Examples
Worked examples
- Is an instance
An NIH R01 grant is administered on a cost-reimbursement basis, with annual financial reports detailing actual expenditure.
- Is an instance
An EU Horizon Europe RIA reimburses 100 percent of eligible direct costs plus 25 percent flat indirect costs.
Counter-examples
Looks similar, but isn't
- Not an instance
A lump-sum Horizon Europe grant is not cost-reimbursement.
- Not an instance
A milestone-payment contract paying fixed amounts on deliverable completion is not cost-reimbursement.
Editorial commentary
Cost-reimbursement is the dominant model for US federal grants and many UK and EU schemes. It places the financial-stewardship and documentation burden on the recipient, who must track and justify every charge. Allowability follows the applicable cost principles (2 CFR 200 Subpart E for US federal; Horizon Europe AGA for EU). The opposite model is fixed-price (lump-sum) funding, where the recipient is paid a pre-agreed amount on milestone achievement regardless of actual cost.
Indirect cost recovery under cost-reimbursement: the de minimis rate
A recipient without a federally negotiated indirect cost rate may instead elect the de minimis rate under 2 CFR 200.414(f). OMB’s April 2024 Uniform Guidance revision raised this general rate from 10 percent to 15 percent of Modified Total Direct Costs, effective for awards issued on or after 1 October 2024 — secondary-sourced against converging eCFR-adjacent summaries; treat as REPORTED tier and re-verify directly against ecfr.gov if this is load-bearing more than about a year after this note. NIH is a documented exception: Notice NOT-OD-26-072 (20 April 2026) reverted NIH awards specifically back to the longstanding 10 percent de minimis rate, citing a FY2026 appropriations rider that requires 45 CFR Part 75’s indirect-cost treatment to keep applying to NIH awards. This is attributed to convergent secondary sources (COGR, Harvard OSP, Princeton ORPA) because grants.nih.gov itself blocks automated fetches; it is not independently confirmed against NIH’s own primary notice text in this entry.
Tracking allowable costs
Because every charge must be justified, cost-reimbursement recipients also track cost-principle thresholds that don’t apply under fixed-price funding — for example, the equipment capitalization threshold, raised from $5,000 to $10,000 in the same April 2024 revision, which determines whether a purchase is charged as a direct equipment cost or expensed as a supply.
References
- US Office of Management and Budget Uniform Guidance 2 CFR 200 Subpart E; Horizon Europe Annotated Grant Agreement.
Also known as
Cost-based funding · Reimbursement-based grant
Machine-readable encodings
Use in your systems
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