Research Administration Policies

RA65 Non-Personnel Costs

Policy Status: 


Subject Matter Expert: 

Senior Director of Research Administration, 814 865 1716,

Policy Steward: 

Senior Vice President for Research and the Associate Vice President for Budget and Finance



Non-personnel costs must follow the basic costing principles of reasonable, allocable and allowable as defined in RA10 Costing Principles for Sponsored Awards.  All non-personnel costs charged to sponsored awards must comply with University policy, as well as with any specific sponsor requirements and federal and state laws and regulations.

Certain non-personnel costs may not be appropriate as direct charges to a sponsored award, especially if such costs are included as part of the F&A cost. These may include office supplies, office copier services, mailing and postage services, and communication services. See RA21 Development of Proposal Budget and the Cost Accounting Standards FAQ for additional details.

Costs should be allocated and charged to the sponsored award directly when possible.  PIs should also verify that charges from internal Research Centers or other internal services are using rates approved by the Office of Budget and Finance before allowing such costs to be direct-billed to a sponsored award. See Policy FN27 Establishing and Billing Service Center User Rates for more detail on approved rates.

Below are more detailed policies regarding certain categories of non-personnel costs.


See Policy RA80 SubAwards and Subcontracts and Guideline RAG80 Subrecipient Monitoring.


A purchased service can be distinguished from a Subagreement by the nature of the work an organization will perform. An organization is considered a purchased service when it:

  • Provides similar goods and services to different clients within normal business operations;
  • Operates in a competitive environment; and
  • Provides goods and services ancillary to the operation of the program at a set price per unit

Purchased Services are processed on a purchase order through Shop OnLion.  Acquiring Services for the University, a decision tool for determining whether something should be considered a personal or professional service, a consulting service, or an honorarium, can be found in GURU.


Any use or procurement of external consultants on a sponsored award must follow Policy BS17 Use and Procurement of External Consultants.


Publication and printing costs (as defined in Uniform Guidance 2 CFR 200.461) are the only costs which can be incurred after the end date of a federal grant or contract. Penn State requires these costs to be incurred at least 30 days prior to the closeout date in order to ensure that they are included in the final invoice to the sponsor. The default closeout date under federal grants is 120 days after the end date (2 CFR 200.344). Penn State typically expects all such charges to be actualized against the account no later than 60 days after the end date. Please note that when charging such costs after the end date of the project, it may be necessary to ask Research Accounting to lift the hold close date. See Policy RA90 Finalization and Closure for more information about hold close dates and the closeout process.


See Policy RA70 Property & Equipment for full detail on capitalization, ownership, use and disposition.


Federal regulations require that federal funds not be used to acquire certain capital equipment unless it is first determined, through a pre-acquisition screening process, that similar equipment is not available for use; reference Uniform Guidance 2 CFR 200.318. The federal government's rationale for these regulations is that shared use of existing equipment promotes availability of equipment on college and university campuses, reduces unnecessary duplication of equipment, and consequently, frees up federal funds to be used in other categories of expenditure or for other projects.  See Procedure CR2055 Pre-Acquisition Screening of Federally Funded Capital Property.


Equipment should be purchased at the beginning of a project in order to get full benefit from the equipment use during the project period. Equipment purchases will generally not be permitted in the last 6 months of a project (especially a multi-year project) and definitely not during the last 90 days.


  • Capitalization threshold in the agreement may be different from that of the University.  Where thresholds differ, the more restrictive rule applies.
  • Ownership/title should be made clear prior to procurement.  Sponsor ownership imposes additional compliance burdens on the University.  All sponsored-owned equipment must have a sponsor tag and will be managed by the Property Inventory Department.
  • Sponsors may impose additional restrictions on use of the equipment, both during the period of performance and after the project is over.


Supplies are defined as all tangible personal property with a useful life of less than one year and/or a per-unit acquisition cost of less than $5,000 (2 CFR 200.1). The term “supplies” includes all computing devices with a per unit acquisition cost of less than $5,000. In the specific case of computing devices, charging as direct costs is allowable for devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award. Office supplies usually are not allowable as a direct cost to Federal sponsored projects. If included in a proposal, a Cost Accounting Justification Form should be completed to document the justification for office supplies to be included as a direct cost. More information regarding the allowability of materials and supplies can be found at 2 CFR 200.453.


Travel costs charged to sponsored awards must be directly related to the work being performed and included in the original or modified budget proposal. Travel to conferences or professional associations must be specifically mentioned in the proposal or must be clearly related to a requirement for dissemination of the sponsored research.

According to Uniform Guidance 2 CFR 200.475, an individual's travel can only be paid on a federally-sponsored award if the participation of the individual is necessary for the award and the costs are a direct result of the individual's travel for the federally sponsored award. Documentation should be maintained clarifying why the particular person is traveling, why the travel is necessary and how it benefited the project.

It is possible that the specific terms and conditions of an agreement will be more restrictive than the Uniform Guidance cost principles for federal awards. Commonwealth and other awards may also have restrictions. It is important for the traveler to review the terms and conditions of each agreement before a trip. If there is a question concerning the allowability of the trip given the terms of the agreement, the traveler must contact the Financial Officer or Research Administrator for guidance.

Penn State's Travel Policy provides detailed information on travel costs which should be reviewed by PIs and others before charging travel costs to sponsored awards.  Below are specific sections unique to sponsored awards and warranting special attention:

  • Sponsored Funds Travel
  • Air Travel 
  • Foreign Travel Using Sponsored Funds


All University employees must comply with all U.S. laws and regulations when traveling internationally, including the complex set of U.S. laws and regulations governing the export of controlled materials, software, technology, data, financial resources and services. It is required under Policy  AD89 University Export Compliance Policy, therefore, that an export compliance review be obtained prior to commencement of any International Travel to evaluate the proposed travel event against any applicable Export Control laws or regulations.  For international travel in support or furtherance of a sponsored research effort, whether or not such travel is reimbursed directly under a sponsored research restricted account, an export review may be obtained by either contacting the University Export Compliance Office ( or by registering the travel in the Travel Safety Network ( No export review is required for employees traveling internationally on personal vacation or attending conferences or other events solely at their own personal expense unless such travel is deemed specifically to be part of the employment of the traveler.  An export review is required, however, if the University or any third party contributes to funding any costs associated with the travel, including, but not limited to, salary reimbursement, travel expenses or incidental expenses. Failure to comply with any applicable U.S. Export Laws and Regulations may result in personal civil and/or criminal liabilities for the traveler, up to, and including, debarment, fines and/or imprisonment.  More information about export compliance impacts on International Travel may be found at the University Export Compliance Office website.


U.S. law, 49 U.S.C. 40118, known as the Fly America Act, requires travelers whose air travel is being financed by the U.S. government to use U.S. flag air carrier service for all international air travel when available. The Federal Travel Regulations Sections 301-10.131 through 301-10.143 define U.S. flag air carrier service and provide exception criteria for the use of non-U.S. flag air carrier service.

The traveler must use a U.S. flag air carrier on every portion of the route where service is provided unless the traveler qualifies for a waiver. Note that cost and/or personal convenience are not included in the exception criteria used to determine the non-availability of a U.S. flag air carrier.

Travelers using a non-U.S. flag air carrier requesting reimbursement from a U.S. government sponsored project must qualify for an exception under the act. The travel agent who booked the travel must complete and sign the Fly America Act Exception form at the time of booking to insure accurate documentation of the authorized exception at the time of booking.

It is recommended that Travel OnLion be used when exceptions to the Fly America Act are required. Travel OnLion staff will provide support and will complete the Fly America Act Exception form since they will have knowledge of the booking limitations at the time the travel was booked.

NOTE:  University Purchasing's Travel OnLion staff cannot complete the form when travel is booked externally because they did not make the travel arrangements and so have no knowledge of the booking limitations that occurred when the travel was booked.


Some flights may qualify as a U.S. flag air carrier if they are code-shared flights. The determining factor for identifying the use of a U.S. flag air carrier is the air carrier's designator code, which precedes the flight number (e.g., NW2222).

Travel Under the Commonwealth Master Agreement

The Commonwealth Master Agreement imposes additional travel restrictions.  These same requirements may be a part of other Commonwealth of PA-sponsored awards, even if not under the Master Agreement.

Travel rates. Commonwealth travel rates apply. The Commonwealth follows the U.S. General Services Administration (GSA) rates. These policies may be reviewed at the following web site: Manual 230.1 of the aforementioned website includes important details related to travel including:

  • The COP mileage reimbursement rate follows the GSA/Federal Travel Regulations (which PSU also follows).
  • Applicable per diem rates can be found here: If proposed hotels/per diems exceed the maximum amount (for instance if a conference hotel rate exceeds the rate for that area), the University can request a deviation from the GSA rate but must provide a rationale and document attempts made to find lower cost lodging. This request would be included as part of Attachment 2 submitted to the agency.
  • See Section 7.4 for receipts that must be obtained. They are not required to be submitted with invoices but must be retained in the event of audit by the Commonwealth.


Charging costs to the correct account demonstrates good administration of sponsored programs and helps ensure the University's compliance with federal requirements.  Cost transfers to or from sponsored programs should be processed when discovered, documented with appropriate justification and approved by the PI and/or Budget Administrator (or authorized delegates).


All sponsored award expenditures should be initially charged to the correct sponsored project. However, occasionally expenses are charged erroneously. When an erroneous entry affects a sponsored project, the correction must be made on a timely basis and sufficient information must be provided to allow for a clear audit trail back to the initially recorded expense.

Cost transfer documentation and timeliness of corrections involving sponsored projects is the department's responsibility. Cost Transfer Examples:

  • Correcting charges BETWEEN sponsored projects. For example, if lab supplies are incorrectly charged to one sponsored award and are moved to the correct sponsored project.
  • Correcting charges FROM sponsored projects TO department general funds. For example, if meeting expenses are erroneously charged to a sponsored project and later moved to a department general account.

The following are NOT Cost Transfers UNLESS they are untimely.   If any of these transactions are untimely, then they need to be coded as cost transfers and the untimely documentation requirements apply.

  • Charges that cannot be specifically identified as a direct charge to a sponsored account at the time of purchase or use (considered "original" or "initially recorded" charges); Examples include allocation of long distance phone bills, break-out/distribution of purchase orders and service center bills that cannot be allocated at the time of purchase. 
  • Initially recorded charges such as expenses charged through a Purchase Order, Purchasing Card, Service Center, copying charges, etc.

A cost transfer from one sponsored project to another may not be processed in these instances:

  • to cover cost overruns
  • to avoid restrictions imposed by the Sponsor
  • other reasons of convenience.


A cost transfer should be processed promptly after the error is discovered.  Untimely cost transfers may raise serious questions concerning the propriety of the cost transfer and may result in a cost disallowance. A cost transfer is considered "untimely" when it is not processed within the month following the date of the original transaction's posting to the System for Integrated Management, Budgeting, and Accounting (SIMBA). Violations of the deadline do not necessarily mean that the related expenditure is unallowable from a regulatory perspective, but require additional documentation providing an explanation as to why the transfer was not done on a timely basis.

The justification must provide a full explanation for the delay in processing the correction (cost transfer). The justification should also identify steps taken to prevent the error from occurring again, if appropriate. 


A non-personnel cost transfer is documented by processing a journal entry in SIMBA. Adequate justification and documentation of the reason for the transfer must be part of the explanation section of the journal entry. Explanations should disclose why something happened, not just what happened. For example, "to correct error" is not an adequate justification. A better justification would be the following: "Correction needed because wrong account inadvertently charged due to coding error by staff entering the distribution." The reason for the error must be included as part of the justification (e.g. Due to…). The documentation should include a brief description of what is being transferred and why it belongs on the sponsored award to which it is being transferred. See Policy RA60 Cost Management for additional guidance regarding cost transfer justifications.


For questions, additional detail, or to request changes to this policy, please contact the Office of the Senior Vice President for Research or the Office of Budget and Finance.



BS17 Use and Procurement of External Consultants

FN27 Establishing and Billing Service Center User Rates

RA10 Costing Principles for Sponsored Awards

RA21 Development of Proposal Budget

RA40 Compliance with Federal Export Regulations

RA60 Cost Management

RA70 Property and Equipment

RA80 Subawards and Subcontracts

RA90 Finalization and Closure

Revision History:

  • July 11, 2023 - Editorial changes:
    • References to the Corporate Controller changed to the Associate Vice President for Budget and Finance
    • References to the Office of the Corporate Controller changed to the Office of Budget and Finance
  • November 28, 2020 - Updated to reflect UG revision
  • November 26, 2020 - Updated to reflect issuance of FN27 (replacing AD15)
  • October 15, 2020 - Updated to reflect new SIMBA terminology
  • September 19, 2019 - Changed Vice President for Research to Senior Vice President for Research
  • February 26, 2016 - This new policy (incorporating parts of RA16, RA19 and RAG22) has been created as part of the policy reorganization brought about by the implementation of the Uniform Guidance (2 CFR 200).
  • March 7, 2005 - Editorial changes to correct links.
  • February 20, 1998 - (Reformatted for GURU from OSP, dated September 1994.)


Date Approved: 

February 22, 2016

Date Published: 

July 8, 2020

Effective Date: 

February 26, 2016