The program code attached to any entry-level org throughout the UA system serves two different purposes.

1. The last two alpha characters of the program code (IN, GA, AS, etc.) identifies the type of activity occuring within that org. This information is used by Statewide to determine the F&A rates, as well as categorizing the activity for financial statements, IPEDS, and budgeting purposes.
2. The rest of the numerical characters organizes the activity within the appropriation and allocation heirarchy structure. To view the structure of any program code, go to the FTIPRGH screen in Banner.

The Program Code Definitions section of the UA Accounting and Administrative Manual is an excellent resource for examples of activity and the meaning of each character of the program code.

Program code compliance is essential to accurately record direct and indirect expenses for F&A rate calculations and reporting purposes. Proper assignment ensures the activity is appropriately defined as instruction, research, administrative, etc. Please review the

Example of Impact of Indirect Costs included in Direct Base

from Statewide for a clear demonstration on how improper allocation can effect F&A rates.

Direct costs are classified as those that can be "identified specifically with a particular sponsored project, instruction, other sponsored activity, or other institutional activities" (OMB Circular A-21.D.1). Examples include instructional labor, research equipment, or guest speakers for a public event. These activities can be easily allocated to a direct cost project. All restricted and matching costs are considered direct costs and should be treated as such.

Direct cost program codes on Fund 1 - AM, AY, AZ, GY, GZ, IN, IR, IY, IZ, OY, OZ, PS, PY, PZ, RR, RT, RY, RZ, SA, SY, SZ

Please note: although some of these program codes are unallowable activities for F&A (ie GZ) and therefore would not appear on a SW compliance review, they are still direct cost activities so the proper account codes should be used.

Indirect costs are classified as those that cannot be easily allocated to a specific project as described above. Anything that falls within Facilities or Administration would be considered indirect. Definitions of both can be found in the OMB Circular A-21.F.1. Office supplies (including equipment and computers), paper, telephones, and administrative labor are just a few examples of indirect costs as they may be utilized for multiple purposes at any given time.

Indirect cost program codes - AC, AL, AP, AS, GA, GB, GM, GP, GS, ID, IM, OM, PD, PM, RD, RM