Research Administration Policies

RA65 Non-Personnel Costs

Policy Status
Active
Subject Matter Expert
Jason Guilbeault, AVP for Research (Post-Award Contractual Compliance), 814-863-9330, jpg6569@psu.edu
Policy Steward
Senior Vice President for Research and the Associate Vice President for Budget and Finance

Contents

POLICY:

Non-personnel costs must be allowable, allocable, and reasonable, 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 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.

SUBAWARDS, SUBCONTRACTS, AND SUBRECIPIENT MONITORING:

See RA80 - Subawards and Subcontracts and RAG80 - Subrecipient Monitoring.

PURCHASED SERVICES:

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 PSUbuy.

EXTERNAL CONSULTANTS:

Any use or procurement of external consultants on a sponsored award must follow Policy CP07 Use and Procurement of External Consultants.

PUBLICATION AND PRINTING COSTS:

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 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 RA90 - Finalization and Closure and RA2090 - Closeout Timeline and Checklist for more information about hold close dates and the closeout process.

PROPERTY/EQUIPMENT:

Equipment is defined as "tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost that equals or exceeds the lesser of the capitalization level established by the recipient or subrecipient for financial statement purposes, or $10,000" (2 CFR 200.1). Please note that projects starting prior to 7/1/2025 will be subject to the previous definition of equipment, i.e., tangible property with a per-unit acquisition cost of $5,000 or greater. Please see Penn State's Internal Uniform Guidance: Executive Summary regarding the 7/1/2025 transition.

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

PRE-ACQUISITION SCREENING

Federal regulations at 2 CFR 200.318 require that recipients of federal funds avoid the acquisition of unnecessary or duplicative items. Recipients are encouraged to use preexisting, excess, and/or surplus equipment and property when it is feasible, instead of purchasing new equipment and property. The federal government's rationale is that shared use of existing equipment promotes availability of equipment, reduces unnecessary duplication of equipment, and frees up federal funds to be used in other categories of expenditure or for other projects. To comply with these regulations, Penn State uses a pre-acquisition screening process. See Procedure CR2055 Pre-Acquisition Screening of Federally Funded Capital Property.

TIMING

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.

MAJOR CONSIDERATIONS:

  • 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:

Supplies are defined as "all tangible personal property other than those described in the equipment definition," i.e., tangible property with a per-unit acquisition cost of less than $10,000 (2 CFR 200.1).

"A computing device is a supply if the acquisition cost is below the lesser of the capitalization level established by the recipient or subrecipient for financial statement purposes or $10,000, regardless of the length of its useful life" (2 CFR 200.1). "Charging computing devices as direct costs is allowable for devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award" (2 CFR 200.453(c)).

Please note that projects starting prior to 7/1/2025 will be subject to the previous definition of supplies, which defined supplies as tangible property with a per-unit acquisition cost of less than $5,000. Please see Penn State's Internal Uniform Guidance: Executive Summary regarding the 7/1/2025 transition.

Office supplies usually are not allowable as a direct cost to Federal sponsored projects (2 CFR 200 Appendix III 6.b.(2)). 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:

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. TR02 - Penn State Travel Policy must be followed for sponsored travel.

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. As a general rule, travel should not be charged to a project unless the individual traveling has effort charted or cost-shared on the project/grant. If travel benefited an award and effort was not charged, the uncharged effort must be considered voluntary uncommitted cost sharing. In no circumstances can effort spent during travel for one sponsored award be charged to another sponsored award.

It is possible that the specific terms and conditions of an agreement will be more restrictive than TR02 - Penn State Travel Policy or the Uniform Guidance cost principles. 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 Research Administrator or the Strategic Finance Partner team for guidance.

TR02 - Penn State 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

EXPORT COMPLIANCE

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 AD89 - University Export Compliance Policy 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 (Export@psu.edu) or by registering the travel in the Global 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 Unit website.

FLY AMERICA ACT

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 Waiver Checklist at the time of booking to insure accurate documentation of the authorized exception at the time of booking.

It is recommended that SAP Concur or Anthony Travel be used when exceptions to the Fly America Act are required. SAP Concur or Anthony Travel staff will provide support and will complete the Fly America Act Waiver Checklist since they will have knowledge of the booking limitations at the time the travel was booked.

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

CODE-SHARED FLIGHTS

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: https://www.budget.pa.gov/Services/ForCommonwealthTravelers/PoliciesAndProcedures/Pages/default.aspx. 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: https://www.gsa.gov/travel/plan-book/per-diem-rates. 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.

TRANSFERS OF NON-PERSONNEL COSTS:

Charging costs to the correct account demonstrates good administration of sponsored programs and helps ensure the University's compliance with federal requirements. Costs must be allocated to a specific sponsored program, amongst several sponsored programs, and/or non-sponsored funds based on the relative benefits received by each sponsored program or other activity. 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). See RA67 - Cost Transfers on Sponsored Awards for more information.

FURTHER INFORMATION:

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.

CROSS REFERENCES:

CP07 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

RA67 Cost Transfers on Sponsored Awards

RA70 Property and Equipment

RA80 Subawards and Subcontracts

RA90 Finalization and Closure

Revision History:

  • February 23, 2026 - Updated cost transfer section in conjunction with the release of RA67. Also includes editorial changes for the launch of the finance shared business model (replacing Travel OnLion references to SAP Concur, replacing Travel Safety Network with Global Safety Network, replacing the Fly America Act Exception form with the Fly America Act Waiver Checklist, and replacing references to Financial Officers with Strategic Finance Partner Teams), and All Central Procurement policies renumbered from BS to CP nomenclature
  • February 5, 2025 - Updated to reflect change of SME to AVP for Research (Post-Award Contractual Compliance)
  • November 11, 2024 - Updated to change reference from Shop OnLion to PSUbuy
  • October 12, 2024 - Updated to explicitly include the same language used in RA60 for cost transfer justifications.
  • October 5, 2024 - Definitions of Equipment and Supplies updated in accordance with revision to 2 CFR 200.1
  • 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
Date Published
Effective Date