Research & Cost Accounting

Research-related relocation costs

Introduction

This document is intended to serve as formal guidance for Rice University regarding the use of funds from sponsored programs for relocation costs in like circumstances. The university is committed to ensuring costs incurred in support of sponsored programs are allowable, reasonable, and allocable to a particular sponsored award, as defined by U.S. Office of Management and Budget’s Uniform Guidance (2 CFR §200.403-405); are in compliance with sponsor requirements; and are administered consistently across the campus for all sponsored programs. Procedural statements support the Rice University Cost Principles Policy by providing definitions and processes for meeting those standards.

Definitions

Relocation costs are defined in the U.S. Office of Management and Budget’s Uniform Guidance, 2 CFR §200.464 as:

Relocation costs are costs incident to the permanent change of duty assignment (for an indefinite period or for a stated period of not less than 12 months) of an existing employee, or upon recruitment of a new employee. Eligible employees are current employees with a 100% full-time equivalent appointment or new hires who will be in a 100% full-time equivalent appointment.

Application

Federal awards

Under the guidelines imposed by the Uniform Guidance, relocation expenses may be considered allowable direct charges under certain circumstances, subject to limitations. Rice University considers relocation costs for new hires or existing employees to be allowable on sponsored programs if the position is essential and allocable to the performance of the award. Eligibility is limited to faculty, associates, and post docs.

A position is considered essential under the following conditions:

• When there are no available faculty or staff currently employed by the Rice University unit who could perform the same tasks.
• When there is a need for a specialized individual with unique skills and expertise in order to complete the scope of work of the program.
• Graduate Assistants (GAs) are generally not considered essential personnel, so direct charging of relocation costs to a sponsored program for a GA is allowable only in exceptional cases.

Relocation costs are allowable on sponsored programs, provided that all the following conditions apply, and are subject to limitations outlined below:

• The move is for the benefit of the Rice University.
• Reimbursement to the employee is in accordance with an established written procedural statement consistently followed by the employer. (See Rice University Moving Expense Policy).
• The reimbursement does not exceed the employee's actual expenses. 
• International travel related to relocation on federally funded programs must adhere to the Fly America Act (see the Travel Procedure for more information).

Limitations on allowability

1.  For new hires, the relocation costs to be covered should be listed in the offer letter. Allowable relocation costs for current employees or new hires are limited to the items listed below:
   1. Moving the employee’s household goods and personal effects, including in-transit or foreign-move storage expenses
   2. Travel, including lodging but not meals, from the former residence to the new residence. This includes one night of lodging upon arrival at the new home destination. Subsequent nights of lodging are the responsibility of the employee.
2. If the newly hired employee resigns within 12 months after hire for reasons within his or her control, all associated relocation costs must be removed from the Federal award and charged to a departmental account. If the employee is terminated by the unit within 12 months, relocation costs can still be charged to the sponsored program. 
3. If an existing employee, or a new hire, is being moved to an overseas location, and both of the following conditions apply, the cost will be considered a travel cost in accordance with §200.474 Travel costs, and departments should follow the university's travel policy.

Unallowable costs

• Fees and other costs associated with acquiring a new home.
• A loss on the sale of a former home.
• Continuing mortgage principal and interest payments on a home being sold.
• Income taxes paid by an employee related to reimbursed relocation costs.
• Vehicle tags and driver’s license fees
• Security deposits and utility hookup fees

Non-Federal awards

Section 2 CFR 200.403(c) of the Uniform Guidance requires that we apply our policies and procedures uniformly to both federally-financed and other activities of the university. Therefore, Rice University’s Cost Principles Policy, and related procedural statements, are also applicable to non-Federal awards. The basic criteria for relocation costs are similar for non-Federal sponsored programs, but it is also important to be familiar with the particular requirements or restrictions of each non-Federal sponsor. When allowed by the non-Federal sponsor, a written justification for the inclusion of relocation costs should be provided in order to explain why these are necessary to fulfill the objective of the program, and to ensure that the cost directly benefits the program being charged, even when the non-Federal sponsor may follow more flexible spending guidelines.

Process

At proposal

The relocation cost should be identified in the proposal budget justification and justified as to why it is necessary and allocable to the performance of the award. Inclusion in the budget justification is intended to enable the sponsor to review and concur with the need for the cost. Written justification and/or approval is meant to prevent questions regarding the allowability of costs in the event of an audit.

After an award is funded

Not every cost can be anticipated at the time of proposal preparation. In the event that an unbudgeted relocation cost is required after an award is funded, the department can work directly with SPARC to ensure that this cost is properly documented (including any eligible charges paid by a new employee that would be reimbursed by Rice University with sponsored program funds). The documentation must be retained by the department and available upon request. The purpose and benefit of charging the relocation costs to the specific program should be fully described in the justification, and retained for future reference, should the expenditure be questioned at a later date.