Direct and Indirect Costs

Direct costs include costs related to salaries, fringe benefits, capital expenditures, software, travel, communication, equipment, materials, student stipends, and supplies.


Senior Personnel Salaries

      • Principal Investigator (PI) and co‐Principal Investigators (co‐PIs) that are employed by the University would be accounted for in this category.
      • Percentage of effort or person‐months (as required by sponsor) should be noted for all senior personnel on the project.
      • Many agencies including the National Institutes of Health and NASA do not recognize the concept of co‐PI but rather to personnel in these positions as co‐Investigators (co‐I).

Other Personnel Salaries

      • Employees of the University who will be working on the project, aside from the PI and co‐PIs, are included in this category.
      • This category may include people who are currently employed by the University as well as those that will be hired when the project is awarded.
      • Classifications for Other Personnel may include other faculty involved on the project, professional staff such as a project director or data analyst, postdoctoral fellows, graduate and undergraduate research assistants.
      • Percentage of effort or person‐months (as required by sponsor) should be noted for all employees on the project.

Fringe Benefits

      • All persons paid to perform work on a grant or contract who are University employees are entitled to receive fringe benefits.
      • Fringe benefit rates are updated periodically and are available on the Sponsored Programs website.

Capital Expenditures

      • This is an unusual expenditure on grants and contracts, as many grants don’t allow for this type of cost.
      • Costs associated with alteration or renovation of buildings would fall under this category.
      • Any costs of this nature should be fully justified.

Communication Charges

      • This category usually consists of long‐distance telephone charges directly associated with the project. For example, projects involving telephone surveys of participants throughout the United States would be an allowable charge.
      • Other potential items under this category may include mobile telephones or other electronic devices under special circumstances. For example, if the proposed project involves project-related travel in rural areas and mobile telephones are necessary to maintain contact with project personnel, this may be an allowable expense. Expenses of this nature will need to be carefully justified in the proposal and specifically approved by the sponsor.

Computer Software

      • Specialized software necessary to the project should be itemized and justified.
      • General purpose software (e.g., word processing or spreadsheet software) is not an allowable expense on grants and contracts.


      • A consultant is an individual who will provide professional advice or services for the project not available elsewhere within the University.
      • A consultant cannot be an employee of the University. Employees of the university can perform these services but must be listed under Other Personnel if across departmental or college lines.
      • A person in a consultant status is not supervised by project personnel.
      • For budgeting purposes, sponsors require specifics as to what tasks the consultant will perform on the project as well as the consultant’s daily consulting rate, travel costs, etc.
      • Additional information necessary from a consultant includes a signed letter and CV.

Equipment, Permanent ($5,000 or over per unit)

      • Equipment is defined as any item costing $5,000 or more and having a useful life of more than one year.
      • Freight charges, installation costs, sub-components or peripherals needed to make the equipment operational should be considered as part of the equipment cost.
      • Sponsors generally require manufacturer quotes as part of the proposal.

Equipment, Rental Fees

      • Costs associated with rental of equipment directly related to the proposed project should be outlined and fully justified.

Materials and Supplies

      • This line item details tangible materials and supplies costing less than $5,000 per unit that are for project specific purposes.
      • Agencies generally require itemization of proposed purchases under this category.
      • Most computing equipment now falls under this category. Note: purchase of general computing equipment is not an allowable cost on federal grants and contracts; rather, purchase of computing equipment requires a clear explanation of its importance to the project (for example, the project involves large datasets and requires a high‐end workstation for analysis).

Participant Support Costs

      • This category includes items such as research subject payments or incentives.
      • The methods for providing such incentives should be outlined thoroughly in the budget justification.
      • Some sponsors, most notably the National Science Foundation, use this category to denote project trainees or workshop attendees, and there are specific costs associated such as stipends, travel, and material costs for participants.


      • General postage costs are not allowable on federal grants and contracts.
      • Activities specific to the project such as a mail survey or outreach efforts to participants and their families would qualify postage as a legitimate grant or contract charge.

Photocopy Charges

      • General copying charges are not allowable on federal grants and contracts.
      • Copying charges for materials directly related to the project, such as training materials or survey instruments, would be allowable charges.

Publication/Page Charges

      • Costs of producing publications required by the sponsor such as monographs would be under this category.
      • Typical costs also included in this category are graphic design, photography, journal page charges and other vehicles for dissemination of research results.

Rental Costs

      • Costs of renting space to house a project that cannot be accommodated on the UCA campus may be requested.
      • An example would be a sponsored project involving an outreach project that will be housed in a local facility to increase subject participation where the facility requires payment for such space, which would be, with agency approval, an allowable expense.
      • The rationale for this item should be very apparent.


      • Stipends are monetary assistance provided to students who have no obligation to work for the money they are provided.
      • Note that stipends are only allowed by the University when required by the sponsor; the vast majority of students involved as research assistants on sponsored programs will be paid a salary rather than a stipend.


      • If a collaborator is located at another institution, the usual method of inclusion on the project is a subcontract.
      • Sponsors typically require a subcontractor scope of work, budget and budget justification for the portion of the project to be conducted by the subcontractor.
      • The University requires a letter of collaboration signed by the subcontracting institution’s authorized representative, the detailed budget and justification and a scope of work outlining the subcontractor’s role on the project.
      • Proposals typically include the subcontractor key personnel CVs.


      • Domestic and foreign travel associated with the proposed project should be specified.
      • If foreign travel is not specified in the budget, the University must request prior approval for such travel from the sponsor.
      • Some agencies define Mexico and/or Canada as domestic travel.
      • Typical travel costs supported by sponsors include airfare, lodging and incidental expenses (per diem), conference registration costs, and local travel costs such as car rental.
      • It is highly recommended that principal investigators be as specific as possible when providing justification for proposed travel costs (for example, discuss the professional conferences that fit best in terms of disseminating information about the project, where they will be occurring and costs associated with each.) Travel is often one of the first line items sponsors automatically reduce, but a complete explanation of the necessity to the project may convince the sponsor otherwise.


      • Tuition assistance can be included in the budget for graduate and undergraduate research assistants on the project when allowed by the sponsor.
      • The University, as a state agency, is prohibited from paying tuition costs for international and out‐of‐state students.
      • Specify maximum credit hours per semester per student.


Indirect costs [aka Facilities and Administrative (F&A), Overhead, Tax] include the costs of managing a grant in an university setting.

UCA’s federally negotiated Facilities and Administrative Costs rate has been negotiated through the U.S. Department of Health and Human Services. UCA’s rate is currently 32.59% of all salaries and wages (including graduate and undergraduate research assistants).

If an agency has a published, consistently applied policy dictating a rate lower than UCA’s authorized rate, UCA will honor that rate. Be certain to supply the sponsor documentation of this policy when routing your proposal internally through Cayuse 424.


Latest Update: February 2018
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