Hello! We are LUMOS, the AI Agent Solution for national R&D programs.
Upon selection for a government R&D program, the most frequent question is, "Can this be charged to the project budget?" Everyday items like team dinners, laptops, and software subscriptions cause the most confusion. Today, we will provide a comprehensive guide on eligible budget items and key considerations.
Can project budgets be spent anywhere?
Government R&D project budgets have designated categories of expense items and allowable uses under the Enforcement Decree of the National Research and Development Innovation Act. Eligibility is not based on the general premise of "anything needed for research," but rather on alignment with designated expense categories and direct relevance to the project. If you are confused by the basic distinction between cash and in-kind contributions, it is helpful to first review the differences between cash and in-kind contributions.
Three Key Principles of Project Budget Allocation
Expenses must be directly required for project execution.
Expenses must align with designated expense categories and purposes.
Proper supporting documentation and prior approval procedures (pre-approval, dedicated card, etc.) must be established.
LUMOS Insight
Detailed criteria can vary by program and funding agency (Ministry of Science and ICT, Ministry of Startups and SMEs, local governments, etc.), even for identical expense items. Consequently, cultivating a habit of prioritizing the review of project announcements and agency settlement guidelines, rather than relying on general assumptions of eligibility, is crucial to preventing compliance issues.
Clarifying Common Confusions
1. Dining Expenses - Personal dinners are ineligible; meeting meals are conditionally eligible
Meals for social gatherings or general team dinners cannot be charged to the project budget. However, meal expenses for meetings involving external personnel are eligible if prior internal approval is obtained (based on the 2026 amendments). Standard refreshments like bottled water and coffee are considered meal expenses under meeting costs, but they are exempt from the prior approval requirement.
2. Laptops & PCs - Rentals preferred over purchases
The purchase of general-purpose laptops and PCs is often restricted depending on the specific program. As a rule, these should be budgeted as rental expenses during the project period. To qualify as project-dedicated equipment, the purpose and duration of use must align with the project goals.
3. SW Subscriptions - Project-specific commercial tools are eligible
Subscription fees (excluding outright purchases) for commercial software and development tools required for the project can be included. This encompasses subscription costs for development or design tools utilized during the research period.
4. Cloud Service Fees - Verified through designated channels and deadlines
Cloud computing service fees must be selected and budgeted through the Digital Service Support System (digitalmarket.kr). Flat-rate plans must be contracted at least 2 months prior to the end of the project (or current stage).
5. Cards - Principle of dedicated project cards (Clean Cards)
Project budget expenditures must, in principle, utilize a dedicated research budget card. Concurrently using personal cards or paying cash can lead to compliance issues during final settlement audits.
LUMOS Insight
A significant portion of violations and budget clawbacks occur due to a simple lack of awareness. Dining expenses, the use of personal cards, and missing documentation are recurring issues. The most reliable safeguard is to assess eligibility prior to execution and document everything in real time.
Critical Considerations for Startups
Standards vary by program
R&D programs and start-up support initiatives (such as early-stage startup packages) have distinct eligibility criteria. Some programs, like TIPS, permit a broader scope of equipment purchases. Ultimately, the specific announcement and settlement guidelines serve as the final authority.
Document expenditures at the time of execution
Consolidating documents during the final settlement phase leads to omissions and errors. Organize card receipts, tax invoices, and meeting minutes at the exact time of expenditure.
Streamlining Budget Decisions without Constant Regulation Searches
Cross-referencing announcements and guidelines for every expense item is repetitive and resource-intensive. LUMOS automates these assessments, enabling real-time verification of whether an item is eligible for a specific project before execution, while managing supporting documentation.
Mitigate Project Budget Risks with LUMOS
LUMOS provides real-time guidance during the execution phase, eliminating the need to repeatedly search budget regulations.
Real-time budget monitoring
Automated documentation management
Compliance alerts
Automated report generation
Preparing for Project Budget Execution?
Consult with LUMOS to receive more detailed guidance.
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This content was prepared based on the "Standards for the Use of Research and Development Expenses in National R&D Projects" (Ministry of Science and ICT Notice No. 2026-13) and Annex 2 of the Enforcement Decree of the National Research and Development Innovation Act.
