Finance Administrative Policies and Procedures
Section: 4- Grants and Contracts Accounting
Policy Procedure: 4-3.02
Subject: Determining Direct vs. Facilities & Administrative (F&A) Costs on Sponsored Agreements
Effective Date: 4/8/1999
Responsible Department: Grants and Contracts Accounting


The purpose of this procedure is to provide general guidelines and procedures for determining whether costs may be charged to Sponsored Agreements as direct costs or facilities and administrative (F&A) costs.

General Guidelines

MUSC's Cost Accounting Standards (CAS) Policies and Procedures - Guidelines for Direct and Facilities & Administrative Costs, as approved by the Board of Trustees in April 1999, provides the University's policy governing charging costs to Sponsored Agreements. MUSC's policy incorporates Federal costing principles contained in Office of Management and Budget (OMB) Circular A-21, "Cost Principles for Educational Institutions", Federal Cost Accounting Standards, and generally accepted costing principles of non-federal sponsors.

  1. Direct Costs

    CAS Section 2 provides definitions and guidelines for determining allowable direct costs:

  2. Facilities and Administrative Costs

    CAS Section 3 provides definitions for determining allowable F&A Costs .

  3. Consistency Requirements

Definitions and guidelines provides the requirements for charging costs consistently as either direct or indirect.

The National Institutes of Health (NIH) Grants Policy Statement at also requires consistency in charging expenditures as either direct costs or F&A costs.

Questions regarding determination of direct vs. F&A costs should be addressed to the appropriate Grants and Contracts Accounting Accountant based on departmental assignment (see Distribution of Grants by Administrator) or at 792-2850.