Stanford's policy, which complies with the requirements of OMB Circular A-21 Section F.6.b and Cost Accounting Standards (CAS), requires that:

1. technical salaries and expenses (pertaining to a project's scope of work) be charged directly to sponsored agreements where identifiable to and provide direct technical benefit to a particular sponsored agreement
   
   
2. administrative expenses (pertaining to a project's administration) be charged directly when all of the following criteria are met:
   • The administrative expense is for the performance of one or more of the activities or projects listed in the A-21 examples of major project in Section V. of these guidelines. In order for the administrative activity(ies) to qualify for direct charging to federal sponsored projects, they must be significantly greater than the routine level of such services provided by academic departments.
     
     
   • The administrative expenses can be identified specifically with a particular sponsored project or activity, or can be directly assigned to the project or activity relatively easily with a high degree of accuracy and provide direct benefit to the project.
     
     
   • The administrative expenses are explicitly listed in the approved proposal budget and are not specifically disapproved in the award notice. NIH modular grants or similar grant instruments do not require line-item budgets.

     Note: Rebudgeting authority may be used to charge administrative expenses not included in the approved budget if specific rebudgeting authority for clerical and administrative expenses is allowed by award and sponsor rebudgeting guidelines. See, for example, NIH guidelines "Notice-Treatment of Administrative and Clerical Salaries Under NIH Grants."

   • Explicit budget justifications meeting the guidelines in RPH policy 10.1 are included in the proposal (either in the initial submission or after-the-fact if not known at time of initial submission). NIH modular grants or similar grant instruments do not require line-item justifications. However, Stanford does require an overall justification in the budget narrative that identifies the project as major and describes those aspects of the project that make it major.

     Note: Rebudgeting authority may be used to charge administrative expenses not included in the approved budget if specific rebudgeting authority for clerical and administrative expenses is allowed by award and sponsor rebudgeting guidelines. See, for example, NIH guidelines.

Note: When costs that are normally administrative (e.g. office supplies, postage, local telephone costs, and memberships) are planned and used for a project's technical scope of work, the project does not need to be major for those costs to qualify as technical costs and to be charged direct. They must, however, meet the other criteria (specifically identified to and benefit the project, explicitly included and justified in the budget, and not specifically disapproved by the sponsor) in order to be direct charged.

Deans' office administrative activities must be consistently treated as indirect costs. Accordingly, no Deans' office administrative expenses shall be charged directly to sponsored agreements. Deans' sponsored project activities are subject to this policy.

If the administrative expense does not meet the criteria for direct charging as described above, and if the expense is to be incurred, the administrative expense shall instead be charged to department or school activities/accounts within Function 1 (Instruction and Departmental Research).

If the administrative expense does meet the criteria for direct charging as described above and:

• the sponsor specifically disapproves the expense,
• the scope of work is not reduced, and
• the expense is still incurred in support of the project,

the expense shall be accounted for as cost sharing. Only the actual effort or supplies expended by the project and not funded by the sponsor shall be cost shared, which may be less than the amount originally proposed. (See questions 16. through 20. in the Q&A section for examples.)