Bonding costs (6)-Allowable with restrictions (7) Allowable with restrictions (6)-Allowable with restrictions Commencement and convocation costs Not specifically addressed (8)-Unallowable with exceptions Not specifically addressed Communication costs (7)-Allowable (9)-Allowable (7)-Allowable Compensation for personal services (8)-Unique criteria for support (10)-Unique criteria for support (8)-Unique criteria for support Compensation for personal services - automobile Not specifically addressed (10.g)- Unallowable for that portion of costs attributed to personal use (8.g)- Unallowable for that portion of costs attributed to personal use Compensation for personal services - sabbatical leave costs Not specifically addressed (10.f(4))- Allowable with restrictions Not specifically addressed Compensation for personal services - severance pay (8)-Allowable with restrictions (10.h)-Allowable with restrictions (8.k)-Allowable with restrictions Contingency provisions (9)-Unallowable with exceptions (11)-Unallowable with exceptions (9)-Unallowable with exceptions Deans of faculty and graduate schools Not addressed (12)-Allowable Not addressed Defense and prosecution of criminal and civil proceedings and claims (10)-Allowable with restrictions (13)-Allowable with restrictions (Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringement) (10)-Allowable with restrictions (Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringement) Depreciation and use allowances (11)-Allowable with qualifications (14)-Allowable with qualifications (11)-Allowable with qualifications Donations and contributions (12)-Unallowable (made by recipient); not reimbursable but value (15)-Unallowable (made by recipient); not reimbursable but value (12)-Unallowable (made by recipient); not reimbursable but value
may be used as cost sharing or matching (made to recipient) may be used as cost sharing or matching (made to recipient) may be used as cost sharing or matching (made to recipient) Employee morale, health, and welfare costs (13)-Allowable with restrictions (16)-Allowable with restrictions (13)-Allowable with restrictions Entertainment costs (14)-Unallowable (17)-Unallowable (14)-Unallowable Equipment and other capital expenditures (15)-Allowability based on specific requirements (18)-Allowability based on specific requirements (15)-Allowability based on specific requirements Fines and penalties (16)-Unallowable with exception (19)-Unallowable with exception (16)-Unallowable with exception Fundraising and investment management costs (17)-Unallowable with exceptions (20)-Unallowable with exceptions (Fundraising) (17)-Unallowable with exceptions Gains and losses on depreciable assets (18)-Allowable with restrictions (Gains and losses on disposition of depreciable property and other capital assets and substantial relocation of Federal programs) (21)-Allowable with restrictions (18)-Allowable with restrictions General government expenses (19)-Unallowable with exceptions Not specifically addressed Not specifically addressed Goods or services for personal use (20) Unallowable (22)-Unallowable (19)-Unallowable Housing and personal living expenses Not specifically addressed (23)-Unallowable (20)-Unallowable as overhead costs Idle facilities and idle capacity (21)-Idle facilities - unallowable with exceptions; idle capacity - allowable with restrictions (24)-Idle facilities - unallowable with exceptions; idle capacity - allowable with restrictions (21)-Idle facilities - unallowable with exceptions; idle - capacity allowable with restrictions Insurance and (22)-Allowable with (25)-Allowable with (22)-Allowable with
indemnification restrictions restrictions restrictions Interest (23)-Allowable with restrictions (26)-Allowable with restrictions (23)-Allowable with restrictions Interest - substantial relocation Not specifically addressed (26.b(6))-Possible adjustment in relocated within 20 years (23.a(6)(d))-Possible adjustment in relocated within 20 years Labor relations costs Not specifically addressed (27)-Allowable (24)-Allowable Lobbying (24)-Unallowable (28)-Unallowable with exceptions (25)-Unallowable with exceptions Lobbying - executive lobbying costs (24.b)-Unallowable (28.h)-Unallowable (25.d)-Unallowable Losses on other sponsored agreements or contracts Not specifically addressed (29)-Unallowable (26)-Unallowable (Losses on other awards or contracts) Maintenance and repair costs (25)-Allowable with restrictions (Maintenance, operations, and repairs) (30)-Allowable with restrictions (27)-Allowable with restrictions Materials and supplies costs (26)-Allowable with restrictions (31)-Allowable with restrictions (28)-Allowable with restrictions Meetings and conferences (27)- Allowable with restrictions (32)- Allowable with restrictions (29)-Allowable with restrictions Memberships, subscriptions, and professional activity costs (28)-Allowable as a direct cost for civic, community and social organizations with Federal approval; unallowable for lobbying organizations. (33)-Unallowable for civic, community, or social organizations (30)-Allowable for civic and community organizations with Federal approval; unallowable for social organizations. Organization costs Not specifically addressed Not specifically addressed (31)-Unallowable except Federal prior approval Page charges in professional journals (34.b)-Allowable with restrictions (addressed under “Publication and printing costs”) (39.b)-Allowable with restrictions (addressed under “Publication and printing costs”) (32)-Allowable with restrictions
Participant support costs Not specifically addressed Not specifically addressed (33)-Allowable with prior approval of the Federal awarding agency Patent costs (29)-Allowable with restrictions (34)-Allowable with restrictions (34)-Allowable with restrictions Plant and homeland security costs (30)-Allowable with restrictions (35)-Allowable with restrictions (35)-Allowable with restrictions Pre-agreement costs (31)-Allowable with restrictions (Pre-award costs) (36)-Unallowable unless approved by the Federal sponsoring agency (36)-Allowable with restrictions Professional service costs (32)-Allowable with restrictions (37)-Allowable with restrictions (37)-Allowable with restrictions Proposal costs (33)-Allowable with restrictions (38)-Allowable with restrictions Not specifically addressed Publication and printing costs (34)-Allowable with restrictions (39)-Allowable with restrictions (38)-Allowable with restrictions Rearrangement and alteration costs (35)-Allowable (ordinary and normal); allowable with Federal prior approval (special) (40)-Allowable (ordinary and normal); allowable with Federal prior approval (special) (39)-Allowable (ordinary and normal); allowable with Federal prior approval (special) Reconversion costs (36)-Allowable with restrictions (41)-Allowable with restrictions (40)-Allowable with restrictions Recruiting costs (1.c)-Allowable with restrictions (addresses costs of advertising only) (42)-Allowable with restrictions (1)-Allowable with restrictions Relocation costs Not specifically addressed (42.d)-Allowable with restrictions (42)-Allowable with restrictions Rental cost of buildings and equipment (37)-Allowable with restrictions (43)-Allowable with restrictions (43)-Allowable with restrictions Royalties and other costs for use of patents (38)-Allowable with restrictions (44)-Allowable with restrictions (44)-Allowable with restrictions Scholarships and student aid costs Not specifically addressed (45)-Allowable with restrictions Not specifically addressed Selling and (39)-Unallowable with (46)-Unallowable with (45)-Unallowable with
marketing costs exceptions exceptions exceptions Specialized service facilities Not specifically addressed (47)-Allowable with restrictions (46)-Allowable with restrictions Student activity costs Not specifically addressed (48)-Unallowable unless specifically provided for in the sponsored agreement Not specifically addressed Taxes (40)-Allowable with restrictions (49)-Allowable with restrictions (47)-Allowable with restrictions Termination costs applicable to sponsored agreements (41)-Allowable with restrictions (50)-Allowable with restrictions (48)-Allowable with restrictions Training costs (42)-Allowable for employee development (51)-Allowable for employee development (49)-Allowable with limitations Transportation costs Not specifically addressed (52)-Allowable with restrictions (50)-Allowable Travel costs (43)-Allowable with restrictions (53)-Allowable with restrictions (51)-Allowable with restrictions Trustees Not specifically addressed (54)-Allowable with restrictions (52)-Allowable with restrictions
will be responsible for negotiating and/or monitoring the subrecipient’s plan. (3) Each Indian tribal government desiring of indirect costs must submit its ICRP to its cognizant agency, which generally is the Department of the Interior. (4) ICRPs must be developed (and, when required, submitted) within 6 months after the close of the governmental unit’s fiscal year. e. Documentation and Certification Requirements The documentation and certification requirements for ICRPs are included in A87, Attachment E, paragraphs D.2 and 3, respectively. The proposal and related documentation must be retained for audit in accordance with the record retention requirements contained in the A-102 Common Rule. 2. Audit Objectives – State/Local Department or Agency Costs – Direct and Indirect a. Obtain an understanding of internal control over the compliance requirements for State/local department or agency costs, assess risk, and test internal control as required by OMB Circular A-133 §___.500(c). b. Determine whether the governmental unit complied with the provisions of A-87 as follows: (1) Direct charges to Federal awards were for allowable costs. (2) Charges to cost pools used in calculating indirect cost rates were for allowable costs. (3) The methods for allocating the costs are in accordance with the applicable cost principles, and produce an equitable and consistent distribution of costs (e.g., all activities that benefit from the indirect cost, including unallowable activities, must receive an appropriate allocation of indirect costs). (4) Indirect cost rates were applied in accordance with approved indirect cost rate agreements (ICRA), or special award provisions or limitations, if different from those stated in negotiated rate agreements. (5) For local departments or agencies that do not have to submit an ICRP to the cognizant Federal agency, indirect cost rates were applied in accordance with the ICRP maintained on file.
under certain conditions. Sample these costs when they have been charged direct to Federal awards to determine consistent treatment for non-Federal awards, instructional activity, or other institutional activity (A-21, section F.6.). (2) Office supplies, postage, local telephone costs and memberships are normally treated as indirect. Sample these costs when they have been charged direct to Federal awards to determine consistent treatment for non-Federal awards, instructional activity, or other institutional activity (A-21, section F.6.). f. Capital expenditures for general and special-purpose equipment may be charged direct to awards with approval of the awarding agency. Sample these costs when they have been charged direct to Federal awards to determine consistent treatment for non-Federal awards, instructional activity, or other institutional activity (A-21, section J.18.). g. Test costs direct charged to Federal awards and indirect costs accumulated in the educational institution’s accounting system for adequate accounting of unallowable costs (A-21 section C.12 and FAR Appendix, 48 CFR section 9905.505). h. Determine that the educational institution’s cost accounting period for accumulating costs on Federal awards and indirect cost pools are consistent with the institution’s fiscal year. If not, determine that the institution has met the criteria for an exception described in A-21, section C.13 and that it has been approved by the cognizant Federal agency (A-21, section C.13 and FAR Appendix, 48 CFR section 9905.506). Allowable Costs – Special Requirements – Internal Service, Central Service, Pension, or Similar Activities or Funds 1. Compliance Requirement Charges made from internal service, central service, pension, or similar activities or funds, must follow the applicable cost principles provided in A-21. 2. Audit Objectives Obtain an understanding of internal control, assess risk, and test internal control as required by OMB Circular A-133 §___.500(c). Determine whether charges made from internal service, central service, pension, or similar activities or funds are in accordance with A-21.
(c) A full discussion of the direct allocation base method can be found in A-122, Attachment A, subparagraph D.4.a. through D.4.c. 2. Audit Objectives – Indirect Costs a. For NPOs that charge indirect costs to Federal awards based on federally approved rates: (1) Obtain an understanding of internal controls, assess risk, and test internal controls as required by OMB Circular A-133, §___.500(c). (2) Determine whether the organization complied with the provisions of A-122 and CAS (if applicable) as follows: (a) Indirect cost rates were applied in accordance with approved rate agreements and any special award provisions/limitations (if different from those stated in the negotiated rate agreement). (b) Associated billings were the result of applying the approved rate to the proper base amount(s). (3) For fixed rate agreements, predetermined rate agreements, and provisional rate agreements determine whether the base used to distribute the approved indirect cost rate is accurate and reflects the terms of the agreement. (4) For fixed rate agreements, determine whether the organization has adequately determined the actual indirect costs for the fiscal year being audited and performed the necessary computations to accurately report the carry-forward adjustment to the rate computation for the subsequent period. b. For NPOs that charge indirect costs to Federal awards that are not based on federally approved rates: Obtain an understanding of internal controls, assess risk, and test internal controls as required by OMB Circular A-133, §___.500(c). (2) Determine whether costs that are directly allocated to an award using the Direct Allocation Method are prorated using a base that accurately measures the benefits provided to each award or activity. (3) Determine whether an ICRP was prepared and submitted to the organization’s cognizant agency (the Federal agency responsible for negotiating and approving indirect cost rates) as required by A-122. Verify that billings are based on the ICRP.
to mention a particular item of cost is not intended to imply that it is either allowable or unallowable; rather, determination of allowability in each case should be based on the treatment provided for similar or related items of cost and the principles described in 2 CFR sections 200.402 through 200.411. List of Selected Items of Cost Contained in 2 CFR part 200 The following exhibit provides a listing of selected items of cost contained in the cost principles in 2 CFR part 200, subpart E. Several cost items are unique to one type of entity (e.g., commencement and convocation costs are applicable only to IHEs). The exhibit lists the selected items of cost along with a brief description of their allowability. The reader is strongly cautioned not to rely exclusively on the summary but to place primary reliance on the referenced 2 CFR part 200 text. Selected Items of Cost - Exhibit 1 Selected Cost Item Uniform Guidance General Reference Items of Cost Requiring Prior Approval States, Local Governments, Indian Tribes Institutions of Higher Education Nonprofit Organizations Items of Cost not Treated the Same Across Entities Advertising and public relations costs §200.421 Allowable with restrictions Allowable with restrictions Allowable with restrictions Advisory councils §200.422 Allowable with restrictions Allowable with restrictions Allowable with restrictions Alcoholic beverages §200.423 Unallowable Unallowable Unallowable Alumni/ae activities §200.424 Not specifically addressed Unallowable Not specifically addressed X Audit services §200.425 Allowable with restrictions Allowable with restrictions Allowable with restrictions Bad debts §200.426 Unallowable Unallowable Unallowable Bonding costs §200.427 Allowable with restrictions Allowable with restrictions Allowable with restrictions Collection of improper payments §200.428 Allowable Allowable Allowable
Commencement and convocation costs §200.429 Not specifically addressed Unallowable with exceptions Not specifically addressed X Compensation for personal services §200.430 X (related to the salaries of administrative and clerical staff) Allowable with restrictions; Special conditions apply (e.g., §200.430(i)(5) Allowable with restrictions; Special conditions apply (e.g., §200.430(h) Allowable with restrictions; Special conditions apply (e.g., §200.430(g) X Compensation – fringe benefits §200.431 X (related to costs for IHEs) Allowable with restrictions Allowable with restrictions; Special conditions apply Allowable with restrictions X Conferences §200.432 Allowable with restrictions Allowable with restrictions Allowable with restrictions Contingency provisions §200.433 Unallowable with exceptions Unallowable with exceptions Unallowable with exceptions Contributions and donations §200.434 Unallowable (made by entity); not reimbursable but value may be used as cost sharing or matching (made to non-Federal entity) Unallowable (made by entity); not reimbursable but value may be used as cost sharing or matching (made to non-Federal entity) Unallowable (made by entity); not reimbursable, but value may be used as cost sharing or matching (made to entity); with restrictions, the value of services may be considered when determining an X
entity’s indirect cost rate under certain circumstances Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements §200.435 Allowable with restrictions Allowable with restrictions Allowable with restrictions Depreciation §200.436 Allowable with qualifications Allowable with qualifications Allowable with qualifications Employee health and welfare costs §200.437 Allowable with restrictions Allowable with restrictions Allowable with restrictions Entertainment costs §200.438 X Unallowable with exceptions Unallowable with exceptions Unallowable with exceptions Equipment and other capital expenditures §200.439 X Allowability based on specific requirements Allowability based on specific requirements Allowability based on specific requirements Exchange Rates §200.440 X Allowable with restrictions Allowable with restrictions Allowable with restrictions Fines, penalties, damages and other settlements §200.441 X Unallowable with exception Unallowable with exception Unallowable with exception Fund raising and investment management §200.442 X Unallowable with exceptions Unallowable with exceptions Unallowable with exceptions
costs Gains and losses on disposition of depreciable assets §200.443 Allowable with restrictions Allowable with restrictions Allowable with restrictions General costs of government §200.444 Unallowable with exceptions Not specifically addressed Not specifically addressed X Goods or services for personal use §200.445 X Unallowable (goods/services); allowable (housing) with restrictions Unallowable (goods/services); allowable (housing) with restrictions Unallowable allowable (housing) with restrictions Idle facilities and idle capacity §200.446 Idle facilities - unallowable with exceptions; idle capacity - allowable with restrictions Idle facilities - unallowable with exceptions; idle capacity - allowable with restrictions Idle facilities - unallowable with exceptions; idle - capacity allowable with restrictions Insurance and indemnification §200.447 X Allowable with restrictions Allowable with restrictions Allowable with restrictions Intellectual property §200.448 Allowable with restrictions Allowable with restrictions Allowable with restrictions Interest §200.449 Allowable with restrictions Allowable with restrictions Allowable with restrictions X Lobbying §200.450 Unallowable Unallowable; Special additional restrictions Unallowable; Special additional restrictions X
Plant and security costs §200.457 Allowable ; capital expenditures are subject to §200.439 Allowable ; capital expenditures are subject to §200.439 Allowable ; capital expenditures are subject to §200.439 Professional service costs §200.459 Allowable with restrictions Allowable with restrictions Allowable with restrictions Proposal costs §200.460 Allowable with restrictions Allowable with restrictions Allowable with restrictions Publication and printing costs §200.461 Allowable with restrictions Allowable with restrictions Allowable with restrictions Rearrangement and reconversion costs §200.462 X Allowable (ordinary and normal) Allowable (ordinary and normal) Allowable (ordinary and normal) Recruiting costs §200.463 Allowable with restrictions Allowable with restrictions Allowable with restrictions Relocation costs of employees §200.464 Allowable with restrictions Allowable with restrictions Allowable with restrictions Rental costs of real property and equipment §200.465 Allowable with restrictions Allowable with restrictions Allowable with restrictions Scholarships and student aid costs §200.466 Not specifically addressed Allowable with restrictions Not specifically addressed X Selling and marketing costs §200.467 X Unallowable with exceptions Unallowable with exceptions Unallowable with exceptions
Specialized service facilities §200.468 Allowable with restrictions Allowable with restrictions Allowable with restrictions Student activity costs §200.469 Unallowable unless specifically provided for in the Federal award Unallowable unless specifically provided for in the Federal award Unallowable unless specifically provided for in the Federal award Taxes (including Value Added Tax) §200.470 Allowable with restrictions §200.470(a)(1) Allowable with restrictions §200.470(b)(1) Allowable with restrictions X Termination costs §200.471 Allowable with restrictions Allowable with restrictions Allowable with restrictions Training and education costs §200.472 Allowable for employee development Allowable for employee development Allowable for employee development Transportation costs §200.473 Allowable with restrictions Allowable with restrictions Allowable with restrictions Travel costs §200.474 X Allowable with restrictions Allowable with restrictions Allowable with restrictions Trustees §200.475 Not specifically addressed Allowable with restrictions Allowable with restrictions X