I thought I'd pass this along for your information. ----------------------------Original message---------------------------- February 23, 1994 Mr. Norwood J. Jackson, Jr. Chief, Financial Standards and Reporting Branch Office of Management and Budget New Executive Office Building, Room 10235 725 - 17th Street, N.W. Washington, DC 20503 Dear Woody: Enclosed is our recommended final interpretation of the treatment of clerical an administrative salaries under the July 1993 revision of Circular A-21. The proposed final interpretation is essentially the same as the draft we discussed at our meeting with the principal funding agencies on January 7. Some modifications to the language have been made in response to suggestions from the agencies and the Council on Governmental Relations, but the substance has not been changed. As indicated in the enclosed letter from the Executive Director of the Council on Governmental Relations*, the membership of the Council supports the interpretation, although they continue to oppose the A-21 provision that made th interpretation necessary. They also suggested a number of modifications to the language, most of which have been incorporated in the final document. The Council would like to see the interpretation issued as soon as possible. Since the interpretation has the support of both the agencies and the university community, we recommend that it be issued as soon as possible. The simplest way to accomplish this would be for your office to send the interpretation to the agencies under a brief cover memo. We will work with the agencies and COGR to disseminate the interpretation to the institutions. If you have any questions, please give me a call. Sincerely, Gary Talesnik Director Office of Grants Management cc: Milton Goldberg, COGR Geoff Grant/Dick Powers, NIH Luis Navarro, PHS Chuck Paoletti/Mike Kuc, ONR Bill Cole/Rick Hastings, NSF Frank McKune/Ted Tracy, HHS Directors, HHS Regional Division of Cost Allocation (* not enclosed for purposes of E-Mail) 2/23/94 OMB CIRCULAR A-21 TREATMENT OF ADMINISTRATIVE AND CLERICAL SALARIES Question Section F.6.b. of the July 1993 revision of Circular A-21 says that the salaries of administrative and clerical staff should normally be treated as indirect costs. This section goes on to say that direct charging of these costs may be appropriate where a major project or activity explicitly budgets for administrative or clerical services and the individuals involved can be specifically identified with the project or activity. What is the intent of thi provision and under what circumstances may these costs be directly charged to sponsored agreements? Answer This provision is intended to establish the principle that the salaries of administrative and clerical staff should usually be treated as indirect costs, but that direct charging of these costs may be appropriate where the nature of the work performed under a particular project requires an extensive amount of administrative or clerical support which is significantly greater than the routine level of such services provided by academic departments. The costs woul need to meet the general criteria for direct charging in Section D.1. -- i.e., "be identified specifically with a particular sponsored project... relatively easily with a high degree of accuracy," and the special circumstances requiring direct charting of the services would need to be justified to the satisfaction of the awarding agency in the grant application or contract proposal. The following examples are illustrative of circumstances where direct charging the salaries of administrative or clerical staff may be appropriate. o Large, complex programs, such as General Clinical Research Centers, Primate Centers, Program Projects, environmental research centers, engineering research centers, and other grants and contracts that entail assembling and managing teams of investigators from a number of institutions. o Projects which involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, searching literature, and reporting, such as epidemiological studies, clinical trials, and retrospective clinical records studies. o Projects that require making travel and meeting arrangements for large number of participants, such as conferences and seminars. o Projects whose principal focus is the preparation and production of manuals and large reports, books and monographs (excluding routine progress and technical reports). o Projects that are geographically inaccessible to normal departmental administrative services, such as seagoing research vessels, radio astronomy projects, and other research field sites that are remote from the campus. These examples are not exhaustive nor are they intended to imply that direct charging of administrative or clerical salaries would always be appropriate for the situations illustrated in the examples. Where direct charges for administrative and clerical salaries are made, care must be exercised to assume that costs incurred for the same purpose in like circumstances are consistently treated as direct costs for all activities. This should be accomplished through a "Direct Charge Equivalent" or other mechanism that assigns the costs directly to the appropriate activities.
