The issue is that OMB A-21 is not always the final authority for what might be an allowable cost for a Federal program. If the program's legislative authority and/or regulations allow the expense as a permissible service, associated costs could be an allowable expenditure, particularly if it has been written into the funded proposal to help meet objectives--the funding agency obviously sees the cost as directly benefiting the project. Our institution has an NSF grant where we're doing this very thing as part of participant costs, and we just went through A-133 audit with no findings.

Since this cost has been approved in the funded proposal by the funding agency, this is a case wherein the grant manager from the funding agency should confirm that the cost is indeed allocable and allowable as per the program authorities. In the event the cost raised concerns for an auditor, I would keep a copy of the funding agency validation of allocability/allowability (complete with the program authority citation) with the budget records.

Regards,

Savona Holmes

Savona Holmes, Director
Office of Grants and Contracts
Lewis-Clark State College
Lewiston, ID 83501

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@lists.healthresearch.org] On Behalf Of Sandy Shriver
Sent: Thursday, November 10, 2011 7:40 AM
To: xxxxxx@lists.healthresearch.org
Subject: [RESADM-L] Indirect Payment?

I have an issue with one of our federal grants on a proposed expense.  The PI has a training at which County School Teachers attended.  The PI cannot pay the teachers a stipend to attend since they attended on a regular workday and this would be double-dipping.  However, the schools had to hire substitutes for the regular teachers who went to the training.  And the PI wants to pay the County Schools the cost of the substitutes and said that it is done on federal awards all the time and has been done by other state higher ed institutions of which she is aware.

I said that this is an unallowable cost because we cannot pay the salary of the substitutes since they did not directly serve the purpose of the grant.  The PI believes that it is allowable because it was written into the proposal and approved by the granting agency (NASA).  I maintain that it is still unallowable per A-21, J.10. which states "Charges to sponsored agreements may include reasonable amounts for activities contributing and intimately related to work under the agreements..." And we have to meet the requirements of the OMB and A-21 to ensure compliance for audit purposes.

Anyone have any thoughts on this?  Just want to clarify if I am on the right track or not.

Thank you,
Sandy Shriver
Office Administrator Sr.
Fairmont State University
1201 Locust Avenue
Fairmont, WV  26554
304-367-4684 (phone)
304-367-4850 (fax)
xxxxxx@fairmontstate.edu

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