What is Sponsored Management Solutions and Support?
Sponsored Management Solutions and Support (SMSS) is an ASU service center, providing central administrative, compliance, and oversight functions that allow ASU to apply for, receive, and manage sponsored funding responsibly. Activities include maintaining financial and compliance systems, managing audits and certifications, reviewing and submitting proposals and contracts, and ensuring ASU’s eligibility to receive external funding.
When sponsors limit or prohibit indirect (F&A) costs, SMSS billings allow the university to recover a small portion of allowable and essential costs directly through the project budget. Only a subset of SMSS activities are billed this way, capturing services that directly benefit the sponsored project.
Introduction, content and background
Many charitable, nonprofit sponsors and other types of non-federal funders limit or prohibit indirect costs. Impacted projects often bear the same administrative burden for direct award administration; even when the award terms appear to be lighter, ASU Research Operations performs significant behind-the-scenes work necessary for ASU to apply for, receive, and manage awards in compliance with sponsor and regulatory requirements.
These activities include maintaining internal controls, policies, and systems; managing certifications, audits, and compliance monitoring; supporting pre-award administration, contract execution, and subaward negotiation; ensuring university-wide consistency; preserving ASU’s eligibility to receive sponsored funding; and providing transparency and reporting to sponsors and the public.
If ASU’s administrative costs are not recovered, the university absorbs these expenses, creating inequity between sponsor types and unsustainable financial pressure on central operations. To mitigate this, and recover ASU’s true cost to support sponsored projects, ASU Research Operations has established a recharge center: Sponsored Management Solutions and Support (SMSS). SMSS costs, like any other vendor/service provider billings, are allowable as a direct cost line item on most non-federal sponsored projects.
Definition: Non-federal funding (for SMSS purposes)
Non-federal funding
For purposes of SMSS, non-federal funding refers to sponsored funding that does not originate from a U.S. federal agency and is not passed through from a federal source.
This includes:
- Charitable foundations
- Nonprofit organizations
- Industry sponsors
- State government agencies (when funds are state-appropriated and not federal pass-through)
- Local government agencies (when funds are not federal pass-through)
- International governments and foreign entities
This does not include:
- Direct awards from U.S. federal agencies
- Federal pass-through funding (i.e., funding that originates from a federal agency but is issued through another entity such as a state agency, nonprofit, or university)
SMSS costs on non-federal proposals and awards
Direct charging of administrative or clerical salaries to an award is appropriate if the services benefit the sponsored project. Administrative expenses that benefit such awards can and should be charged directly to those projects.
SMSS is a required direct cost for non-federal funding opportunities with limited or restricted indirect (F&A) cost rates. This requirement applies to proposals submitted on or after June 1, 2026.
When a non-federal sponsor does not allow indirect cost recovery at ASU’s Federal Rate, SMSS will be included in sponsored project budgets under Other Direct Costs → Vendors/Services.
- If a sponsor’s published policy disallows vendor costs, prohibits any direct administrative costs (e.g., project management, etc.), or otherwise appears to categorize SMSS costs as unallowable, the Unit RA will contact their assigned Proposal Grant + Contract Officer (GCO) for review and guidance.
- The GCO will confirm, interpret, and document allowability, working with KE Leadership where needed. If necessary and appropriate, the GCO may provide an alternative method for including central administration costs.
Amounts to be charged will follow the established SMSS Tiered Costs via the calculator below, with the applicable tier determined by the total direct costs in each project year.
SMSS Cost Calculator
The SMSS Cost Calculator is used to determine the appropriate annual SMSS charge to include in proposal budgets. The calculator applies ASU’s established tiered rate structure based on the total direct cost amount and project year. (See FAQ #5 for additional details on how SMSS rates are developed).
This tool ensures consistent, accurate application of SMSS costs across all non-federal proposals and aligns with ASU’s recharge center requirements. RAs should use the calculator during budget development to identify the correct SMSS amount and include it under Other Direct Costs → Sponsored Management Solutions and Support in ERA.
For questions regarding calculator inputs or tier determination, consult the assigned Proposal GCO.
SMSS budget justification language
The following language can be used when justifying the central research administration vendor/service line as an Other Direct Cost:
Sponsored Management Solutions and Support – Funds are budgeted for Sponsored Management Solutions and Support to cover required institutional oversight, compliance, and infrastructure necessary to manage this award and maintain ASU’s eligibility for sponsored funding. SMSS supports legal, financial, and audit activities that ensure project success and compliance with sponsor requirements.
Help Tip: Contact the Proposal GCO if a shorter justification is needed due to character, word count, or page limitations.
SMSS Budget Justification Language
Frequently asked questions
Many non-federal sponsors limit indirect cost recovery, yet the university still incurs significant central administrative expenses to manage and oversee those awards. Including SMSS costs in proposal budgets ensures that ASU can maintain the systems, staffing, and controls that support compliance, financial stewardship, and sponsor accountability. This approach promotes equity across all sponsor types and helps sustain the infrastructure that benefits all research projects.
This expansion will not be applied retroactively; however:
- Specific proposals and awards with previous SMSS arrangements (e.g., large, $1M+ charitable grants), will continue to be billed accordingly and
- New continuation or supplemental funding (i.e., Revision proposals) for non-federal awards will require SMSS.
All new non-federal ERA Funding Proposals (Full Proposals, Revision FPs) with F&A limitations or restrictions must include SMSS costs in the budget, unless expressly prohibited by the sponsor’s published guidance. Non-federal funding resulting from proposals submitted on or after June 1, 2026 will be subject to SMSS billings.
| Indirect (F&A) costs | SMSS costs |
|---|---|
| Indirect costs (F&A) are a percentage-based recovery of institutional overhead applied to most sponsored projects, covering general (but real) costs that cannot easily be quantified for a specific project (e.g., utilities such as electricity, water, and internet; unit and university leadership efforts to support sponsored projects; facility maintenance; unit and central research administration). | SMSS costs are a vendor/service provider cost, billed like any other recharge center or core facility charge. SMSS costs are a quantified, direct charge to support a specific sponsored project. SMSS costs still cover only a portion of the University’s true costs to support a sponsored project. |
Recharge Centers (i.e., ‘Service Centers’) are units or facilities that recover the cost of providing specific services or products for a fee. Under university and federal cost accounting requirements, recharge center rates must be based on the actual cost of providing the service and applied consistently to all users, rather than functioning like indirect costs. This ensures transparency and compliance with federal cost principles governing how universities recover research administration expenses. Sponsored Management Solutions and Support (SMSS) is an ASU approved recharge center.
SMSS recharge center rates are calculated based on the estimated institutional administrative (personnel) effort required to manage sponsored awards, including activities such as contract negotiation, compliance monitoring, financial oversight, audit support, and maintaining the systems required for ASU to receive and manage sponsored funding. Those estimated effort levels are converted into a cost model using institutional salary averages and operational costs for the central research administration functions that support projects across the university.
To support straightforward budgeting, the underlying costs of central administration are converted into a tiered annual charge based on the total award size and project year. The SMSS calculator applies the appropriate tier for the award and project year to determine the annual amount to include in the proposal budget.
In short, SMSS is not a percentage-based overhead charge like F&A. Instead, it is a direct service center cost calculated from the estimated administrative support required to manage the award, consistent with ASU’s recharge center policies.
If a department requires additional pre- or post-award administrative support, it may request additional assistance from ORSPA. Upon approval, the Pre/Post Award SMSS team will establish a service level agreement outlining the specific responsibilities of each party. The department will be assessed for an additional fee for these services.
SMSS costs should be listed under “Other Direct Costs” using the cost category ‘Sponsored Management Solutions and Support’.
Yes, SMSS are required to be included in state and local government proposal budgets in cases where the funds don’t originate from a federal source.
ORSPA will send a standard message when assigning a GCO on a non-federal proposal, reminding the RA to include SMSS costs if/when the sponsor limits indirect cost recovery. The RA is welcome to reach out to the assigned Proposal GCO for questions and allowability determinations at any point in the proposal process. GCO proposal review will also include verification that SMSS costs are included appropriately when applicable.
At-a-glance summary
SMSS required when:
- Proposal is non-federal (not federal or federal pass-through), AND
- Sponsor limits or restricts F&A
Contacts
Questions? Please contact the Proposal GCO or Award Management Team or reach out to [email protected].