Ruth:

A topic near and dear to my heart.  I've argued this in the past.

There was an award for research given to a PI that included budget for a
certain item of equipment.  Unfortunately, it didn't exist at the time.
 The PI decided to build it  himself.  We set up a separate account to
track the costs.  In this account, we budgeted salaries & wages,
benefits, materials, supplies and IDC on all of it.  At the end of
construction, the entire account was capitalized.

There are administrative costs involved in constructing a piece of
equipment just as there is in conducting the research.  These costs are
a legitimate addition to the total cost and should be capitalized just
as we would for any other item of equipment where shipping and handling
and site preparation is involved.  We would capitalize those costs.
 It's no different from an accounting viewpoint.

Greg Schmidt

Ruth Tallman wrote:

>Good Afternoon,
>
>This is a question for the financial gurus out there.  One of our
>centers is fabricating a large piece of equipment.  Two technicians have
>been hired specifically to build the equipment.  I know that the
>technician wages can be capitalized.  But my question is:  Should/could
>the F&A on the wages be waived?  What is your institutional policy?
>
>Your input will be greatly appreciated!
>
>Ruth Tallman
>Office of Research and Sponsored Programs
>Lehigh University
>526 Brodhead Avenue
>Bethlehem, PA  18015
>Phone:   (610)758-3024
>FAX:    (610)758-5994
>E-mail:   xxxxxx@lehigh.edu
>
>
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