This page presents definitions for the following terms:
Administrative expenses, Technical expenses, Major project or activity, Non-major project or activity, Direct costs, Facility and Administrative (F&A) or indirect costs, Specifically identified, Pooled allocation method, Rotation of costs, Accounting for effort, and Cost Sharing.

"Administrative expenses" are salaries and related benefits of those employees who perform non-technical support activities, and supplies and other expenses used to provide clerical or administrative project support. Examples of administrative expenses are the salaries, wages, and fringe benefits of administrative and clerical staff; office supplies; postage; local telephone costs; and memberships. Such costs are normally included in F&A (indirect) costs, but may be charged directly to a government sponsored project if it is a major project and the cost meets the remaining policy criteria.

"Technical expenses" are costs that provide direct benefit to a sponsored project's scientific or technical scope of work. Some examples of technical expenses are the salaries, wages, and fringe benefits of the PI(s) and technical or research employees; laboratory supplies; telephone toll charges; animals and animal care costs; non-administrative computer costs; travel costs; and specialized shop costs. (See questions 9. through 15. in the Q&A section for examples of costs normally considered administrative that, when used for a project's scope of work should be charged as direct costs to the project.)

"Major project or activity," as defined in A-21, is a project or activity that requires an extensive amount of administrative or clerical support, which is significantly greater than the routine level of such services provided by academic departments. Major projects/activities are those that are administratively intensive and are not necessarily defined by the amount of funding.

"Non-major project or activity" is a project or activity that is not administratively intensive and only requires the level of administrative or clerical support that is routinely provided by academic departments. An aspect of the non-major concept is the limited ability to measure or quantify administrative effort provided to a specific project/activity. Some elements and examples of non-major projects/activities are:

• No extraordinary data collection requirements
• NIH Career Development (K) Awards
• NASA Training Grants
• NSF awards that support one PI and one or two graduate students (however other circumstances may make the project major)

"Direct costs" are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity; or that can be directly assigned to such activities relatively easily and with a high degree of accuracy.

"Facility and Administrative (F&A) or indirect costs" are those costs that are incurred for common or joint objectives, and therefore cannot be identified specifically with a particular sponsored project, an instructional activity or any other institutional activity.

"Specifically identified" means that the cost or effort in question can be directly linked to and directly benefits a sponsored project or activity in the same proportion as the amount charged.

"Pooled allocation method" means a process that collects or "pools" the costs of the labor of multiple employees or supplies and expenses, and then allocates the pooled costs to multiple sponsored agreements based on some common characteristic, such as modified total direct costs, square feet, or some other criteria that reflect the relative benefit received by the projects.

"Rotation of costs" means a process of charging expenses to multiple sponsored agreements by rotating the charging of successive purchases from one agreement to another regardless of the benefit to the sponsored agreements. (Stanford policy disallows this practice.)

"Accounting for effort" means a documentation of effort through Personnel Action Forms (PAFs), Lab Time Cards, or other effort allocation processes. Sample effort allocation tools can be found on the Effort Allocation Resource Page.

"Cost Sharing" means that portion of total project costs of a sponsored agreement borne by the University rather than the sponsor. According to the Stanford Cost Sharing policy, committed cost sharing is the amount of project costs that Stanford agrees to contribute as part of the performance of the sponsored agreement. Committed cost sharing becomes part of the Organized Research base upon which F&A rates are calculated.