Travel on Sponsored Projects

Revision Date: January 20, 2023

Responsible Office: URA

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The following guidance and checklist may be used to assess and determine the allowability of sponsored travel, requirements around constructed travel, and adequacy of supporting documentation.

Cost Principles

According to The University of Chicago (University) policy and federal regulations, an expense qualifies as a direct cost for a sponsored project when it meets all of the following cost principles:

1. The cost must be allowable as defined by federal regulations and/or by the terms of your particular sponsored award
2. The cost must be allocable, that is, goods or services involved are chargeable or assignable in accordance with the relative benefits received by the project(s).
3. The cost must be reasonable, that is, the cost reflects what a prudent person might pay.
4. Costs must be handled consistently across the university by following University policy guidance, and procedures.

Allowable

An expense is allowable if:

• It is not prohibited by University policy, sponsor policy or federal regulations.
• There is a valid business purpose required to fulfill the mission of the University (i.e. instruction, research).
• It is incurred on a sponsored project according to the terms and conditions of the award and/or federal regulations.
• The cost is properly coded and supported according to University policy and federal regulations.

Allocable

A cost is allocable to a particular federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.

Reasonable

A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.

Consistent

Costs must be consistent with policies and procedures that apply uniformly to both federally‐
financed and other activities of the University.

Sponsored Travel Checklist

Prior to Travel:

The following assessment should be made prior to procuring and completing travel. All answers should be "yes" except as qualified or where noted.

• Travel Allowability:
  • Is travel allowable per the sponsored award?
  • Are travel costs included in the award budget budget?
  • Will the travel take place within the authorized award period (unless pre-award costs are approved)?
  • Is there an appropriate justification for the travel?
  • Does the travel require any additional approvals (i.e. sponsor, University leadership)?
  • Have you reviewed and do you understand the applicable University travel policy and procedures?
• Travel Allocability:
  • Will this trip also include personal travel, travel for more than one sponsored program or non-sponsored business needs? If yes, please view the Constructed Travel section within Documentation Standards.
• Travel Reasonableness:
  • Could the cost be comfortably defended under public scrutiny?
  • Would you be confident if the cost was selected for audit?
  • Would you be comfortable explaining to a sponsor that their funding was used this way?
• International travel:
  • Are US air carriers used? (Exceptions are allowable only in limited circumstances. Cost savings is not an exception. See GSA guidance on Use of U.S. Flag Air Carriers.)
  • Have you reviewed Export Control Guidance and Procedure and our International Travel policy?

University of Chicago Travel Policies

The University of Chicago has several policies and procedures in place regarding travel expenditures and reasonable business expenses. The following is a compiled list that should be reviewed and understood prior to procuring and completing travel:

• Policy 1202: Business Expense Management and Reasonable Business Expenses guidance found on the right-hand side of the policy page.
• Policy 1214: Non-Salary Cash Advances
• Supporting Documentation Standards
• Foreign Travel Guidance
• International Travel Checklist

Documentation Standards

The University outlines minimum supporting documentation standards within the Supporting Documentation Standards policy. However, some sponsored awards may have additional requirements beyond University policy. Review your individual award agreement, terms and conditions for any additional documentation requirements. Some additional documentation standards to be mindful of and adhere to regarding federal awards:

Trip Justification

Some federal agencies, including the National Science Foundation (NSF), encourage the inclusion trip justifications with supporting documentation. The trip justifications should clearly explain how the travel relates to and benefits the sponsored award objectives.

Foreign Receipts & Currency

Many sponsors and organizations will require translations and exchange rate information to support expenditures in a foreign country or currency. Confirm these expectations with your sponsor prior to travel. The University travel reimbursement system, GEMS, has a built-in currency conversion tool, but other third-party conversions are allowable, such as Oanda, if needed.

Constructed Travel

Constructed travel or constructed airfares refers to the cost of an authorized travel mode and route compared with an alternative mode and/or route. Constructed travel often occurs as a result of combining travel for one sponsored award with personal or other business travel.

Example: Professor X has approval to travel to India roundtrip to work on a Bill & Melinda Gates Foundation research project. However, prior to returning home, Professor X travels on to China to give a lecture at the University’s Center in Beijing. When considering the cost of the trip that should be allocated to the Gates Foundation, Professor X should compare what his trip would have cost had he returned home rather than adding the additional China stop. If the addition of the China stop results in the trip costing more, Professor X should only seek reimbursement from the Gates Foundation for up to what it would have cost him had he returned back home.

Documentation and calculations supporting constructed travel charges should be included with any travel advance or reimbursement for payment. Auditors and sponsors will often want to review these rate comparisons to ensure that they are not being overcharged for unrelated work or personal travel.

Definitions

These definitions apply to these terms as they are used in this policy.

Cost Principles

The federal cost principles are set forth in 2 CFR Part 200, Subpart E and establish standards for the allowability of costs. The cost principles address four tests to determine allowability: Reasonableness (including Necessity), Allocability, Consistency, and Allowability-Conformance with limitations and exclusions as contained in the terms and conditions of a award.

Constructed Travel

Constructed travel refers to the cost of an authorized travel mode and route compared with an alternative mode and/or route.