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Cost Principles Guide

The Uniform Guidance issued by the White House Office of Management and Budget includes revised cost principles for federal awards made on or after December 26, 2014. This Cost Principles Reference Guide highlights select items of cost that should be considered in the budget preparation process and post-award management, in accordance with the Uniform Guidance.

Overview of Cost Principles

"Direct costs" are those that can be identified specifically with a particular sponsored project or other internally or externally funded activity. In contrast, "indirect costs," or facilities and administrative (F&A) costs, are those, such as building operations and maintenance, administrative personnel and systems, and other similar costs, which benefit many activities.

For any cost to be allowable under a federal award, it must:

  1. Be necessary and reasonable for the performance of the award and allocable
  2. Conform to any limitations or exclusions set forth in applicable regulations or in the award itself
  3. Be consistent with policies and procedures that apply uniformly to both federally financed and other BYU activities; and
  4. Be accorded consistent treatment


Description Directly Chargeable to a federal project? Prior agency written approval required? BYU Implementation
Administrative & Clerical Salaries and Costs (200.413/200.430) Yes, if they are integral to the project, can be specifically identified, and are not also recovered as indirect costs Yes, budget justification must explain integral nature of the services to the project Must be specified in proposal budget and approved within the agency guidelines. See ORCA or Grants & Contracts Accounting for more information
Computing Devices (under $5,000) (200.20/200.453) Yes, provided they are essential and allocable (but not necessarily soley dedicated) to the project. 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 No, but computing devices must be itemized in the detailed budget and the budget justification must explain how the devices are essential and allocable to the project. PI's and departments should maintain documentation that describes how the proposed computing device meets the requirements for allowability and allocability
Exchange Rates (200.440) Yes, cost increases due to fluctuations in exchange rates are allowable subject to the availability of funding Yes, where the change requires additional federal funding or a reduction in scope. Post-award changes must be requested in writing before a change is made. Contact your ORCA Research Administrator
Participant Support Costs (200.75/200.456) Yes, items 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. Yes. Budget for PSC is not flexible and may only be used for these costs. BYU requires projects to track participant support costs in a separate R account in order better meet the federal requirements for separate budgeting of these costs.
Taxes (including VAT)(200.470) Yes, except taxes from which exemptions are available, special assessments on land, and federal income tax. No. Additional documentation for foreign subrecipients may be needed to demonstrate requirement to pay in country VAT tax.
Visas (short-term) (200.463) Yes, if they are in connection with recruitment efforts and can be clearly identified as directly connected, critical and necessary to the project. No, but they should be specified in the budget justification PI/Department must maintain documentation to support these costs as directly connected, critical and necessary to the project.