Addendum to the Travel Policy](https://prod-fasresearchadministration.drupalsites.harvard.edu/) [Sponsored Travel Policy](https://prod-fasresearchadministration.drupalsites.harvard.edu/) [Fellowship Payments](https://policies.fad.harvard.edu/fellowships-vs-reimbursements) ## Unallowable Costs In accordance with federal costing principles and sponsor guidelines, certain costs are considered unallowable on sponsored awards. While most allowable expenses fall under direct cost categories—such as personnel, equipment, travel, supplies, publication of results, communications, consultants, and subcontracts—basic administrative and operational costs are generally unallowable as direct charges to federally sponsored awards. Unallowable costs are expenses that must not be charged, either directly or indirectly, to a sponsored award or a related cost share account. A cost is considered unallowable if it: - Does not comply with allowability, allocability, or reasonableness requirements outlined in the [OMB Uniform Guidance, Subpart E – Cost Principles](https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E). - Does not comply with the terms and conditions of the sponsored award or Harvard University policy. - Cannot be associated with a project with a high degree of accuracy. - Is for a restricted purchase made without proper authorization from the sponsor and/or the University. - Is not incurred during the approved award period. - Is not treated consistently with similar expenses for the same purpose and under like circumstances (e.g., recovering indirect costs as direct costs) Unallowable costs must be identified and excluded from all charges to sponsored projects to ensure compliance with sponsor and institutional requirements. **Common Unallowable Administrative and Operational Costs:** - Office supplies (e.g., pens, paper, folders) - Basic software not specific to the project - Local telephone charges, fax, and equipment line fees - General clerical or secretarial support - Personal laptops or desktop computers - Postage and express mail services - Hazardous waste disposal - Proposal preparation activities **Miscellaneous Unallowable Expenses:** - Alumnae/i events and activities - Commencement or convocation-related expenses - Fundraising activities or campaigns - Lobbying (at the federal, state, or local level) - Student events or activities - Bad debt or uncollected receivables - Marketing or promotional expenses - Fines, penalties, or legal settlements - Sales tax (when not reimbursable) - Goods or services for personal use **Entertainment-Related Unallowable Costs:** - Alcoholic beverages - Flowers or decorative items - Catering (unless specifically allowed and documented) - Gifts of any kind - Meals without a documented business purpose and list of attendees [ More about Unallowable Costs arrow\_circle\_right ](https://osp.finance.harvard.edu/unallowable-costs#:~:text=Unallowable%20costs%20must%20not%20be,Guidance%2C%20Subpart%20E%20%E2%80%93%20Cost%20Principles)