UNIVERSITY OF WASHINGTON
OFFICE OF RESEARCH
Human embryo and human embryonic stem cell line (hESC) research
Funding and Facilities Guidelines
According to current U.S. law, research that involves the fertilization of human oocytes or the
destruction of human embryos for research purposes, including the derivation of human
embryonic stem cell lines, may not be funded with Federal government funds, other than
research using hESC lines in the NIH Human Embryonic Stem Cell Registry.
.At the University of Washington, investigators conducting this type of research may do so with
non-Federal funds, in facilities and with equipment paid for with non-Federal funds and after
seeking and receiving approval to proceed. If you are considering conducting human embryo
and/or hESC research, other than research using HESC lines in the NIH registry,, please
complete the ESCRO application and Financial Supplement, an attachment to this page.
A. Cost-Allocation Guidelines:
1. Introduction
2. Financial Definitions
3. General Cost Allocation Principles
4. Application of Federal Cost Principles to Specific Resources
5. Further Questions and Information
1. Introduction
The UW is providing these guidelines, which are consistent with federal hESC
research restrictions, in order to set forth the steps that researchers and administrators
must take to ensure that hESC research is compliant with federal law. These
guidelines describe steps to take in managing resources used for hESC research,
including (1) facilities, (2) equipment, (3) personnel, (4) materials, supplies, and other
commodities, (5) non-capitalized equipment, (6) purchased services (7) derivatives
from hESC research, and (8) data and intellectual property associated with hESC
research.
These guidelines are intended to address only those issues presented by current
federal hESC research policy. They supplement, but do not replace, other UW
financial and accounting policies, rules and procedures.
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2. Financial Definitions
The following shall apply to these cost-allocation guidelines:
Uniform Guidance (2 CFR 200)
Principles for Determining Costs Applicable to Grants, Contracts and Other
Agreements with Educational Institutions, promulgated by the federal Office of
Management and Budget. A document promulgated by the Office of Management
and Budget entitled “Office of Management and Budget Guidance for Grants and
Agreements.”
Facilities and Administrative (F&A) costs
Indirect costs incurred for common or joint objectives that cannot be identified
readily and specifically with particular sponsored projects and instructional activity or
any other institutional activity (Uniform Guidance (2 CFR 200).
Materials, supplies, and other commodities
Consumable goods and reusable items, including laboratory supplies and equipment,
with an acquisition cost of less than $5000 and an expected useful life of one year or
less.
Non-capitalized equipment
Reusable items, including laboratory supplies and equipment, with an acquisition cost
of less than $5000 an expected useful life of more than one year.
Purchased services
Professional contract services, such as the services of consultants, laborers, or
maintenance and repair technicians.
3. General Cost Allocation Principles
The cost principles set out in Uniform Guidance (2 CFR 200) do not prohibit
institutions that receive federal support from engaging in “unallowable” activities.
Instead, they restrict the use of federal funds to pay for these activities. For example,
costs of bad debts, donations and contributions, and entertainment, among others, are
unallowable. Even though certain costs are unallowable, the UW and its researchers
may still be reimbursed for other allowable expenses incurred in connection with
federally supported projects.
Uniform Guidance indicates that federally-supported institutions can avoid the
impermissible shifting of costs of unallowable activities to the federal government if
it does not either (1) impose the direct costs of such activities on the federal
government, or (2) request reimbursement from the federal government for F&A
costs associated with unallowable activities. Examples of indirect costs are building
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depreciation and use allowances, maintenance expenses, library expenses, and student
and department administration expenses.
a. Direct Costs
To determine if a particular direct cost can be charged to the federal
government, the cost must be allowable, reasonable, and allocable to
work conducted under federally sponsored agreements, and it must not
include any unallowable costs.
Although the direct costs of unallowable activities may not be charged to
the federal government, the government will pay its share of resources
that are used for both federal and non-federal purposes. Uniform
Guidance (2 CFR 200) states that “a cost is allocable to a particular cost
objective (i.e., a specific function, sponsored agreement, department, or
the like) if the goods and services involved are chargeable or assignable
to such cost objective in accordance with relative benefits received or
other equitable relationship.” For example, if personnel time or general-
purpose laboratory materials are being used for both federally sponsored
research and ineligible hESC research, the federal government will pay
the cost of that proportion of the resource being used for federally
sponsored research.
The process of determining the direct costs of resources used for human
embryonic and hESC research does not differ in practice from the
allocation process generally used to separate activities that may not be
charged to the federal government because they are not associated with a
federal agreement. To illustrate, assume that a faculty member divides
time and effort as follows: 60% to a federally sponsored grant, 15% to
teaching and administrative duties, and 25% to ineligible hESC research.
In this example, only 60% of the faculty member’s time and effort could
be allocated to the federal grant. For cost allocation purposes, it is
irrelevant whether the other 40% devoted to performing unallowable
hESC research (25%) or other activities that do not benefit the federally
sponsored research (15%). In this illustration, none of the 40% time and
effort may be charged to the federal government.
b. Indirect Costs
In general, UW F&A costs are calculated and allocated to the federal
government by multiplying the direct costs of a federal project by the
government-approved UW F&A rate. This approach assumes that there
is an established relationship between the direct costs of research
projects and the F&A costs as reflected in the F&A rate and that it is
therefore possible to identify the F&A costs associated with a particular
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project by applying the predetermined rate to the total amount of direct
costs associated with the project. The NIH guidance on hESC research
indicates that the indirect costs of hESC research may be included in the
regular F&A cost allocation base, and associated indirect costs may be
allocated pursuant to ordinary cost allocation principles. The NIH
Frequently Asked Questions on these subject states that compliance with
these methodologies “will prevent the shifting of unallowable stem cell
research costs to federally sponsored programs.”
4. Application of Federal Cost Principles to Specific Resources
In addition to obtaining required approvals to conduct human embryo and hESC
research, a PI must obtain confirmation from the PI’s school or college that the
proposal conforms to the guidelines set out below. These cost-allocation guidelines
apply to facilities, equipment, personnel, materials, supplies, non-capitalized
equipment, and purchased services, devoted in whole or part to human embryonic
and hESC research, regardless of funding source. The schools and colleges are
responsible for implementing the guidelines for these specific resources including
recharge and cost centers involved in human embryo and hESC research activities.
a. Facilities
UW facilities may be used to conduct human embryonic and hESC
research only if they are approved for that use in advance. NIH
guidance specifically provides that an investigator receiving NIH
support may create new hESC derived cell lines and engage in other
hESC research providing (i) all direct costs of such activities are
allocated to a non-federal funding source, and (ii) the UW has in place a
reasonable method of separating costs so that the appropriate F&A costs
allocable to the hESC research are allocated to non-federal accounts so
as to prevent federal funds from improperly supporting hESC research.
Prior to commencing hESC research, the PI must (i) have written
confirmation from the school or college that the facility has been
approved for use in the conduct of hESC research, and (ii) adhere to any
limitations contained in the written approval regarding the usage of
facilities and related recordkeeping. The following guidelines apply to
the approval of facilities in which hESC research is conducted.
(i) Responsibility for Seeking Approval. The PI retains primary
responsibility for seeking approval for facilities to be used in the
conduct of hESC research.
(ii) Tracking Usage of Facilities. UW’s existing policies and
procedures for tracking and confirming the usage of facilities for
federally funded research, and the direct and indirect costs
associated with that usage, will apply so that only allowable costs
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are charged to federal grants, and so that the costs of using
facilities for other activities, including hESC research, are not
supported by federal funds.
(iii) Limitations on the Usage of Facilities. UW facilities may
be used for hESC research, subject to approval on appropriate
conditions. Such conditions may include, for example, limitation
on time, allocation of space, or percentage of use and will in any
event take into account other commitments for the facilities, if any,
to federally sponsored projects and to other UW activities,
including non-federally sponsored research.
(iv)Use of Multiple Facilities. As part of the approval process, the PI
must disclose all locations, both on-campus and off-campus, where
any hESC research,will be conducted.
(v) Approval of Changes in Usage of Facilities. Any change in
space usage where hESC research is conducted, whether addition
or deletion of existing space, or changes in time or percentage of
hESC research or usage, is also subject to these guidelines.
Changes must be reviewed and approved by the school or college
in accordance with usual and customary procedures.
b. Equipment
UW equipment may be used to conduct hESC research with advance
approval of the school or college. According to current NIH guidance,
the acquisition of equipment used in the conduct of hESC research may
not be federally supported. Federal regulations (Uniform Guidance (2
CFR 200)) contain additional rules that restrict the use of federally-
owned equipment or other equipment acquired with federal funds. Prior
to commencing hESC research, the PI must (i) have written confirmation
from the school or college that the equipment has been approved for use
in the conduct of hESC research and (ii) agree to any limitations in the
written approval regarding the use of equipment and related
recordkeeping. Limitations may involve, for example, restrictions on
time or percentage limits on equipment capacity. The following
guidelines apply to the approval of equipment to be used in hESC
research:
(i) Responsibility for Seeking Approval. The PI retains primary
responsibility for seeking approval for equipment, whether existing
or proposed for acquisition, to be used in the conduct of hESC
research.
(ii) Tracking Usage of Equipment. UW’s existing policies and
procedures for tracking and confirming the acquisition and usage
of equipment for federally funded research, and the direct and
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indirect costs associated with acquiring and using equipment, will
apply so that only allowable costs are charged to federal grants,
and so that the costs of acquiring or using equipment for other
activities, including hESC research, are not supported by federal
funds.
(iii) Use of Equipment. The school or collegewill issue
approval as follows:
a) Equipment owned by UW. Equipment owned by UW
may be used to conduct hESC research if the following
conditions are satisfied:
Acquisition of the equipment was not supported by
federal funds, and
Use of the equipment is not subject to any other
restrictions, including restrictions imposed by non-
federal sponsors.
b) Equipment owned by the Federal Government.
Equipment owned by the federal government may be used in
conducting hESC research only in the following
circumstances:
Use of the equipment is expressly permitted pursuant to
the terms of the federal award under which the
equipment was obtained, the terms of an equipment
rental agreement, or the approval of the appropriate
federal agency; or
UW purchases the equipment from the federal
government and has documentation of such transaction,
including title transfer.
c) Equipment owned by UW but Purchased with Federal
Support. Equipment owned by UW but acquired, in whole
or in part, with federal funds may be used in conducting
hESC research only in the following circumstances:
All competitive segments of the federal grant or contract
supporting the equipment purchase have been completed
and UW retains title to the equipment without
restriction, observing any preferences for federal usage;
or
Use of the equipment for hESC research is permitted
pursuant to the terms of the federal grant or the approval
of the appropriate federal agency; or
UW purchases the equipment in full, without federal
restriction, and has documentation of such a transaction.
d) Approval in changes in Usage of Equipment. Any
anticipated changes in usage of equipment are also subject to
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these guidelines. Changes must be reviewed and approved
by the schools, and sponsor approval obtained, if required by
the sponsor per the terms of the award.
c. Personnel
All UW personnel participating in hESC research must have prior
approval from the UW regardless of whether the research is eligible for
federal funding and whether any of the personnel receive federal funding
for any purpose. Prior to commencing hESC research, the PI must (i)
ascertain that any required approvals have been obtained from the
ESCRO Committee, (ii) have an approved eGC-1 on file, if funded by
an external entity, and (iii) obtain the agreement of all UW personnel
participating in the hESC research to follow all UW rules and
procedures regarding hESC research, including GIM 36 and these hESC
cost-allocation guidelines. In addition to the foregoing, the following
rules apply to the approval of personnel to participate in hESC research,
regardless of funding source:
(i) Responsibility for Seeking Approval. The PI shall have primary
responsibility for ensuring that approvals are sought and obtained
for all personnel participating in hESC research.
(ii) Tracking Effort. UW’s existing policies and procedures for
tracking and confirming work effort, both direct charged and cost
shared, on federally funded research will apply so that
appropriate effort is devoted to commitments under federal grants,
and so that other activities including hESC research, are not
supported by federal funds (See GIM 35 – Effort Reporting Policy
for Sponsored Agreements
(iii) Support and Cost Sharing. Non-federal funds may be
used to support all hESC research. Efforts expended on hESC
research cannot be used to meet cost share commitments to
federal projects.
(iv)Individuals Holding Multiple Appointments. Many UW
personnel have appointments or relationships elsewhere,
including with affiliated hospitals and other institutions. The
process for approving UW personnel to engage in hESC research
will consider in the usual and customary fashion other
appointments, relationships, and commitments of such personnel.
(v) Work Benefiting Multiple Research Aims. From time to time
certain research activities may require further analysis to
determine whether they may be supported in whole, part, or not at
all by federal funds. Research activities on approved hESC lines
may be supported by federal funds to the extent permitted by the
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particular grant. On occasion, certain types of activities may be
directed to research aims with respect to approved hESC lines and
hESC lines not listed on the NIH hESC registry, for example, the
development of a reagent of assay that can be used on both types
of hESC lines. In such instances, time and effort performing such
activities should be allocated in proportion to the benefit each
receives.
d. Materials, Supplies, Non-Capitalized Equipment, and Purchased
Services
Materials, supplies, non-capitalized equipment, and purchased services
owned or acquired by UW may be used in conducting hESC research.
Prior to commencing hESC research, the PI must (i) determine, for cost-
allocation purposes, which materials, supplies, non-capitalized
equipment, and purchased services were purchase specifically to carry
outhESC research, (ii) agree to recordkeeping requirements for tracking
the usage of general-purpose materials, supplies, non-capitalized
equipment, and purchased services, to ensure that the federal
government is not charged for hESC research. For acquired materials,
supplies, non-capitalized equipment, and purchased services this should
be done through appropriate financial accounting methods. The
following guidelines apply to the usage of materials, supplies, and
purchased services:
(i) Consumable Materials and Purchased Services.
(ii) Specific Purchases. If purchased services, such as the services of
consultants, laborers, or maintenance/repair technicians, or
purchase materials are used to carry out hESC research, neither
the direct costs of those items nor the indirect costs associated
with their acquisition may be charged to the federal government.
(iii) Use of Materials from General Supply. Materials withdrawn
from general supply should be charged at their actual costs
“under any recognized method of pricing inventory withdrawals,
consistently applied.” (Uniform Guidance (2 CFR 200).
Transportation charges may be included. The PI must track
usage and apply a written plan for allocating costs among
different projects. In such cases, the indirect cost must be
transferred as well. For example, if the PI of aproject desires to
consume one-half of the cost of existing materials initially
purchased with federal funds for $100, then the $50 of the
Materials plus the associated indirect costs must be transferred to
non-federal sources prior to using or consuming the materials.
(iv) Non-Capitalized Equipment. The cost of non-capitalized
equipment must be allocated among the projects for which they
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are used, under a reasonable allocation plan consistent with UW
policies.
e. Data, Information and Intellectual Property Obtained from hESC
Research
Researchers may use data, information and intellectual property obtained
from any hESC research in subsequent hESC research, regardless of
whether the subsequent projects are federally or non-federally funded.
However, the federal government may not be charged for generating
data for subsequent use in hESC research. These cost-allocation
guidelines govern the determination as to whether resources engaged in
the generation, analysis, or manipulation of data from hESC research
may be charged to the federal government. Any use of data is subject to
the usual consideration of third-party intellectual property rights, as well
as any specific grant or contract constraints on data usage imposed by
the suppliers or sponsors of the data, including other research institutions
and federal funding agencies.
5. Further Questions and Information
These cost-allocation guidelines are subject to revision in light of any changes in
law, rules or regulations. Any questions about these guidelines and their application
to specific research projects should be referred through the school or college. I In
order that UW personnel do not receiving conflicting or incomplete information,
formal inquiries on behalf of UW to federal agencies about the application of federal
cost principles to hESC research shall be made through the Office of Sponsored
Progams (OSP).
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