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NIH Grants Policy Statement
(12/03)
Part II: Terms and Conditions of NIH Grant Awards Subpart A: General -- File 3 of 5
Selected Items of Cost
Advertising
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Allowable only for recruitment of staff or trainees,
procurement of goods and services, disposal of scrap or surplus materials,
and other specific purposes necessary to meet the requirements of the
grant-supported project or activity.
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Alcoholic Beverages
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Unallowable as an entertainment expense, but allowable if
within the scope of an approved research project.
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Alteration and Renovation
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Individual
A&R projects that are treated as direct costs and that will not exceed
$500,000 will be subject to the A&R policies specified in this subsection
and in the “Construction Grants” section,
as applicable. Individual A&R projects exceeding $500,000 in direct costs
will be subject to the requirements specified in the “Construction Grants” section.
Routine
maintenance and repair of the organization’s physical plant or its equipment,
which is allowable and is ordinarily treated as an F&A cost, is not
considered A&R for purposes of applying this policy. Certain allowable
costs of installing equipment, such as the temporary removal and replacement
of wall sections and door frames to place equipment in its permanent
location, or the costs of connecting utility lines, replacing finishes and
furnishings, and installing any accessory devices required for the
equipment’s proper and safe utilization, may be considered either equipment
costs or A&R costs, depending on the grantee’s accounting system.
A&R
costs are not allowable under grants to individuals, foreign grants, and
grants in support of scientific meetings (conference grants). In all other
cases, these costs are allowable unless the program legislation, implementing
regulations, program guidelines, or other terms and conditions of the award
specifically exclude such activity. The A&R must be consistent with the
following criteria and documentation requirements:
l The building has a useful life
consistent with program purposes and is architecturally and structurally
suitable for conversion to the type of space required
l The A&R is essential to the
purpose of the grant-supported project
l The space involved will be
occupied by the project
l The space is suitable for human
occupancy before A&R work is started except where the purpose of the
A&R is to make the space suitable for some purpose other than human
occupancy, such as storage
l If the space is rented, evidence
is provided that the terms of the lease are compatible with the A&R
proposed and cover the duration of the project period.
Work
necessary to obtain an initial occupancy permit for the intended use is not
an allowable A&R cost.
A grantee may rebudget up to 25 percent of the total
approved budget for a budget period into A&R costs without NIH prior
approval unless such rebudgeting would result in a change in scope. If the
rebudgeting results in an A&R project exceeding $300,000, NIH will
consider the rebudgeting to be a change in scope, and the grantee must submit
to the NIH awarding office the documentation specified in “Construction Grants” for approval of A&R
projects above that dollar level.
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Animals
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Allowable
for the acquisition, care, and use of experimental animals, contingent upon
compliance with the applicable requirements of the PHS Policy on Humane
Care and Use of Laboratory Animals (see “Public
Policy Requirements and Objectives—Animal Welfare”). If the grantee
operates an animal resource facility, charges for use of the facility should
be determined in accordance with the Cost Analysis and Rate Setting Manual
for Animal Resource Facilities (May 2000), available from NCRR at its
website: (http://www.ncrr.nih.gov/newspub/CARS.pdf)
or from NCRR’s Office of Science Policy and Public Liaison (telephone:
301-435-0888;
e-mail: info@ncrr.nih.gov.
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Audiovisual
Activities
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Allowable
for the production of an audiovisual. “Audiovisual” means any product
containing visual imagery, sound, or both, such as motion pictures, films,
videotapes, live or recorded radio or television programs or public service
announcements, slide shows, filmstrips, audio recordings, multimedia
presentations, or exhibits where visual imagery, sound, or both are an
integral part. “Production” refers to the steps and techniques used to create
a finished audiovisual product including, but not limited to, design, layout,
scriptwriting, filming or taping, fabrication, sound recording, and editing.
A
recipient with in-house production capability must determine whether it would
be more efficient and economical to use that capability or to contract for
the production of an audiovisual.
If an
audiovisual intended for members of the general public (i.e., people who are
not researchers or health professions personnel or who are not directly
involved in project activities as employees, trainees, or participants such
as volunteers or patients) is produced under an NIH grant-supported project,
the grantee must submit two prints or tapes of the finished product along
with its annual or final progress report (see “Administrative
Requirements—Monitoring—Reporting” and “Administrative
Requirements—Closeout”). The costs of such prints or tapes are allowable
project costs.
Audiovisuals
produced under an NIH grant-supported project must bear an acknowledgment and
disclaimer, such as the following:
The
production of this [type of audiovisual (motion picture, television program,
etc.)] was supported by Grant No.____________ from [name of NIH awarding
office]. Its contents are solely the responsibility of [name of grantee
organization] and do not necessarily represent the official views of [name of
NIH awarding office].
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Audit
Costs
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Allowable
(see “Administrative Requirements—Monitoring—Audit” and
section 230 of OMB Circular A-133). The charges may be treated as a direct
cost when the audit’s scope is limited to a single NIH grant-supported
project or program, as specified in
45 CFR 74.26(d), or when it includes more than one project but the costs can
be specifically identified with, and allocated to, each project on a
proportional basis, and this practice is followed consistently by the
grantee. Otherwise, charges for audits should be treated as F&A costs.
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Bad
Debts
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Unallowable.
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Bid
and Proposal Costs
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Allowable
as an F&A cost. See 45 CFR 74.27(b)(1) for policy for non-profit
organizations covered by OMB Circular A-122.
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Bonding
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Allowable.
See 45 CFR 74.21, 74.47(c) and 92.36 for policies and requirements concerning
bonding.
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Books
and Journals
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Allowable.
If an organization has a library, books and journals generally should be
provided as part of normal library services and treated as F&A costs.
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Building
Acquisition
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Unallowable
unless building acquisition or construction is specifically authorized by
program legislation and is provided for in the NGA. For real property
acquired with NIH grant support, the cost of title insurance may be charged
to the grant in proportion to the Federal share of the acquisition cost.
Filing fees for recording the Federal interest in the real property in
appropriate records of the applicable jurisdiction also may be charged to the
grant. (Also see “Construction
Grants—Allowable and Unallowable Costs and Activities” in Subpart B of
this part)
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Child
Care Costs
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Allowable
if incurred to assist individuals to participate as subjects in research
projects. Such costs also may be allowable as a fringe benefit for
individuals working on a grant-supported project (see “Fringe Benefits” in this subsection).
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Communications
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Allowable.
Such costs include local and long-distance telephone calls, telegrams,
express mail, and postage, and usually are treated as F&A costs.
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Conference
Grant Costs
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See “Support of Scientific Meetings (Conference
Grants)” in Subpart B of this part for allowability of costs for
scientific meetings (conferences).
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Consortium Agreements/
Contracts under Grants
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Allowable
to carry out a portion of the programmatic effort or for the acquisition of
routine goods or services under the grant. Such arrangements may require NIH
approval as specified in “Administrative
Requirements—Changes in Project and Budget.” (See “Administrative Requirements—Management
Systems and Procedures—Procurement System Standards and Requirements” for
policies that apply to the acquisition of routine goods and services and “Consortium Agreements” in Subpart B of
this part for policies that apply to grantee collaboration with other
organizations in carrying out the grant-supported research.)
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Construction
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Allowable
only when program legislation specifically authorizes new construction,
modernization, or major A&R, and NIH specifically authorizes such costs
in the NGA. When authorized, construction activities may include construction
of a new facility or projects in an existing building that are considered to
be construction, such as relocation of exterior walls, roofs, and floors;
attachment of fire escapes; or completion of unfinished shell space to make
it suitable for human occupancy (see “Construction
Grants” in Subpart B of this part).
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Consultant Services
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Allowable.
A consultant is an individual retained to provide professional advice or
services for a fee but usually not as an employee of the requiring
organization. The term “consultant” also includes a firm that provides paid
professional advice or services. Grantees must have written policies
governing their use of consultants that are consistently applied regardless
of the source of support. Such policies should include the conditions for
paying consulting fees. The general circumstances of allowability of these
costs, which may include fees and travel and subsistence costs, are addressed
in the applicable cost principles under “professional services costs.”
In
unusual situations, a person may be both a consultant and an employee of the
same party, receiving compensation for some services as a consultant and for
other work as a salaried employee as long as those separate services are not
related to the same project and are not charged to the same project. For
example, consulting fees that are paid by an educational institution to a
salaried faculty member as extra compensation above that individual’s base
salary are allowable, provided the consultation is across departmental lines
or involves a separate or remote operation and the work performed by the
consultant is in addition to his or her regular departmental workload.
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Grantees,
consortium participants, and contractors under grants that want to be able to
charge employee consulting costs to grant-supported projects must establish
written guidelines permitting such payments regardless of the source of
funding and indicating the conditions under which the payment of consulting
fees to employees is proper. Unless subject to OMB Circular A-21, the
grantee, consortium participant, or contractor also must document that it
would be inappropriate or infeasible to compensate the individual for those
services through payment of additional salary. Under no circumstances can an
individual be paid as a consultant and an employee under the same NIH grant.
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Authorization
for consulting fees paid to individuals serving as both employees and
consultants of the same party must be provided in writing, on a case-by-case
basis, by the head of the recipient organization, consortium participant, or
contractor incurring the costs, or his/her designee. If the designee is
personally involved in the project, the authorization may be given only by
the head of the recipient organization, consortium participant, or
contractor. This authorization must include a determination that the required
conditions are present and that there is no apparent or actual conflict of
interest.
Grantees, consortium participants, and contractors under
grants are encouraged to obtain written reports from consultants unless such
a report is not feasible given the nature of the consultation or would not be
useful. Documentation maintained by the receiving organization should include
the name of the consulting firm or individual consultant; the nature of the
services rendered and their relevance to the grant-supported activities, if
not otherwise apparent from the nature of the services; the period of
service; the basis for calculating the fee paid (e.g., rate per day or hour
worked or rate per unit of service rendered); and the amount paid. This
information may be included in the consultant’s invoice, in the report, or in
another document.
See “Grants to Federal Institutions and Payments to (or
on Behalf of) Federal Employees under Grants” in Subpart B of this part
for allowable costs associated with consultant payments to Federal employees
and the circumstances of allowability.
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Contingency Funds
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Unallowable.
Contributions set aside for events whose occurrence cannot be foretold with
certainty as to time, intensity, or assurance of their happening are
unallowable under nonconstruction grants. Contingency funds do not include
pension funds, self-insurance funds, and normal accruals (also see “Reserve Funds” in this subsection). (See “Construction Grants—Allowable and
Unallowable Costs and Activities” in Subpart B of this part concerning
contingency funds under construction grants.)
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Customs
and Import Duties
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Allowable
under grants to domestic organizations when performance will take place
entirely within the United States, its possessions, or its territories, or
when foreign involvement in the project is incidental to the overall
grant-supported project. Charges may include consular fees, customs surtaxes,
value-added taxes, and other related charges. (Also see “Grants to Foreign Institutions,
International Organizations, and Domestic Grants with Foreign
Components—Allowable and Unallowable Costs” in Subpart B of this part for
the allowability of these costs.)
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Depreciation
or Use Allowances
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Allowable.
Such costs usually are treated as F&A costs. Depreciation or use charges
on equipment or buildings acquired under a federally supported project are
not allowable.
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Donor
Costs
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Allowable
for payment to volunteers or research subjects who contribute blood, urine
samples, and other body fluids or tissues that are specifically
project-related.
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Drugs
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Allowable
if within the scope of an approved research project.
Project
funds may not be used to purchase drugs classified by FDA as “ineffective” or
“possibly effective” except in approved clinical research projects or in
cases where there is no alternative other than therapy with “possibly
effective” drugs.
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Dues
or Membership Fees
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Allowable
as an F&A cost for organizational membership in business, professional,
or technical organizations or societies.
Payment
of dues or membership fees for an individual’s membership in a professional
or technical organization is allowable as a fringe benefit or an employee
development cost, if paid according to an established organizational policy
consistently applied regardless of the source of funds.
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Entertainment
Costs
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Unallowable.
This includes the cost of amusements, social activities, and related
incidental costs.
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Equipment
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Allowable
for purchase of new, used, or replacement equipment as a direct cost or as
part of F&A costs, depending on the intended use of the equipment. NIH
prior approval may be required as specified in “Administrative
Requirements—Changes in Project and Budget.”
In
accordance with the requirements of NIH appropriations acts, American-made
items should be purchased to the extent possible.
Funds
provided under a conference grant may not be used to purchase equipment.
For
policies governing the classification, use, management, and disposition of
equipment, see “Administrative
Requirements—Management Systems and Procedures—Property Management System
Standards.” For policies governing the allowability of costs for rental
of equipment, see “Rental
or Lease of Facilities and Equipment” in this subsection.
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Federal
(U.S. Government) Employees
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See “Grants to Federal Institutions and
Payments to (or on Behalf of) Federal Employees under Grants—Allowable and
Unallowable Costs” for the allowability of payments made to, or on behalf
of, Federal employees under NIH grants, including grants to Federal
institutions.
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Fines
and Penalties
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Unallowable
except when resulting from violations of, or failure of the organization to
comply with, Federal, State, or local laws and regulations and incurred as a
result of compliance with specific provisions of an award, or when such
payments are authorized in advance in writing by the NIH awarding office.
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Fringe Benefits
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Allowable
as part of overall compensation to employees in proportion to the amount of
time or effort employees devote to the grant-supported project, provided such
costs are incurred under formally established and consistently applied
policies of the organization (see “Salaries and
Wages” in this subsection).
Tuition
or tuition remission for regular employees is allowable as a fringe benefit.
For organizations subject to OMB Circular A-21, tuition benefits for family
members other than the employee are unallowable. For policies applicable to
tuition remission for students working on grant-supported research projects,
see “Salaries and Wages” in this
subsection. See “Ruth L. Kirschstein National
Research Service Awards—Individual Fellowships—Allowable and Unallowable
Costs—Tuition and Fees” and “Ruth L.
Kirschstein National Research Service Awards—Institutional Research Training
Grants—Allowable and Unallowable Costs—Trainee Tuition, Fees, and Health
Insurance” in Subpart B of this part for the allowability of tuition
costs for fellows and trainees.
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Fundraising
Costs
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Unallowable.
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Hazardous
Waste Disposal
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Allowable.
Usually treated as an F&A cost.
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Honoraria
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Unallowable
when the primary intent is to confer distinction on, or to symbolize respect,
esteem, or admiration for, the recipient of the honorarium. A payment for
services rendered, such as a speaker’s fee under a conference grant, is
allowable.
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Hospitalization
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See “Research Patient Care” in this subsection.
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Indemnification
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Allowable
to the extent expressly provided in the award for indemnification against
liabilities to third parties and any other loss or damage not compensated by
insurance or otherwise.
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Independent
Research and Development Costs
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Unallowable,
including their proportionate share of F&A costs.
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Insurance
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Allowable.
Insurance usually is treated as an F&A cost. In certain situations,
however, where special insurance is required as a condition of the grant
because of risks peculiar to the project, the premium may be charged as a
direct cost if doing so is consistent with organizational policy. Medical
liability (malpractice) insurance is an allowable cost of research programs
at educational institutions only if the research involves human subjects. If
so, the insurance should be treated as a direct cost and assigned to
individual grants based on the manner in which the insurer allocates the risk
to the population covered by the insurance.
The
cost of insuring equipment, whether purchased with project funds or furnished
as federally owned property, normally should be included in F&A costs but
may be allowable as a direct cost if this manner of charging is the normal
organizational policy.
Health
insurance for trainees
and fellows is addressed in “Ruth L. Kirschstein National Research Service
Awards” in Subpart B of this part.
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Interest
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Allowable
as an F&A cost for certain assets as specified in the applicable cost
principles. Unallowable for hospitals.
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Invention,
Patent, or Licensing Costs
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Unallowable as a direct cost unless specifically authorized on the grant award. May be allowable as F&A costs, provided they are authorized under applicable cost principles and are included in the negotiation of F&A cost rates. Such costs include licensing or option fees, attorney's fees for preparing or submitting patent applications, and fees paid to the U.S. Patent and Trademark Office for patent application, patent maintenance, or recordation of patent-related information. (This Section Revised per May 27, 2004 NIH Guide notice.)
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Leave
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Allowable for employees as a fringe benefit (see “Fringe Benefits” in this subsection). See “Ruth L. Kirschstein National Research Service
Awards—Individual Fellowships—Other Terms and Conditions—Leave” and “Ruth L. Kirschstein National Research Service
Awards—Institutional Research Training Grants—Other Terms and
Conditions—Leave” in Subpart B of this part for NIH policy on leave for
fellows and trainees.
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Legal
Services
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Allowable.
Generally treated as an F&A cost but, subject to the limitations
described in the applicable cost principles, may be treated as a direct cost
for legal services provided by individuals who are not employees of the
grantee organization. Before a grantee incurs legal costs that are
extraordinary or unusual in nature, the grantee should make an advance
agreement regarding the appropriateness and reasonableness of such costs with
the GMO.
Legal
costs incurred in defending or prosecuting claims, whether equitable or
monetary, including administrative grant appeals, are unallowable charges to
NIH grant-supported projects, except as provided in the applicable cost
principles.
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Library
Services
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General
library support is not allowable as a direct cost but may be included in the
grantee’s F&A pool. However, such services are allowable as a direct cost
when specifically required for the conduct of the project and when
identifiable as an integral part of the grant-supported activity (e.g., in
those programs designed to develop and support such services).
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Lobbying
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Generally
unallowable, including costs of lobbying activities to influence the
introduction, enactment, or modification of legislation by the U.S. Congress
or a State legislature. Under certain circumstances, as provided in the
applicable cost principles, costs associated with activities that might
otherwise be considered “lobbying” that are directly related to the
performance of a grant may be allowable. The grantee should obtain an advance
understanding with the GMO if it intends to engage in these activities. (Also
see “Public Policy Requirements and Objectives—Ethical
and Safe Conduct in Science and Organizational Operations—Lobbying” and “Administrative Requirements—Monitoring—Reporting”
concerning lobbying restrictions, the required certification, and reporting.)
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Meals
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Allowable
for subjects and patients under study, or where specifically approved as part
of the project activity, provided that such charges are not duplicated in
participants’ per diem or subsistence allowances, if any.
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Moving
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See “Recruitment Costs,” “Relocation
Costs,” and “Transportation of
Property” in this subsection.
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Nursery
Items
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Allowable
for the purchase of items such as toys and games to allow patients to
participate in research protocols.
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Overtime
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See “Salaries and Wages” in this subsection.
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Pension
Plan Costs
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Allowable.
For institutions of higher education and non-profit organizations, such costs
must be incurred according to the established policies of the organization
consistently applied regardless of the source of funds, the organization’s
policies must meet the test of reasonableness, the methods of cost allocation
must be equitable for all activities, the amount assigned to each fiscal year
must be determined in accordance with generally accepted accounting
principles, and the cost assigned to a given fiscal year must be paid or
funded for all plan participants within 6 months after the end of that fiscal
year.
State,
local, or Indian tribal governments or hospitals may use the “pay-as-you-go”
cost method (i.e., when pension benefits are paid by the grantee directly to,
or on behalf of, retired employees or their beneficiaries) in lieu of the
method described above. Under this method, the benefits may be charged in the
grantee’s fiscal year in which the payments are made to, or on behalf of,
retired employees or their beneficiaries, provided that the grantee follows a
consistent policy of treating such payments as expenses in the year of
payment. See the applicable cost principles for additional information on the
allowability of costs associated with pension plans.
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Pre-Award (Pre-Agreement) Costs
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Allowable.
A grantee may, at its own risk and without NIH prior approval, incur
obligations and expenditures to cover costs up to 90 days before the
beginning date of the initial budget period of a new or competing
continuation award if such costs:
l are necessary to conduct the
project, and
l would be allowable under the
grant, if awarded, without NIH prior approval.
If specific
expenditures would otherwise require prior approval, the grantee must obtain
NIH approval before incurring the cost. NIH prior approval is required for
any costs to be incurred more than 90 days before the beginning date of the
initial budget period of a new or competing continuation award.
Grantees
may incur pre-award costs before the beginning date of a non-competing
continuation award without regard to the time parameters stated above.
The
incurrence of pre-award costs in anticipation of a competing or non-competing
award imposes no obligation on NIH either to make the award or to increase
the amount of the approved budget if an award is made for less than the
amount anticipated and is inadequate to cover the pre-award costs incurred.
NIH
expects the grantee to be fully aware that pre-award costs result in
borrowing against future support and that such borrowing must not impair the
grantee’s ability to accomplish the project objectives in the approved time
frame or in any way adversely affect the conduct of the project.
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Public
Relations Costs
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Allowable
only for costs specifically required by the award or for costs of
communicating with the public and the press about specific activities or
accomplishments under the grant-supported project or other appropriate
matters of public concern. Such costs may be treated as direct costs but
should be treated as F&A costs if they benefit more than one sponsored
agreement or if they benefit the grant and other work of the organization.
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Publications
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Allowable.
Page charges for publication in professional journals are allowable if the
published paper reports work supported by the grant and the charges are
levied impartially on all papers published by the journal, whether or not by
government-sponsored authors.
The costs
of reprints and publishing in other media, such as books, monographs, and
pamphlets, also are allowable.
Publications
and journal articles produced under an NIH grant-supported project must bear
an acknowledgment and disclaimer, as appropriate, as provided in “Administrative Requirements—Availability of
Research Results: Publications, Intellectual Property Rights, and Sharing
Research Resources.”
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Recruitment Costs
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Allowable
subject to the conditions and restrictions contained in the applicable cost
principles. These costs may include help-wanted advertising costs, costs of
travel by applicants to and from preemployment interviews, and travel costs
of employees while engaged in recruiting personnel. Project funds may not be
used for a prospective trainee’s travel costs to or from the grantee
organization for the purpose of recruitment. However, other costs incurred in
connection with recruitment under training programs, such as advertising, may
be allocated to a grant-supported project according to the provisions of the
applicable cost principles (also see “Travel” and “Relocation Costs” in this subsection).
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Registration
Fees (for Symposiums and Seminars)
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Allowable
if necessary to accomplish project objectives.
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Relocation Costs
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Allowable—in
other than change of grantee organization situations—when such costs are
incurred incidental to a permanent change of duty assignment (for an
indefinite period or for a stated period of no less than 12 months) for an
existing employee working on a grant-supported project, or when a new
employee is recruited for work on the project, provided that the move is for
the grantee’s benefit rather than the individual’s and that payment is made
according to established organizational policies consistently applied
regardless of the source of funds. Relocation costs may include the cost of
transporting the employee and his or her family, dependents, and household
goods to the new location and certain expenses associated with the sale of
the former home. If relocation costs have been incurred in connection with
the recruitment of a new employee, whether as a direct cost or an F&A
cost, and the employee resigns for reasons within his or her control within
12 months after hire, the grantee must credit the grant account for the full
cost of the relocation charged to the grant.
When
there is a change in the grantee organization, the personal relocation
expenses of the PI and others moving from the original grantee to the new
grantee are not allowable charges to NIH grants (see “Administrative Requirements—Changes in
Project and Budget—Prior-Approval Requirements”).
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Rental or Lease of Facilities and
Equipment
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Allowable
subject to the limitations below. Rental costs are allowable to the extent
that the rates are reasonable at the time of the decision to lease in light
of such factors as rental costs of comparable property, if any; market
conditions in the area; the type, life expectancy, condition, and value of
the property leased; and available alternatives. Because of the complexity
involved in determining the allowable amount under certain types of leases,
grantees are encouraged to consult the GMO before entering into leases that
will result in direct charges to the grant project.
In
general, the rental costs for facilities and equipment applicable to each
budget period should be charged to that period. However, see “Administrative Requirements—Management
Systems and Procedures—Procurement System Standards and Requirements” for
an exception to this general rule.
Rental
costs under leases that create a material equity in the leased property, as
defined in the applicable cost principles, are allowable only up to the
amount that would be allowed had the grantee purchased the property on the
date the lease agreement was executed. This would include depreciation or use
allowances, maintenance, taxes, and insurance, but would exclude unallowable
costs.
When
a grantee transfers property to a third party through sale, lease, or
otherwise and then leases the property back from that third party, the lease
costs that may be charged to NIH projects generally may not exceed the amount
that would be allowed if the grantee continued to own the property.
Rental
costs under “less-than-arms-length” leases are allowable only up to the
amount that would be allowed under the applicable cost principles had title
to the property been vested in the grantee. A less-than-arms-length lease is
one in which one party to the lease agreement is able to control or
substantially influence the actions of the other. Such leases include, but
are not limited to, those between divisions of an organization; between
organizations under common control through common officers, directors, or
members; and between an organization and its directors, trustees, officers,
or key employees (or the families of these individuals), directly or through
corporations, trusts, or similar arrangements in which they hold a
controlling interest.
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Research Patient Care
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The
costs of routine and ancillary services provided by hospitals to individuals,
including patients and volunteers, participating in research programs are
allowable. Incurrence of patient care costs if not previously approved by NIH
and rebudgeting additional funds into, or rebudgeting approved amounts out
of, the research patient care costs category may be considered a change in
scope and require prior approval by the NIH awarding office.
“Routine
services” include the regular room services, minor medical and surgical
supplies, and the use of equipment and facilities for which a separate charge
is not customarily made. “Ancillary services” are those special services for
which charges customarily are made in addition to routine services, e.g.,
x-ray, operating room, laboratory, pharmacy, blood bank, and pathology. See “Research Patient Care Costs” in Subpart B
of this part for NIH policy concerning reimbursement of these costs.
The
following otherwise allowable costs are not classified as research patient
care costs items of personal expense reimbursement, such as
patient travel; consulting physician fees; and any other direct payments to
individuals, including inpatients, outpatients, subjects, volunteers, and
donors. Such costs should be included in the “Other Expenses” category of the
grant budget.
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Reserve Funds
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Contributions
to a reserve fund for self-insurance are allowable as specified in the
governing cost principles (also see “Contingency
Funds” in this subsection).
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Sabbatical
Leave Costs
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Sabbatical
leave costs may be included in a fringe benefit rate or in the organization’s
F&A rate. Salary may be charged directly to a project for services
rendered to the project by individuals while they are on sabbatical leave,
provided the salary is proportional to the service rendered and is paid according
to established organizational policies applicable to all employees regardless
of the source of funds. Sabbatical leave paid by an individual’s employer, in
combination with other compensation (e.g., partial salary from an NIH grant),
may not exceed 100 percent of that individual’s regular salary from his or
her organization.
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Salaries and Wages
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Allowable.
Compensation for personal services covers all amounts, including fringe
benefits, paid currently or accrued by the organization for employee services
rendered to the grant-supported project. Compensation costs are allowable to
the extent that they are reasonable, conform to the established policy of the
organization consistently applied regardless of the source of funds, and
reflect no more than the percentage of time actually devoted to the
NIH-funded project. As required in its annual appropriations act, NIH will
not reimburse grantees for the direct salaries of individuals at a rate in
excess of the level specified in the appropriations language. Direct salary
is exclusive of fringe benefits and F&A costs. This salary limitation
does not apply to consultant payments or to contracts for routine goods and
services but it does apply to consortium participants (see “Consortium Agreements” in Subpart B of
this part).
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Payroll
Distribution
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Salary
and wage amounts charged to grant-supported projects for personal services
must be based on an adequate payroll distribution system that documents such
distribution in accordance with generally accepted practices of like
organizations. Standards for payroll distribution systems are contained in
the applicable cost principles (other than those for for-profit
organizations). Briefly summarized, acceptable systems are as follows:
l Hospitals
Ø Monthly after-the-fact reports of
the distribution of time or effort for professional staff members.
Ø Time and attendance and payroll
distribution records for non-professional employees.
l Non-profit organizations
Ø Monthly after-the-fact reports, including
a signed certification, by the employee, or by a responsible supervisory
official having first-hand knowledge of the work performed, that the
distribution of activity represents a reasonable estimate of the actual work
performed by the employee during the period covered by the report. Each
report must account for the total activity required to fulfill the employee’s
obligations to the organization as well as the total activity for which he or
she is compensated.
Ø For non-professional employees,
additional supporting reports, indicating the total number of hours worked
each day, must be maintained in conformance with DoL regulations implementing
the Fair Labor Standards Act (29 CFR Part 516).
Ø The distribution of salaries and
wages must be supported by personnel activity reports as described above,
except when a substitute system has been approved, in writing, by the Federal
cognizant agency designated under OMB Circular A-122.
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l State, local, and Indian tribal
governments
Ø Time and attendance or equivalent
records for all employees.
Ø Time distribution records for
employees whose compensation is chargeable to more than one grant or other
cost objective.
l Educational institutions
Ø A plan confirmation system for
professorial and other professional staff members that is based on budgeted,
planned, or assigned work activity and that is updated to reflect any
significant changes in work distribution. This system must be incorporated
into the organization’s official records and must identify activity
applicable to each sponsored agreement and to each category needed to
identify F&A costs and the functions to which they are allocable. At
least annually, the employee, PI, or responsible officials will verify, by
suitable means, that the work was performed and that the salaries and wages
charged to sponsored agreements, whether as direct charges or in other
categories of cost, are reasonable in relation to the work performed; or
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Ø A system, supported by
after-the-fact activity reports, that reflects the distribution of covered
employees’ activity allocable to each NIH grant and includes identification
and recording of significant changes in work activity when initial charges
were based on estimates. The system also must specify each category of
activity needed to identify F&A costs and the functions to which they are
allocable. For professorial and other professional staff members, the
activity reports will be prepared each academic term, but at least every 6
months. For other employees, unless NIH agrees to alternate arrangements, the
reports will be prepared at least monthly and will coincide with one or more
pay periods; or
Ø A multiple confirmation records
system, for professorial and other professional staff members, that is
supported by records certifying costs separately for direct costs and F&A
costs, with reports prepared each academic term, but at least every 6 months,
that confirm the activities as allocable to direct or F&A costs; or
Ø By mutual agreement, any other
method meeting the criteria specified in paragraph J.8.b.(2) of OMB Circular
A-21.
l For-profit organizations
Ø NIH requires for-profit
organizations to conform with industry standards to support salary and wage
charges to NIH grants. Therefore, unless an alternate system is approved by
the GMO, the grantee must maintain a time-and-effort reporting system for
both professional and other-than-professional staff reflecting daily
after-the-fact reporting of hours expended on individual projects or indirect
activities. The system must record both hours worked and hours absent. This
information must be certified by an AOO no less frequently than every pay
period.
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Overtime
Premiums
|
Premiums
for overtime generally are allowable; however, such payments are not
allowable for faculty members at institutions of higher education. If
overtime premiums are allowable, the categories or classifications of
employees eligible to receive overtime premiums should be determined
according to the formal policies of the organization consistently applied
regardless of the source of funds.
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Bonus
Funds/Incentive Payments
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Allowable
as part of a total compensation package, provided such payments are
reasonable and are made according to a formal policy of the grantee that is
consistently applied regardless of the source of funds.
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Payments
for Dual Appointments
|
For investigators with university and clinical practice plan
appointments, compensation from both sources may be considered the base
salary if the following criteria are met:
l Clinical practice compensation
must be guaranteed by the university
l Clinical practice effort must be
shown on the university appointment form and must be paid through the
university
l Clinical practice effort must be
included and accounted for on the university’s effort report.
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Support
from Multiple Grants
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See “Cost Considerations—Allocation of Costs and
Closely Related Work.”
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Compensation of Students
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Tuition
remission and other forms of compensation paid as, or in lieu of, wages to
students (including fellows and trainees) under research grants are
allowable, provided the following conditions are met:
l The individual is performing
activities necessary to the grant
l Tuition remission and other forms
of compensation are consistently provided, in accordance with established
institutional policy, to students performing similar activities conducted in
nonsponsored as well as in sponsored activities
l During the academic period, the
student is enrolled in an advanced degree program at a grantee or affiliated
institution and the activities of the student in relation to the federally
sponsored research project are related to the degree program.
Charges
for tuition remission and other forms of compensation paid to students as, or
in lieu of, salaries and wages are subject to the reporting requirements in
section J.8. of OMB Circular A-21, or an equivalent method for documenting
the individual’s effort on the research project. Tuition remission may be
charged on an average rate basis. NIH will determine the allowability and
reasonableness of such compensation under a grant on the basis of OMB
Circular A-21 and its current operating guidelines.
The
maximum amount NIH will award for compensation of a graduate student
receiving support from a research grant is tied to the zero-level
Kirschstein-NRSA stipend in effect when NIH issues the grant award (see
current levels posted at http://grants.nih.gov/training/nrsa.htm).
Payments made for educational assistance (e.g.,
scholarships, fellowships, and student aid costs) may not be paid from NIH
research grant funds even when they would appear to benefit the research
project.
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Service
Charges
|
Allowable.
The costs to a user of organizational services and central facilities owned
by the grantee organization, such as central laboratory and computer
services, are allowable and must be based on organizational fee schedules
consistently applied regardless of the source of funds.
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Severance
Pay
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Allowable
only to the extent that such payments are required by law, are included in an
employer-employee agreement, are part of an established policy effectively
constituting an implied agreement on the part of the organization, or meet
the circumstances of the particular employment. The amount of severance pay to
be provided should be determined according to established organizational
policy consistently applied regardless of the source of funds and should be
reasonable, taking into consideration the practice of similar types of
organizations and the extent of the organization’s dependence on Federal
funds. The applicable cost principles should be consulted regarding the
different treatment of severance pay in regular and mass termination
situations.
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Stipends
|
Allowable
as cost-of-living allowances for trainees and fellows only under
Kirschstein-NRSA individual fellowships and institutional research training
grants. These payments are made according to a preestablished schedule based
on the individual’s experience and level of training. A stipend is not a
fee-for-service payment and is not subject to the cost accounting
requirements of the cost principles. Additional information, including NIH
policy on stipend supplementation, is included in “Ruth L. Kirschstein National Research
Service Awards—Individual Fellowships—Supplementation of Stipends,
Compensation, and Other Income—Stipend Supplementation” and “Ruth L. Kirschstein National Research Service
Awards—Institutional Research Training Grants—Stipend Supplementation,
Compensation, and Other Income—Stipend Supplementation” in Subpart B of
this part. Stipends are not allowable under research grants even when they
appear to benefit the research project.
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Subject
Costs
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See “Research Patient Care” in this subsection.
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Supplies
|
Allowable.
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Taxes
|
Allowable.
Such costs include taxes that an organization is required to pay as they
relate to employment, services, travel, rental, or purchasing for a project.
Grantees must avail themselves of any tax exemptions for which activities
supported by Federal funds may qualify. State sales and use taxes for
materials and equipment are allowable only when the State does not grant a
refund or exemption on such taxes.
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Termination
or Suspension Costs
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Unallowable
except as follows. If a grant is terminated or suspended, the grantee may not
incur new obligations after the effective date of the termination or
suspension and must cancel as many outstanding obligations as possible (see “Administrative Requirements—Enforcement
Actions—Suspension, Termination, and Withholding of Support”). NIH will
allow full credit to the grantee for the Federal share of otherwise allowable
costs if the obligations were properly incurred by the grantee before
suspension or termination—and not in anticipation of it—and, in the case of
termination, are not cancelable. The GMO may authorize other costs in, or
subsequent to, the notice of termination or suspension. See 45 CFR
74.62(c) and 92.43.
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Trailers
and Modular Units
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Allowable
only if considered equipment as provided below. A “trailer” is defined as a
portable vehicle built on a chassis that is designed to be hauled from one
site to another by a separate means of propulsion and that serves, wherever
parked, as a dwelling or place of business. A “modular unit” is a
prefabricated portable unit designed to be moved to a site and assembled on a
foundation to serve as a dwelling or a place of business. The determination
of whether costs to acquire trailers or modular units are allowable charges
to NIH grant-supported projects depends on whether such units are classified
as real property or equipment. The classification will depend on whether the
grantee’s intended use of the property is permanent or temporary.
A
trailer or modular unit is considered real property when the unit and its
installation are designed or planned to be installed permanently at a given
location so as to seem fixed to the land as a permanent structure or
appurtenance thereto. Units classified as real property may not be charged to
an NIH grant-supported project unless authorizing legislation permits
construction or acquisition of real property and the specific purchase is
approved by the NIH awarding office.
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A
trailer or modular unit is considered equipment when the unit and its
installation are designed or planned to be used at any given location for a
limited time only. Units classified as equipment may be charged to NIH
grant-supported projects only if the terms and conditions of the award do not
prohibit the purchase of equipment and NIH prior approval is obtained, as
appropriate.
A
trailer or modular unit properly classified as real property or as equipment
at the time of acquisition retains that classification for the life of the
item, thereby determining the appropriate accountability requirements under
45 CFR 74.32 or 74.34 or 92.31 or 92.32, as applicable.
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Trainee
Costs
|
Allowable
only under predoctoral and postdoctoral training grants. (See “Ruth L. Kirschstein National Research
Service Awards—Institutional Research Training Grants—Allowable and
Unallowable Costs” in Subpart B of this part for detailed information.)
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Transportation of Property
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Allowable
for freight, express, cartage, postage, and other transportation services
relating to goods either purchased, in process, or delivered, including
instances when equipment or other property is moved from one grantee to
another. In a change-of-grantee situation, the cost of transportation may be
charged to the grant at either the original or the new organization,
depending on the circumstances and the availability of funds in the
appropriate active grant account (see “Administrative
Requirements—Changes in Project and Budget—Prior-Approval Requirements”).
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Travel
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Allowable
as a direct cost where such travel will provide direct benefit to the
project.
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Employees
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Consistent with the organization’s established travel
policy, these costs for employees working on the grant-supported project may
include associated per diem or subsistence allowances and other
travel-related expenses, such as mileage allowances if travel is by personal
automobile.
Domestic
travel is travel performed within the recipient’s own country. For U.S. and Canadian recipients, it includes travel within and between any of the 50 States of the United States and its possessions and territories and also travel between the United States and Canada and within Canada.
Foreign
travel is defined as any travel outside of Canada and the United States and its territories and possessions. However, for an organization located
outside Canada and the United States and its territories and possessions,
foreign travel means travel outside that country.
In
all cases, travel costs are limited to those allowed by formal organizational
policy and, in the case of air travel, the lowest reasonable commercial
airfares must be used. For-profit grantees’ allowable travel costs may not
exceed those established by the FTR, issued by GSA, including the maximum per
diem and subsistence rates prescribed in those regulations. This information
is available at http://www.gsa.gov. If a recipient organization has no
formal travel policy, those regulations will be used to determine the amount
that may be charged for travel costs.
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Grantees
are strongly encouraged to take advantage of discount fares for airline
travel through advance purchase of tickets if travel schedules can be planned
in advance (such as for national meetings and other scheduled events).
Grantees
must comply with the requirement that U.S. flag air carriers be used by
domestic grantees to the maximum extent possible when commercial air
transportation is the means of travel between the United States and a foreign
country or between foreign countries. This requirement must not be influenced
by factors of cost, convenience, or personal travel preference. The cost of
travel under a ticket issued by a U.S. flag air carrier that leases space on
a foreign air carrier under a code-sharing agreement is allowable if the
purchase is in accordance with GSA regulations on U.S. flag air carriers and
code shares (http://www.gsa.gov/gsa/cm_attachments/GSA_DOCUMENT/110304_FTR_R2QA53_0Z5RDZ-i34K-pR.pdf).
(A code-sharing agreement is an arrangement between a U.S. flag carrier and a foreign air carrier in which the U.S. flag carrier provides passenger
service on the foreign air carrier’s regularly scheduled commercial flights.)
Applicants
and grantees should consult application instructions to determine how to
budget for travel costs under specific mechanisms and for certain types of
travelers because they are not all required to be budgeted as travel.
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Research
Patients
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If
research patient care is an approved activity of the grant-supported project,
the costs of transporting individuals participating in the research protocol
to the site where services are being provided, including costs of public
transportation, are allowable. The purchase of motor vehicles for this
purpose also may be allowable. (See “Research
Patient Care.”)
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