of Research and Project Administration
SPONSORED PROGRAMS COMPLIANCE
Examples of Allocation Methods
you may need to purchase supplies and then allocate those materials and
their costs to several projects. Purchases of chemicals, glassware, or
other stores, for example, may be made "in bulk" and then apportioned
to the various projects on which they will be used.
It is sometimes impossible to precisely allocate such costs, and governing regulations
allow for the exercise of judgment
methods must be REASONABLE and must be DOCUMENTED. A 50 - 50 allocation of
costs between two projects may be appropriate, but there must be an explanation
in the project files to support that allocation. The basis for the allocation
should RELATE TO THE WORK BEING PERFORMED on the projects. For example, some
possible allocation bases follow:
headcount, or number of researchers on each project receiving the allocation
compared to the total number of all researchers on all projects receiving
of experiments/projects being performed and estimated usage for each
footage of lab space for each project receiving the allocation, compared
to the total square feet of all projects receiving the allocated costs
of some other related project costs, e.g., lab animal costs
You may have
noticed a few allocation methods that are NOT on this list. It is NOT appropriate
to allocate costs solely on the basis of which project has the most money.
It is also NOT appropriate to pool costs and charge them all to one project
in one month and then to another - unless the materials involved are actually
being used that way.
examples of applying allocation methodologies follow:
agreement for scientific equipment. If the equipment is utilized
50% on project A, 20% on project B and 30% for general academic
purposes, the cost of the maintenance should be allocated in
the same proportions (50% to Project A, 20% to Project B, and
30% to a departmental account).
for a guest speaker. If the speaker's topic of discussion
is relevant to both a project and to the general field of study,
thus is attended by not only the project's research staff but
other department staff as well, then one possible allocation
is based on the attendees from the project as a percent of all
a piece of equipment is to benefit more than one research project,
an estimate of the use on each project could be used to determine
an allocation percentage. Of course, the estimated use should be
compared to actual use after a reasonable period of time, with
any necessary adjustments made to the allocation percentage.
(for example, isotopes and chemicals) may be purchased in bulk
and then used on various projects. It may be possible to internally
requisition supplies and charge actual cost to a project. For example,
if 100 units are purchased and placed in the Department's central
area, then 10 units are requisitioned for Project A, Project A
would be charged for 10% of the cost. If a process for internally
requisitioning supplies does not exist, then the estimate of what
portion of the purchase is to be expended for each project should
be the basis for allocating the cost. Of course, the estimated
use should be compared to actual use after a reasonable period
of time, with any necessary adjustments made to the allocation
is no "one
right way" to allocate costs. Methods will vary based on circumstances.
The PI needs to exercise judgment, and then to document the selected
method in the project files. A memo to the file can describe how, in
the PI's judgment, the benefits to the involved projects warrant that
allocation of costs.
and administrative costs may NOT be collected and allocated among projects.
Office supplies and other administrative expenses are presumed to be
an indirect cost, and, in order to be charged directly, they must be
specifically identified to and budgeted for a particular project. For
Federal sponsors, this must be a "major project". (See explanation
of clerical and administrative