Responsible Officer: Director

Responsible Unit: Award Management

Effective date: July 1, 2008

Last revised on: July 21, 2011

Policy Statement

In extremely exceptional circumstances, expenditures generally considered F&A costs may be treated as direct costs under the directives of the DS-2 (the University Cost Accounting Standards (CAS) Board Disclosure Statement) and compliant with OMB Circular A-21, Appendix A.

The Office of Sponsored Research (OSR) must grant prior written approval before encumbrances and expenditures may be claimed as direct charges to sponsored project accounts for items consistently reimbursed as F&A costs. Such requests are considered only when overwhelming support is furnished. OSR closely scrutinizes any justification provided to support the direct charging of costs that represent inconsistent treatment from that described in the University DS-2.

Reason for Policy

This policy serves to protect the University from risks related to federal regulations and audits regarding the use of sponsored funding for the purchase of items normally reimbursed as F&A costs.


If a research program meets the criteria of a “major project” according to OMB Circular A-21, Exhibit C, direct charging of administrative or clerical staff salaries may be appropriate.

Procedures and Related Policies

The requestor is required to supply OSR with a completed copy of the Cost Accounting Standards Exemption Request Prior Approval Form, including the following information:

  • The explicit amount of the costs.
  • A detailed description of the costs.
  • Justification and support of the costs as demonstrated in proposals and accompanying budgets.
  • Reasons (if applicable) the costs were not appropriately detailed and supported in the original proposal.

OSR Research Tool Kits



Questions and concerns can be submitted online at Ask OSR or by using the OSR staff directory. Within RAMSeS, the “Speak to Someone” option assists in locating the staff member best suited to address project-specific issues.


Research Administration Glossary at Carolina

1. Cost Accounting Standards Exemption Request Memorandum, 2003.

2. The University of North Carolina at Chapel Hill Cost Accounting Standards (CAS) Board Disclosure Statement.

3. OMB Circular A-21, Appendix A, CAS 9905.502, Consistency in Allocating Costs incurred for the Same Purpose by Educational Institutions.

Revision History

The policies in the Office of Sponsored Research Policies & Procedures Manual supersede any OSR policies, procedures and appendices previously included in the University Business Manual, a publication of UNC Chapel Hill’s Division of Finance.