Project Costs & Expenses

This section explains various types of costs and how to process expenses.

Direct Costs

Direct costs are costs that can be identified with a specific sponsored project or that can be directly assigned to project activities relatively easily with a high degree of accuracy.

Examples of direct costs include:

  • Salaries of technical staff
  • Equipment
  • Supplies and services
  • Fringe benefits
  • Telecommunications expenses
  • Travel
  • Participant costs
  • Subcontracts
  • Publication costs
  • Animals and animal care costs

Facilities & Administrative Costs

Also referred to as indirect costs or overhead, Facilities and Administrative (F&A) costs are essential general operating expenses and costs incurred in support of sponsored programs that are not readily identified with a single project, account, or transaction. F&A costs are an integral part of every proposal budget.

Examples of F&A costs include:

  • Setting up and managing Research Foundation accounts
  • Human resource administration
  • Sponsored projects administration
  • Accounting and finance services
  • Legal and audit costs
  • SJSU campus activities, such as:
    • building costs
    • insurance
    • utilities
    • maintenance and service contracts

SJSU and the Research Foundation establish the university’s F&A costs, which are then presented for review and audit to the U.S. Department of Health and Human Services (DHHS). For your reference a downloadable F&A Rates Chart [pdf] is available.

SJSU and DHHS will agree to the approved F&A rates to cover research, instruction, training, and other sponsored account activities, both on-campus and off-campus. The approved rates are then set forth in the Colleges and Universities Rate Agreement [pdf].

Fringe Benefit Rates

Each year the U.S. Department of Health and Human Services (DHHS) reviews proposed fringe benefit rates for the San José State University Research Foundation.

The approved rates become effective on July 1 of each year. Please review the Application of Fringe Benefit Rates Chart [pdf] for the current rates.

Expense Processing

The principal investigator is responsible for complying with the financial and administrative policies and procedures of each award.

Signature Authorization

Purchase requisitions or other instruments of project spending such as travel, materials and supplies, effort reports, and personnel time certifications must be signed by the individual who has signature authority for the project account. Signature authority may not be assigned to project staff unless the staff member occupies a managerial position within the administration of the project.

Additional Signature Requirements

If a principal investigator wishes to authorize another individual to sign for grant expenditures on their behalf, they must complete the Request for Additional Authorized Signers [pdf] and submit the completed form to the assigned Sponsored Programs manager. The request from the PI to assign alternative signature authority will be considered by the Research Foundation on a case-by-case basis.

Expense Standards

Sponsored Programs managers apply specific standards to expenses charged against sponsored or restricted funds awarded through grants, contracts, cooperative agreements, and other agreements.

The following principles are applied to determine whether expenditure will be approved:

Allowability - An allowable cost is one that complies with the requirements of the funding agency based on a determination of whether or not costs can be charged to a sponsored project as direct or F&A costs.

Allocable - A cost is allocable if the cost is included in the approved budget and is consistent with the scope of work contained in the proposal and resulting award.

Reasonableness - A reasonable cost is one in which the nature of the goods or services acquired or applied, and the amount involved reflect the action that a prudent person would have taken under the prevailing circumstances at the time the decision was made to incur the cost.

Availability - Means that funds are available prior to incurrence and expenditure. PIs are encouraged to contact their assigned sponsored programs analyst before making any commitment to funding or actual expenditure. Funds must be spent during the defined project period.

Consistency - In addition to considering whether or not the cost is necessary for the performance of the project, the nature and level of costs of the goods or services purchased should be consistent with sponsoring agency’s guidelines and with criteria that demonstrate common business sense.

Timeliness of the Requests for Reimbursements - all requests for reimbursements should be submitted within 30 days of the incurred expense.

For assistance or additional information on the project management phase, please contact us.


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