PI/PD Responsibilities for Sponsored Projects
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II. Financial, Administrative, and Programmatic Management of Awards 26 of 74 Prev - Next
a. Federally-Sourced Awards (Direct to UNH or Passed Through Another Sponsor)

It is the PI’s/PD’s responsibility to ensure that all expenses charged to his/her project are allowable, allocable, and reasonable. These cost principles derive from OMB Circular A-21:

  • Allowable

See OMB Circular A-21, section J for a list of allowable and unallowable costs for federal programs. Also see the award terms and conditions for expenses specifically identified by the sponsor as unallowable. An example of an unallowable cost is alcohol consumed for social purposes.

  • Allocable

An expense is allocable if the item or service charged directly benefited the project to which the funds were charged. An expense for one project CANNOT be charged to another project. PIs/PDs must provide clear documentation showing that the expense directly benefitted the project that paid for it. For more information, see OMB Circular A-21, section C.

If an expense benefits more than one project, the cost should be allocated proportionally to the benefit of each project. The applicable documentation should explain clearly the measurement used to proportion the cost and how the expense is allocable to each project. See OMB Circular A-21 link above.

“Benefit” must be realized during the project period of the award. For example, a piece of equipment purchased in the final months of an award project period would not benefit that award, even if the PI/PD receives additional funding under a new award from the same sponsor to continue the same project work.

  • Reasonable

The cost should reflect what a "prudent person" would pay for the product or service, and that the cost is/was necessary to the project performance.

OMB Circular A-21 also requires that direct and indirect (F&A) expenses are handled consistently in “like circumstances” across an institution. For example, administrative, clerical, and secretarial costs are included in the university’s F&A cost base, thus normally cannot be charged as direct costs to sponsored projects. PIs/PDs are responsible for following UNH policy to ensure that such normally unallowable costs are approved and well documented on those rare occasions where the costs are allowable. PIs/PDs should consult their OSR GCA* for guidance.

Because individual federal sponsors can be more restrictive than OMB Circular A-21 in limiting how funds can be spent, PIs/PDs need to review the program solicitation and award terms and conditions carefully for any additional spending limitations.

*PIs/PDs in EOS should contact their BSC.