University of California Office of the President  
Senior Vice PresidentóBusiness and Finance

Research Administration Office

Memo Operating Requirement

No. 00-07

October 31, 2000


Subject: Objects Codes for Compliance with OMB Circular A-21

This memo incorporates in the Contract and Grant Information System a letter previously issued to campuses.

The enclosed letter issues final definitions for new object codes established in March, 1992 to identify specific costs as defined by OMB Circular A-21 for use in financial reporting to the Office of the President. Also included is a list of expenditures which must be separately identified. A complete list of object codes can be found in Accounting Manual, Chapter A-115-2, Accounting Codes: General Ledger, Section III.E.1, and is available electronically at

This Memo and enclosure are available electronically at

Refer: Barbara Yoder

Subj Index: 06, 07, 22
Org Index: U-115


David Mears
Director, Research Administration Office

Cc: Assistant Vice President Plotts
Manager Ohy



Senior Vice President- Administration

March 31, 1992


The assignment of new object codes for improved compliance with the cost principles as defined in OMB Circular A-21 was discussed at the Accounting Officers' Conference on February 27, 1992. It was agreed that the final definitions of the new codes would be released to the campus Accounting Officers for implementation. The full use of the new object codes should be in as soon as possible, but no later than July 1, 1992.

Enclosed is the final version of the definitions for each object code, The specific object code numbers need not be used locally by the campuses; however the data sent to the Office of the President must be mapped to these specific codes. If you have any comments, please notify me as soon as possible.

Included in the attachment is also a list of expenditures which must be separately identified by each campus annually. A new step will be incorporated into the Closing Schedule for the submission or these expenditures to the Office of the President.

The attached documents will be discussed further at the Extramural Fund Managers' Conference to be held in San Francisco on April 10, 1992.

If you have any questions, please do not hesitate to call.

David F. Mears Donald L. Alter
Director Director
Research Administration Office Corporate Accounting Office


cc: Senior Vice President Brady
University Controller Pastrone
Extramural Fund Managers
Manager Ohy

This draft reflects the changes agreed to by the campus Accounting Officers at the Accounting Officers' Conference held on February 27, 1992.

New object codes are being established to identify specific costs as defined by OMB Circular A-21, Cost Principles for Educational Institutions, as revised on October 3, 1991. These object codes are intended for use by all University departments.

1. 7700 Fines and Penalties

Definition: Costs of all fines, penalties, interest, disallowances, settlements or legal judgements against
the University resulting from violations of federal, state, local, or foreign laws and regulations.

A-21 Reference: Section J.18.

Other Actions Required: If this object code is used with a sponsored project fund, documentation that the direct charge was incurred as a result of compliance with sponsor requirements or instructions should be obtained.

2. 7710 Donations and Contributions

Definition: Costs of donations, contributions and gifts, regardless of recipient. Examples include: purchase of flowers or gifts outside of an established employee morale program; purchase of raffle tickets or tickets to events, where the primary purpose is to benefit the selling organization; and contributions to business, technical or professional organizations beyond standard membership fees.

A-21 Reference: Section J. 13.b.

3.a. 7230 Advertising: Federally Chargeable

Definition: Media costs for the advertising of (1) personnel recruitment, (2) procurement of goods or services, (3) disposal of scrap or surplus materials, or (4) purposes necessary to meet the requirements of a sponsored agreement.

A-21 Reference: Sections J.1.c., J.37.

3.b. 7730 Advertising including Public Relations and Promotions: Federally Unchargeable

Definition: Media expenses for all advertising other than "Federally Chargeable Advertising" above. Also include costs of all promotional items and memorabilia, e.g. brochures, t-shirts, etc.

A-21 Reference: Sections J.1., J.37.

Discussion: These object codes are primarily for use by academic departments, where advertising and promotion may not be an ongoing activity, but expenses of this type may occur from time to time. Departments with ongoing activities of this nature such as alumni affairs, University advancement, etc. should be identified at the account or account/fund level.

Other Action Required: Establish or identify separate accounts of units which conduct ongoing, "Federally
Unchargeable" advertising and public relations.

4. 7740 Patient Care

Definition: Costs incurred by academic departments and organized research units for charges or
recharges made by any hospital or clinic, including University and affiliated hospitals and clinics.

A-21 Reference: This item is required under the A-88 Rate Agreement with the Department of Health and Human Services.

Discussion: For sponsored project funds, expenses under this object code are not subject to indirect costs. The primary sponsor of these costs is the Public Health Service (PHS), which includes the National Institutes of Health (NIH). Under current PHS and NIH regulations, patient care costs are allowable as direct charges only when included in the approved budget, or when rebudgeting for this purpose has been approved by the sponsoring agency.

Other Action Required: For sponsored project funds, verify that patient care costs have been sufficiently budgeted in the project budget.

5. 7750 Social Activities and Entertainment

Definition: Costs of alcoholic beverages and social or entertainment events including amusement, diversion, and social activities and any costs directly associated with such costs such as tickets to shows or sports events, meals, lodging, rentals transportation, and gratuities.

Included under this object code are expenses for retirement or holiday parties, meals honoring guests of the University, and similar occasions, even though a business purpose may be evident.

This object code does not include food and beverage costs of officia. University business meetings and conferences (see object code 7250, Food and Beverages for Business Meetings/Conferences).

A-21 Reference: Sections J. 15.

6. 7250 Food and Beverages for Business Meetings/Conferences

Definition: This object code is for food and beverage costs of University business meetings or conferences held primarily for the dissemination of technical information.

This object code is not to be used for entertainment and social activity expenses (see object code 7750, Social Activities and Entertainment).

A-21 Reference: Section J.28.c.

7.a 7220 Membership and Subscriptions: Federally Chargeable

Definition: Cost of the institution's membership in business, technical, and professional organizations and cost of subscriptions to periodicals issued by these organizations.

A-21 Reference: Section J.28.a,b.

7.b. 7720 Membership and Suhscriptions: Federally Unchargeable

Definition: Cost of membership in any civic or community organizations, country club, social or dining club or organization and the cost of any subscriptions to periodicals issued by these organizations.

A-21 Reference: Section J.28.d,e.

8. 7770 Stipends for Scholarships and Fellowships

Definition: Cost of stipends paid under scholarships and fellowships. Includes the cost of scholarship and fellowship payments made to the recipient to cover such cost-A as tuition, fees, books and living, expenses. Does not include the cost of travel, workshops, conferences, honorarium and other costs associated with training and conference grants. Also does not include the reimbursement of salary, wages and benefits of employees through "fellowship" programs.

A-21 Reference: Section J.41. Also refer to A-88 Rate Agreement issued by the Division of Cost
Allocation, Department of Health and Human Services (DCA/DHHS).

Discussion: The A-88 Rate Agreement issued by DCA/DHHS defines the direct cost base applicable to
indirect costs as "total direct costs less expenditures for: . . . tuition remission, and participant costs
(i.e. stipends, dependency allowances, scholarships and fellowships.) Object codes were previously
established for tuition and full fee remission (8970), partial fee remission (8590) and graduate student
health insurance (8570). This new object code is intended to capture the stipends that constitute
"participant costs" for the purposes of establishing the MTDC base as specified in the A-88 Rate
Agreement. This is not to be confused with certain agency and program restrictions limiting indirect
costs on " participant support costs" (such as NSF training and conference grants).

9. 7780 Cost of legal proceedings

Definition: Cost of defense and prosecution of criminal and civil proceedings, claims, appeals and patent

A-21 Reference: Section J. 11.

Discussion: This object code should be used to identify the cost legal proceedings incurred through
consultants including external counsel and University counsel. Cost of legal proceedings incurred within the department including the cost of salary and wages of personnel should be identified at the account fund level as suggested in item 2.of "Accounting Actions Other Than Use of New Object Codes".

Accounting Actions Other Than Use of New Object Codes

While the use of the new object codes will identify specific "classification" of costs, there is also a need to identify costs associated with specific "activities". The costs associated with the "activity" would include salaries and wages of the employees conducting the activity. Departments which expend significant level of effort related to the following activities should be assigned a separate account for these expenditures. A single account may be used for all ten types of activities per department. Significant level of effort could be defined as departments with one or more FTE devoted to these activities in total.

1. Commencement and convocation costs: A-21 Reference: Section J.6., J.1.f.(2).

2. Cost of legal proceedings: A-21 Reference: Section J.11. Cost of defense and prosecution of
criminal and civil proceedings, claims, appeals and patent infringement. These costs are expected
to be incurred by the office of legal counsel. If these costs are likely to be incurred by individual
departments (either through recharge or through direct billings), they should be identified by the use of object code 7780.

3. Housing and personal automobile allowance for executives: A-21 Reference: Sections J.19.,
J.20. Cost of housing (e.g., depreciation, maintenance, utilities, furnishings, rent etc.),
automobiles and other goods or services for the personal use of the institutions employees,
regardless of whether the cost is reported as taxable income to the employees.

4. Lobbying costs, includinq printed advocacy material: A-21 Reference: J.17., J.24.

5. Selling and marketing University goods and services including marketing and licensing
University copyrights and technology: A-21 Reference: J.42. Departments with revenues
from sales of goods or services in excess of $50,000 annually should separately account for these

6. Regental travel and subsistence costs regardless of purpose: A-21 Reference: Section J.50.

7. Alumni activities: A-21 Refel,ence: J.3. Costs incurred for, or in support of, alumni activities
and similar services. Accounts of the Alumni Office should iefinitely be identified. In addition,
departments (academic and non-academic) with significant alu=i activities should be ass'lPea
separate accounts to identify these costs.

8. Fund raising and investment management activities: A-21 Reference: J.22.a., J.22.b.,
J.22.c., J.22.d. Includes costs of fund raising and investment counsel and staff incurred to
enhance income from investments. Typical examples of departments required to identify these
costs would be the Development/Advancement offices. In addition, academic departments may
be conducting fund raising activities.

9. Student activities: A-21 Reference: J.45. Includes costs of intramural activities, student
publications, student clubs, and other student activities. These costs should be assigned to
accounts under function 68 (student services) regardless of the department. The universal use
of the 68 function for these costs will eliminate the need to identify and report individual accounts at the end of the year.

10. Ongoing advertising and public relations activities: A-21 Reference: J.1.f. Cost of
advertising and public relations designed solely to promote the institution. While most of the
advertising will be identified through the use of object codes, departments or units with
significant level of activity in this area will need to be identified at the account level. Typical
examples would include the Public Relations/Information offices and also may include academic
departments with this type of activity.

Campuses will be asked to submit a list of these accounts or accout/funds which fall under the above classifications at the end of the each year as part of the fiscal closing schedule.

A practical approach to implement the above may be to do the following:

a. Identify the primary functional offices with the activities described above. Identify the
accounts used by these units for the activities identified below.

b. Assign a new account "A-21 special items" to departments or units most likely to have
these activities including all deans' offices.