GLOSSARY OF TERMS IN A-21

A-21:  A-21is a circular produced by the Office of Management and Budget (OMB) which is intended to provide basic Cost Principles for Educational Institutions when administering sponsored agreements......in other words, what can and cannot be included in the F&A costs.

Allocable:  Any cost that can be allocated to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objective in proportion to the benefits received and has not been disallowed by some specific section of A-21.

Allocation:  the process of assigning a cost or a group of costs to one or more cost objectives proportional to the benefits it receives.

Allowable Costs:  Expenses that can be charged either directly or indirectly to a project or sponsored agreement.  These can be included in the F&A rate study based on the following:

• The expense benefits only the sponsored agreement for which it is incurred - a direct cost.
• The expense benefits both the sponsored agreement and the other work of ours. (such as teaching, extension, etc)
• The expense must be necessary for our overall operation and benefits our sponsored agreements - such as utility costs, which are indirect F&A costs

Direct Costs: Costs that can be specifically identified with a particular project or sponsored agreement.

Facilities and Administrative Costs (F&A) previously known as Indirect costs:  Those costs that cannot be specifically tied to a particular project or sponsored agreement, but which are still necessary for us to operate.  Such as the electric costs which are associated with lights in the buildings within which we conduct research.

• Instruction: the teaching and training activities of an institution including those offered for credit for a degree and those offered for non-credit.  Generally includes sponsored instruction and training, and departmental research, however it may also include departmental research and may, where agreed to, include university research.
  
• Organizational Research: all research and development activities of an institution that are separately budgeted and are accounted for.  This included sponsored research and university research (unless agreed to have been included in instruction).
  
• Other Sponsored activities: programs and projects financed by Federal and Non-Federal agencies and organizations which involve the performance of work other than instruction and organized research - i.e. health service projects.
  
• Other Institutional Activities:  All activities of the institution except instruction, departmental research, organized research, and other sponsored activities identified above; F&A cost activities included in section F; and specialized service facilities described in section J.44. i.e. operation of residence halls, dining halls, hospitals and clinics, and others as described in section B of A-21.

Sponsored Agreement: Any grant, contract, or other agreement between the institution and the Federal Government.

Unallocable: Any cost that may NOT be allocated to a particular sponsored project's cost objective.

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