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Budget Preparation and Cost Principles


Participant Support Costs Must be tracked in a Separate Account

Section 200.75. Participant support costs are direct costs such as stipends or subsistence allowances, travel allowances and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with conferences or training projects.

  • Participant support costs should be excluded from the MTDC.  See also MTDC.

Impact at the UMBC:

  • UMBC already requires tracking of participant support costs by setting up a separate project. 


Administrative Costs may be charged as Direct Costs under Certain Conditions

Administrative Costs as Direct Costs.  Administrative or clerical salaries and expenses are allowed as direct costs when the activities are integral to a project, can be specifically identified, are included in the budget or have prior approval, and are not also recovered as indirect costs (Section 200.413 and 200.430). “Integral” is defined as essential to the accomplishment of the project’s goals and objectives, rather than necessary for the overall operation of the institution.

Impact at UMBC:


Computing Devices allowed as a Supply – Chargeable as a Direct Cost

Cost of Computing Devices: Section 200.453 allows computing devices to be charged as direct costs if they are essential and allocable, but not solely dedicated, to the performance of a Federal award.

Section 200.20 defines a computing device as a “machine used to acquire, store, analyze, process, and publish data and other information electronically, including accessories (or ‘peripherals’) for printing, transmitting and receiving, or storing electronic information.”  To be considered a supply cost, the cost of the computing device may not be equal to or exceed $5,000.

Impact at UMBC:

  • Computing devices should be itemized in your proposal budget and their use in the project clearly justified in the budget justification.
  • The project must not have reasonable access to other devices or equipment that can achieve the same purpose. Devices may not be purchased for reasons of convenience or preference.


Payouts for Accumulated Leave and Compensation Claims are Allowable

Section 200.431 The cost of compensation paid to employees for authorized absences, payments for unused leave when an employee retires or terminates employment, and actual claims for workers compensation, unemployment compensation, severance pay, and similar benefits are allowable as direct costs. Cost must be recognized in the period that the leave is taken and paid for when the entity uses the cash basis of accounting.

Impact at UMBC:

  • None


Publication Costs after the Period of Performance are Allowable

Publication and Printing Costs: Section 200.461 clarifies that non-Federal entities may charge the Federal award before closeout for the costs of publication or sharing of research results if the costs are not incurred during the period of performance of the Federal award.

Impact at UMBC:

  • In developing your proposal, make sure that the costs for publication and printing are specified in the budget.  The budget justification should include an explanation of why the costs will be incurred post-award.
  • Departments must work with OCGA regarding the charging of these costs after the termination of the award.  Costs must be charged within 90 days of termination.


Short-term Travel Visas for Recruitment are Allowable as Direct Costs

Short-term travel visas in connection with recruitment efforts are allowable as direct costs provided they can be clearly identified as directly connected, critical and necessary to the project. (Section 200.463) Recruiting Costs (d)).

Impact at UMBC:

  • Departments must maintain documentation supporting this cost in accordance with the UG requirements.


Travel Costs for Conferences

Family-Friendly policies in regards to travel costs: Section 200.474 has been amended to allow the cost of identifying, but not providing, temporary locally-available dependent care resources for travel to conferences.  If the institution implements a policy that these costs are allowed, the policy must be implemented consistently across all sources of funds.  Travel costs for dependents are unallowable, except for travel lasting 6 months or more.  Must have prior approval from the awarding agency.  (Section 200.474(2))

Conference Costs: Section 200.432 confirms that costs associated with intra-campus meetings are unallowable.

Impact at UMBC:

  • UMBC does not currently have a policy which allows for the direct charging of costs associated with identifying dependent care resources for travel to conferences.  Therefore, this may NOT be charged to Federal grants.


Allowable Expenses for Foreign Activities

Exchange Rates: Cost increases due to fluctuations in exchange rates are allowable subject to the availability of funding and prior approval. The institution must review local currency gains to determine the need for additional funding before the expiration date of the award.  (Section 200.440)

Value Added Tax (VAT) is an allowable expense if it is charged for the purchase of goods or services and the non-Federal entity is legally required to pay in country.  Any refunds or applicable credits resulting from the payment of VAT taxes must be credited to the awarding agency (Section 200.470)

Impact at UMBC:

  • If applicable, additional documentation for foreign subrecipients may be needed to demonstrate requirement ‘to pay in country VAT tax’.


New Exclusions from MTDC

Modified Total Direct Cost (MTDC) should only include salaries and wages, fringe benefits, materials and supplies, services, travel, and subgrants up to the first $25,000 of each subaward (regardless of the period covered).  Specifically excluded from the MTDC are equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000.  (Section 200.68The Uniform Guidance further excludes participant support costs and rental costs.

Impact at UMBC:

  • UMBC already requires projects to track participant support costs in a separate account See references to Participant Support Costs.
  • The MTDC is the basis by which Facilities and Administrative (F&A) costs are charged to federal awards. F&A rates are negotiated campus-wide.