Direct costs

In accordance with the ASU Policy on Consistent Treatment of Direct and Facilities & Administrative costs (also referred to as the ASU costing policy), direct costs are those costs that can be identified specifically with a particular sponsored project, or that can be directly assigned to such activities easily with a high degree of accuracy (reference OMB Circular A-21, D.1.) Direct costs may include salaries, fringe benefits, equipment, travel, subcontracts, tuition, and operations as described below.

Salary

Normally only salary for faculty, technicians, research associates and assistants, post doctoral associates and other technical or programmatic personnel that are necessary to meet the goals of the project are allowed as direct costs.

List the amount of time to be spent by each ASU employee who will work on the project and the rate of pay.

Compensation on sponsored projects must not exceed a faculty member’s authorized base rate of pay at ASU.

Time can be shown in percent of full-time effort or in person-hours, -days, or -weeks or -months.  Percent of full-time effort or months is the preferred method because hours, days and weeks vary by pay period, and using those units of measurement can create some discrepancies in budgeting estimates versus actual costs. See person-months calculator.

New job classifications and compensations must conform to ASU Human Resources classifications.

Observe the current NIH annual salary rate limitation. For FY2009 awards, effective 1/1/09 through 12/31/09 the full time, 12 month appointment rate is $196,700. For complete instruction, including calculation examples, see the NIH release at http://grants.nih.gov/grants/guide/notice-files/NOT-OD-09-069.html. See additional rate information for previous fiscal year awards at http://grants.nih.gov/grants/policy/salcap_summary.htm.

Use a suggested annual escalation factor of 4%, except NIH which allows 3%, starting on August 16 for AY appointments and July 1 for fiscal year appointments.

Budgeting for administrative/clerical support is allowed only if an “unlike circumstance” exists as described in the RSP 508-01, Charging Direct and Facilities & Administrative Costs to Sponsored Projects, and the inclusion of such costs is supported by a CAS Exception Form and is also justified in the budget narrative.

Budget undergraduate student wages at rates between ASU's minimum wage of $6.90 per hour and the ASU maximum of $15.00 per hour.  Increases may be added based on experience.  Contact Student Employment Office at 5-5186 for further information or go to http://www.asu.edu/aad/manuals/usi/usi305-01.html.

Budget Graduate Research Assistant/Associate salaries within the Arizona Board of Regents range as set by each college.  Contact your college’s Business Manager for the approved rates.  Your SPO may also be able to provide rates or view the GRA Rates Word Document.

Employee related expenses (ERE, also called Fringe Benefits)

7/21/09: Current rates can be found in the PowerPoint from the most recent Q&A session (ERE rates are on slide 2, tuition is on slides 3 and 4). Please also see the Financial Services Newsletter.

Operations

Normally, costs such as office supplies and routine postage are considered F&A (indirect) costs and can only be budgeted as direct if an “unlike circumstance” exists as described in the RSP 508-01, Charging Direct and Facilities & Administrative Costs to Sponsored Projects.  If "unlike circumstances" exist, completion of the CAS Exception Form and a justification in the budget narrative are required. Refer to http://www.asu.edu/fs/advantage/ExpCodes2.html.

Travel

Follow ASU Travel Policy FIN 500 to budget travel expenses.  There are seven established per diem rates, ranging from $29.50-$40 per day, depending on the travel destination.  Lodging also varies according to travel destination.  The reimbursement structure and the Meals/Lodging Index are published in FIN 509 and are available on the internet at http://www.asu.edu/fs/travel/traveln.html or http://www.policyworks.gov/org/main/mt/homepage/mtt/perdiem/travel.htm (direct link). 

Transportation equals the estimated round-trip airfare, or $.445 per mile (effective 11/15/06) if driving is appropriate.  Proposed travel should include location, purpose, and cost.  Foreign travel should be budgeted separately.

Tuition and fees

For complete tuition and fee information, see http://www.asu.edu/sbs/tuition_semester_selection.html. Tuition and fees should be budgeted in the “Other” category.  Tuition remission is NOT subject to F&A (indirect costs). Tuition remission must be charged in proportion to the salary of the GRA.  The tuition amount below assumes a GRA effort of 50%.

NOTE: All amounts shown in the Tuition and Fees Schedules or in other University publications or web pages represent tuition and fees as currently approved. However, Arizona State University reserves the right to increase or modify tuition and fees without prior notice, upon approval by the Arizona Board of Regents or as otherwise consistent with Board policy and to make such modifications applicable to students enrolled at ASU at that time as well as to incoming students. In addition, all tuition amounts and fees are subject to change at any time for correction of errors.

*Noncompeting continuations should budget tuition as part of ERE.  All other applications, including those pending award, where a revised budget is requested by the sponsor, should budget tuition separately from ERE.
**Escalate tuition at 8% per year for out years.

Capital equipment

Separately list any major equipment purchase of $5,000 or more (effective 7/1/03).  Include an additional 7% for in-state sales tax or 5% out-of-state use tax (exclusive of R & D equipment qualifying for tax exemption) plus any applicable shipping, insurance, and installation charges.  These costs cannot, however, be considered in determining whether an item is capitalized as equipment.  Equipment rental should be listed as operational costs.  Computer software is not considered as capital unless valued in excess of $50,000.  Exception: Some sponsors (such as DOE, Sandia, etc.) do consider software as capital.  Including the basis of the equipment figures, telephone quotes, vendor catalog prices or bids strengthens capital budget requests.  Facility renovations equal to or in excess of $100,000 are capitalized (effective 7/1/03).

Facilities & administrative (F&A) costs

Facilities & Administrative (F&A) costs are those costs that are incurred for common or joint objectives and therefore cannot be identified readily or specifically with a particular sponsored project normally including most administrative/clerical salaries, office supplies, basic telephone service, and routine postage in addition to other indirect costs (OMB Circular A-21.E.1)

Calculation

When full F&A costs are allowable, apply the appropriate F&A rate to the modified total direct costs (MTDC) base.  Items included in the MTDC base are:

• Salaries and wages
• Fringe benefits
• Travel
• Operations (computer software, copy services, consultant services, materials and lab supplies, office supplies (if allowed), publication/page charges, telephone/mailing costs, and subcontracts (first $25,000 only)

Items not in the MTDC base are:
Student and participant support costs (including stipends, tuition, dependency allowances) for scholarships and fellowships. Refer to http://www.asu.edu/fs/advantage/ExpCodes2.html

• Tuition Remission
• Capital equipment (items over $5,000)
• Subcontracts over the first $25,000
• Rental/maintenance of off-campus space
• Patient care fees

If the rate used is less than the University’s negotiated rate, F&A costs should be calculated on total direct costs, versus modified total direct costs.  Contact your ORSPA site officer for assistance.

Rates

Set by the U.S. Dept. of Health & Human Services agreement dated 04/30/07.

As of August 14, 2009, the F&A rate to be charged to for-profit industry sponsors is 62.5%. This is a reduced rate from our fully burdened rate. If the sponsored project is funded via an industry sponsor who is receiving funds from a federal sponsor then the current federally negotiated rate applies as defined in the Facilities and Administration rate agreement.