Direct Costs

Your study cost budget should include the role and estimated amount of “effort” to complete all study deliverables.  In determining “Effort” it is helpful to keep in mind that you are distributing a monthly salary amount regardless of how many hours are worked in that month.  (Note:  assuming the team member is not eligible for overtime pay.) 

For example:

1. A salaried team member worked 100% on a particular study and is paid $3,500 per month

2. Month One:  they worked 40 hours per week for the month 

3. Month Two they worked 50 hours per week for the month

4. The expense to the study for each month would be the same 

This would suggest that a reasonable approach would be to keep it simple by estimating the number of hours the activity will take, and ignore the overtime variable.  In the above example, 100% of the team member’s salary is allocated to a single study regardless of how many hours were worked.     

It is acceptable to either average a study team’s effort over all of the visits, or estimate the effort for each individual visit.  Don’t forget to include the time it takes for the study team member to prepare for and document the visit in addition to the actual time the visit will take. 

To create an on-going environment/process for quality review, it is strongly suggested that a sample of these estimated times, be compared against actual time collected only on a test basis.

 

What is Included in Salary and Wages

Only salaries of University of Colorado Anschutz Medical Campus should be included. Non-CU Anschutz personnel should be included in either the Operating Expense of “Consultant” or Operating Expense of “Sub-award”. 

What about if our PI has both clinical services and project oversight activities on a trial – how should I account for these two different types of activities in my cost budget? 

The clinical effort – is really providing clinical services.  Clinical services are to go through CU Medicine for billing and also for proper tracking of the Base, Supplemental and Incentive components of the faculty compensation plan.  Therefore, this expense will generally be booked to the account code of 535207 – UPI/CU Med Physician Billings as a result of a CU medicine invoice. 

If the PI’s effort is for activities related to the management of the study (either protocol-related activities of subject-related activities), this effort should be booked via the CU payroll system, as part of the “CU Position Funding” functionality in HCM.  This expense will be booked to the salary and benefits account codes on the study’s speedtype.

 

At the CU Anschutz campus, benefits are booked using the actual health and dental elections of the individual faculty/staff.  You may calculate the actual benefit percentage for each individual by dividing the sum of all of their monthly benefits expenses by their monthly base salary.  A good source for this information is the “Payroll Transactions” report in CU-Data.  As an alternative, the actual Benefit Rate is calculated for you on the “Compensation Summary” (the last page of the report) under the “Position Summary” heading.   

The amount of work this requires could easily out-weigh the benefit.  As a result, the Office of Grants and Contracts also publishes the average percentage for each group of personnel (i.e., Faculty, State Classified, University Staff, etc.).  These percentages are averages for each group. The percentages can be found on the Grants and Contract website, under the “A to Z Resources” > “Budgeting – Grant Proposals and Contracts”.

At the CU Anschutz campus, there are payroll charges that are booked at the end of each month in addition to the benefits discussed above.  This fringe expense does not apply to all job codes.  The applicable job codes can be identified by reviewing the “Fringe Benefits Matrix” on the Finance Website. If applicable, the fringe includes: 

1. Worker’s Compensation

2. Unemployment Compensation

3. Termination Pay

4. Retiree Health, Life, and Supplemental Annuity   

These additional payroll expenses are also booked using a different method than benefits.  These expenses are booked outside of the various payroll processing schedules.  Rather, they are booked using a set percentage for each year via a journal entry at the end of the month.  The percentages used for booking this expense can be obtained on the Finance Website and clicking on the “Fringe Benefit Rates” link. 

Both Components (benefits and fringe) should be included in the cost budgeting of the salary and benefits hourly rate used to estimate the cost of effort on the study.

The Patient Care Costs definition for the purposes of the F&A application is more specific than the general usage of the term. 

For the application of CU Anschutz’s F&A, the definition of patient care is based on the following NIH definition:   

Research Patient Care Costs. The costs of routine and ancillary services provided by hospitals to individuals participating in research programs. The costs of these services normally are assigned to specific research projects through the development and application of research patient care rates or amounts (hereafter "rates"). Research patient care costs do not include: (1) the otherwise allowable items of personal expense reimbursement, such as patient travel or subsistence, consulting physician fees, or any other direct payments related to all classes of individuals, including inpatients, outpatients, subjects, volunteers, and donors, (2) costs of ancillary tests performed in facilities outside the hospital on a fee-for-service basis (e.g., in an independent, privately-owned laboratory) or laboratory tests performed at a medical school/university not associated with a hospital routine or ancillary service, (3) recruitment or retention fees or (4) the data management or statistical analysis of clinical research results.”   

Why is this distinction important? 

This specific definition of Patient Care Costs comes into play only if F&A is applied to the “Cost Base Type” of Modified total Direct Costs (MTDC).   

The “Cost Base Type” defines what type of expenses are subject to F&A.  If the Cost Base Type is Total Direct Costs (TDC), F&A is applied to all types of expenses – there are no exclusions and therefore, the specific definition of Patient Care Costs does not matter. 

However, if the Cost Base Type is MTDC, F&A is applied to only some types of expenses.  One of the expense types that is excluded from the application of F&A is Patient Care Costs – but only as defined above.  As a result, projects using the MTDC “Cost Base Type” will​ apply F&A to the following expenses, as they are outside of the above definition of Patient Care Costs:   ​           

1.  Ancillary tests performed outside of the hospital.  This includes tests completed by the University or by privately owned business ​

2. CU Medicine Charges ​

3. Reimbursement of Subject personal expense related participation in the study ​

4. Recruitment/retention fees paid to the subject ​

5. Data management or statistical analysis of data  The largest type of awards that use MTDC, are Federal awards.

The process for paying Study Subjects is defined by the CU System Procurement Services Center and can be reviewed here:   ​

Just a note about the W-9 requirement.  The University is required to generate an IRS Misc. Income form (1099 Form) for any individual that receives payment from the University over an annual threshold amount that is defined by the IRS.  In order for the University to meet this requirement, the W-9 is needed so that the completed 1099 form can be compiled and sent to the individual receiving the payments.