I think this is an excellent question. It is at the heart of understanding
how far we must go in codifying our costs.

 However, why stop with an non-federal externally funded project? Shouldn't
 we back up a step further and ask about the general fund Instruction
 accounts as well. If we are saying that on a federally funded restricted
 fund account a secretary is an unallowable direct cost, wouldn't the same
 hold true for our general fund Instruction accounts?

 Shouldn't we move all administrative and clerical costs of non-major
 programs to separate department administration accounts to be totally
 consistent with the like costs in similar circumstances standard? Isn't
 that what the CASB  text seems to be directing us to do? This conundrum is
 at the center of  trying to make sense of the standards.

Responding to the specific question -

We should be able to charge non-federal sponsors anything we can get from
them. The federal regulations truly only apply to federal and federal
pass-through awards. An industrial sponsor might even give you a
fixed-price agreement. Why shouldn't you be able to bill for the full costs
of that effort? The like costs in similar circumstances standard only
muddies the water. It is only for convenience, not by regulation, that most
institutions will move administrative costs for all sponsors to internal
funds.

If you do bill the non-federal administrative costs, how do you then handle
these exceptions in the Disclosure Statement and in your next indirect cost
proposal? If you include them in the research base, you are lowering your
indirect cost rate. You can't move them to the DA cost pool as these were
not like costs. (For that matter, how are people going to handle
administrative costs of major programs in subsequent calculations?)

I apologize for broadening the question; but it is a very good line of
discussion which will help us all frame how far we must go. I look forward
to seeing how others reply to this thread. I hope most will reply over the list.

Raymond A. Foss
Manager of Asset Management and Cost Analysis
University of New Hampshire
(603) 862-3466
=============================================================================
From:   SMTP%"xxxxxx@health.state.ny.us" 19-SEP-1996 18:51:07.45
To:     R_FOSS
Subj:   Administrative & Clerical Costs on Non-Federal Sponsored Agreements

Message-Id: <xxxxxx@gate1.health.state.ny.us>
Date:         Thu, 19 Sep 1996 16:23:40 -0400
Reply-To: Research Administration Discussion Group
 <xxxxxx@health.state.ny.us>
Sender: Research Administration Discussion Group
 <xxxxxx@health.state.ny.us>
From: Research Administration Discussion Group
 <xxxxxx@health.state.ny.us>
X-From:       "James F. Ball" <xxxxxx@MAGNUS.ACS.OHIO-STATE.EDU>
Subject:      Administrative & Clerical Costs on Non-Federal Sponsored
 Agreements
X-To:         xxxxxx@albnydh2.health.state.ny.us
To: Multiple recipients of list RESADM-L <xxxxxx@health.state.ny.us>

We have heard several different opinions on this topic from a number of sources
(federal auditors, audit firms, federal agency representatives, etc.) and are
interested to know how other institutions are planning on treating
administrative and clerical costs on non-federal sponsored projects, in light
of the A-21 F.6.b) rule and the May 8, 1996 incorporation of the four CAS
standards into A-21.

Are you planning to allow for budgeting and charging administrative and
clerical costs, for example, as a direct cost in non-federal sponsored
agreements? What is the general consensus on whether or not this violates the
"like costs in like circumstances" rule in A-21? We would be interested in
hearing from any institution willing to share its approach to this issue.

James F. Ball
Manager, Policies & Procedures
The Ohio State University Research Foundation
614-292-6278 Phone
614-292-4315 Fax
xxxxxx@magnus.acs.ohio-state.edu