Office of Research and Project Administration
SPONSORED PROGRAMS COMPLIANCE
Major Projects or Significant Effort
The September 1, 1994, revision of Circular A-21 established the principle that administrative and clerical expenses are normally considered indirect costs. However, there are now two instances when administrative and clerical costs may be charged directly to Federal funds received either directly from the Federal Government or indirectly as a subrecipient under another entity's federal agreement; one, where the project is defined as a major project or activity; or, two, where the employee is providing a substantive contribution to the research project (defined below as significant research effort).
Major Project or Activity
A project is defined as one which is multi-purpose and multi-investigator or interdisciplinary, and requires a core administrative budget to ensure the project's operation and effectiveness. Examples of such major projects and activities include center grants or contracts ("P" series grants for PHS), cooperative agreements made for the purpose of running large programs (such as the LLE cooperative agreement with DOE) and other major awards with an agency-approved administrative support portion (such as the DOD University Research Initiative or the NSF Science and Technology Center), projects in remote locations where departmental administrative support is not possible, conference grants, and similar activities. Where these projects are established with a master administrative account and several subaccounts, administrative and clerical salaries should be charged to the core administrative account.
Refer to OMB Circular A-21, Exhibit C for further examples of major projects. The key to this definition and these examples is the concept of "administrative intensity" beyond routine levels. If the technical nature of the work to be done includes components that are "administratively intensive", then A-21 allows the definition of the project as "major". The direct charging of those allocable administrative costs which make the project "major" is then appropriate. A project may be "major" regardless of its size or the amount of its funding.
Significant Research Effort
Salaries of administrative and clerical personnel may be directly charged to a federal agreement if it can be demonstrated that the person is performing a research service to the agreement. Administrative and clerical activities involving data collection (such as surveys), statistical analysis, literature searches, or similar efforts are examples of such extraordinary services. Routine account monitoring, meeting arrangements, or typing of general correspondence or project reports are not research services as used herein.
In either case (major project or significant research effort), the following criteria must be met for the charge to be allowable as a direct cost:
Note that this "major project" or "significant research effort" requirement applies to federal sponsors only. With respect to non-federal sponsors, administrative and clerical expenses that are allowable, allocable and reasonable may be charged without demonstrating the existence of a "major project" or "significant research effort."