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SIBCR expends funds in support of research and educational activities at the VA Puget Sound Health Care System (VAPSHCS). These expenditures include both direct costs, shown as research and education expenses on the financial statements, and indirect costs, shown as program support and administrative.

SIBCR follows federal cost principles promulgated by OMB circular 2 CFR 230 and 2 CFR 200, the requirements of the NIH Grants Policy Statement; the HHS Grants Policy Statement and other sponsor requirements.


2 CFR 230, Attachment A, paragraph B.1 states, “Direct costs are those that can be identified specifically with a particular final cost objective, i.e., particular award, project, service or other direct activity of the organization.”

SIBCR direct costs consist of expenditures made in support of a specific research project or educational activity. Costs that are chargeable to a specific project or activity are included as direct costs. The accounting system records these costs as they are incurred within the series of accounts assigned for that purpose and further distribution is not required.


2 CFR 230, Attachment A, paragraph C.1 states “Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular cost objective.”

SIBCR costs that are not identifiable with a specific project or activity are indirect costs. These costs are incurred for common or joint objectives and therefore cannot be readily and specifically identified with a particular project or activity. The costs are grouped into a common pool and distributed to the research program using the Total Modified Direct Cost allocation process.


Costs related to administrative support of the organization, including SIBCR administrative office personnel and operating expenses are categorized as indirect expenses.


In addition, expenditures in support of research that are not related to a specific project are included as indirect costs. Such costs include safety, compliance and administrative personnel, program related travel and meeting expenses, mental health division operating expenditures and other research administration costs. The costs are approved by the Board of Directors and are funded by the indirect cost recovery and the net assets of the organization.

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