Application to Federal awards. Identification with the federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from an indirect expense, such as facilities and administrative costs. Typical costs charged directly to a federal award are the compensation of employees who work on that award, their related fringe benefit costs, the costs of materials and other items of expense incurred for the federal award. If directly related to a specific award, certain costs that otherwise would be treated as an indirect expense may also be considered a Direct expense.
