» Financial Management

Please see the Guidelines for Direct Charges for a list of typical expenses and whether they are part of Facilities and Administrative (F&A), not chargeable, unallowable expenditures or able to be directly charged to sponsored projects.

Guidelines for Direct Charges

I.               PURPOSE

For its sponsored awards, the University must provide adequate documentation to support expenditures and demonstrate that costs have been appropriately reviewed and determined to be allowable for the sponsored award. 

II.             POLICY

For a cost to be charged to a sponsored award (grants, contracts, etc.), the transaction must include adequate documentation to support the nature of the expense. The Principal Investigator (PI) must certify the transaction and that the expenditure is appropriate and allowable for the award. By authorizing the transaction, the PI is certifying that the expense is:

• Reasonable, allocable, and necessary to fulfill the requirements of the project,
• Allowable under the terms and conditions of the award,
• Allowable under the Uniform Guidance (for federal awards), other sponsor expenditure policies (for non-federal awards), or Chapman’s expenditure policies when the sponsor does not have specific requirements. 

In addition to the PI’s certification, the Sponsored Projects Services (SPS) must review and approve all award expenditures before payment. SPS verifies that:

• The costs are allowable under Uniform Guidance (for federal awards), other sponsor expenditure policies (for non-federal awards), or Chapman’s expenditure policies when the sponsor does not have specific requirements.
• Award funds are available for expenditures for the period of performance

The University's practices meet the requirements of the Uniform Guidance Section 303. Internal Controls, Section 200.403 Factors affecting allowability of costs, and Section 403. Compensation-personal services. 

III.            PROCEDURES

A. ADEQUATE EXPENDITURE DOCUMENTATION

Expense documentation and justification must support the nature of the transaction when reviewed by SPS, auditors, sponsors, or others who may require access and are unfamiliar with the project. The payment request must be accompanied by documentation such as invoices, original receipts, and registration forms.

If the nature of the transaction is not apparent or cannot be understood by someone unfamiliar with the project, the submitter must include information to support how the expense benefits the project.  For example, when invoices contain only parts of a number, the submitter should ensure that the record in PeopleSoft and Concur includes adequate detail supporting the costs. 

Uniform Guidance, Section 200.403 Factors affecting allowability of costs addresses the requirements of allowability of charges to sponsored awards.  If an expenditure is considered generally unallowable but permitted under the agreement, the submitter must note this exception in the text with the appropriate reference. For example, if alcohol (not allowed under Uniform Guidance) is being charged to a federal award but has been approved by the sponsor for the award (e.g., for a conference award), the text should include something like the following: 

“Alcohol allowed on this project per Section XX of the grant agreement.”

 Charges for unallowable expenses on sponsored awards will be returned unless the expense record includes a reference to an exception in the agreement.

B. CERTIFICATION FOR APPROPRIATENESS AND ALLOWABILITY

Since the PI is the person with ultimate responsibility for and is most familiar with the conduct of the project, the PI is the best person to certify whether an expense is appropriate for a project. The PI should also be familiar with the sponsor’s requirements regarding the allowability of costs.

The PI will certify that the costs are allowable, allocable, and reasonable for the project for all accounts payable documents, including purchase requisitions/orders, direct pays, hourly student and staff wages, and P-card transactions using the Concur and PeopleSoft (etc.) workflow approval processes, consistent with college/school requirements.  In many cases, e.g., for salaries, deans will also approve the expense after the PI approves it to ensure the activity is consistent with school requirements.

C. SPONSORED PROJECTS SERVICES (SPS) APPROVAL

As part of the verification and approval process, SPS checks the associated project budget for any requested direct expenses intended to be charged to the award. This ensures that the requested cost aligns with the approved budget. Additionally, SPS confirms the availability of funds before approval and checks the period for which the expenditure will be charged to the award account to ensure it is within the budget period.

D. ADDITIONAL VERIFICATION OF SALARY COSTS – AFTER THE FACT CONFIRMATION

In addition to the prior approval or salary allocations to sponsored projects, PIs must verify exempt salary costs charged to sponsored projects to ensure that they accurately reflect the actual time spent on the project during the reporting period.  This occurs at least annually through an after-the-fact verification process (“effort reporting”).  This process satisfies Chapman’s obligations under Uniform Guidance Section 303. Internal Controls and Section 403. Compensation-personal services.  

November 2023 – Original publication.

Financial Services

Chapman Fiscal Policy

PeopleSoft Financials login