Each Circular establishes a set of cost principles that identifies certain costs that are allowable to the extent that they are approved by the granting agency. In these cases, a specific request for approval is not required. In these cases, if the costs requiring approval are included in the grant budget, approval of the budget will constitute approval of the costs. For some types of costs, the determination of allowability or unallowability will depend on the nature of the circumstances under which they were incurred. For such doubtful cases, the guidelines and standards of the applicable 0MB circular should be applied.
Any losses arising from uncollectible accounts and other claims, and related costs, are unallowable.
Contributions to a contingency reserve or any similar provision for unforeseen events are unallowable. Contributions and donations . Costs of amusements, social activities, and incidental costs relating thereto, such as meals, beverages, lodgings, rentals, transportation, and gratuities, are unallowable. Fines and penalties . Costs resulting from violations of, or failure to comply with Federal, State and local laws and regulations are unallowable.