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.

Administrative Salaries
The University defines administrative and clerical personnel as providing non-technical supporting services that benefit departmental, institute, or center activities or objectives, including functions such as clerical support, financial management, procurement of materials and services, business services, budget and planning, and personnel management.

Cost Transfers
In accordance with OMB costing principles, it is necessary to explain and justify transfers of charges onto federally-funded sponsored awards, where the original charge was previously recorded elsewhere on Harvard's General Ledger.

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.

Travel and Entertainment
Domestic and foreign travel charged to sponsored projects should follow the guidelines set forth by the Harvard Travel policy, unless federal regulations or the funding agency imposes greater restrictions.

Unallowable Costs
Most allowable costs fall into the broad direct cost categories of personnel, equipment, travel, supplies, publication of results, communication, consultants, and subcontracts. Basic Administrative and Operational costs are typically unallowable as direct costs on sponsored awards.