Stewardship and Compliance
for Stanford PIs

ALLOCATION
METHODS

 

Occasionally, you may need to purchase supplies and then allocate those materials and their costs to several projects. Purchases of chemicals, glassware, or other stores, for example, may be made "in bulk" and then apportioned to the various projects on which they will be used.

Sponsors realize that it is sometimes impossible to precisely allocate such costs, and governing regulations allow for the exercise of judgment.

From     OMB Circular A-21 - section J, 8, b, ( 1 ), ( c ) c

A precise assessment of factors that contribute to costs is not always feasible, nor it is expected. Reliance, therefore, is placed on estimates in which a high degree of tolerance is appropriate.

Distribution methods must be REASONABLE and must be DOCUMENTED. A 50 - 50 allocation of costs between two projects may be appropriate, but there must be an explanation in the project files to support that allocation. The basis for the allocation should RELATE TO THE WORK BEING PERFORMED on the projects. For example, here are some possible allocation methods:

  • base the allocation on project headcount
  • allocate based on numbers of experiments being performed
  • distribute materials and costs based on square footage of lab space
  • allocate based on the amount of some other related project costs, e.g., lab animal costs.

You may have noticed a few allocation methods that are NOT on this list. It it NOT appropriate to allocate costs solely on the basis of which project has the most money. It is also NOT appropriate to pool costs and charge them all to one project in one month and then to another - unless the materials involved are actually being used that way.

There is no "one right way" to allocate costs. Methods will vary based on circumstances. (One PI successfully allocated costs on the basis of numbers of file drawers used to store records.) The PI needs to exercise judgment, and then to document the selected method in the project files. A memo to the file can describe how, in the PI's judgment, the benefits to the involved projects warrant that allocation of costs.

NOTE: Clerical and administrative costs may NOT be collected and allocated among projects. Office supplies and other administrative expenses are presumed to be an indirect cost, and, in order to be charged directly, they must be specifically identified to and budgeted for a particular project. For federal sponsors, this must be a "major project." (See explanation of clerical and administrative charges.)
Navigation Tools
to Previous
Feedback