Please enjoy this excerpt from Boyar and Allen’s self study book on Cost Principles available at Yellowbook-CPE.com here: https://yellowbook.ideamakr.com/
Objectives:
- Identify under which conditions morale costs, fines and penalties, insurance, interest, and membership costs are allowable costs
- Distinguish between allowable and unallowable pre-award costs, taxes, and travel costs
Until the implementation of the Supercircular, the costs of employee information publications, health clinics, recreational activities, and counseling services were allowable when incurred in accordance with the entity’s established practice or custom. However, unlike the previous rules, the Supercircular no longer makes any reference to recreational activities or morale costs.
This change corrects a basic inconsistency of the previous cost principles. Although they permitted employee recreational activities costs, they also prohibited entertainment costs. It was not always easy to differentiate between recreational activities and entertainment. Prohibiting employee morale costs or recreational activity costs eliminates the potential conflict
(a) Costs incurred in accordance with the non-Federal entity’s documented policies for the improvement of working conditions, employer-employee relations, employee health, and employee performance are allowable.
(b) Such costs will be equitably apportioned to all activities of the non-Federal entity. Income generated from any of these activities will be credited to the cost thereof unless such income has been irrevocably sent to employee welfare organizations.
(c) Losses resulting from operating food services are allowable only if the non-Federal entity’s objective is to operate such services on a break-even basis. Losses sustained because of operating objectives other than the above are allowable only:
(1) Where the non-Federal entity can demonstrate unusual circumstances; and
(2) With the approval of the cognizant agency for indirect costs.
Fines and Penalties
2 CFR 200.441 provides that fines and penalties, including damages and settlements resulting from violations of laws and regulations, are unallowable.
However, these costs are allowable when they are necessary to comply with the:
- Specific provisions of the federal award, or
- Written instructions by the awarding agency authorizing such payments.
Costs resulting from non‑Federal entity violations of, alleged violations of, or failure to comply with, Federal, state, tribal, local or foreign laws and regulations are unallowable, except when incurred as a result of compliance with specific provisions of the Federal award, or with prior written approval of the Federal awarding agency. See also §200.435 Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements.
Because there can be differences of opinion about the meaning of the specific provisions, we strongly suggest that grantees obtain written approval from the federal agency before charging fines or penalties to a federal award.
Insurance Costs
Costs of insurance required or approved and maintained, pursuant to the federal award, are generally allowable.
(a) Costs of insurance required or approved and maintained, pursuant to the Federal award, are allowable.
Insurance Costs in Connection with General Conduct of Activities
Costs of insurance in connection with the general conduct of activities are allowable subject to the following limitations:
- The type, extent, and cost of coverage must be in accordance with the entity’s policy and sound business practice.
- Insurance costs or amounts contributed to any reserve to cover the risk of loss of, or damage to, federal government property are unallowable. However, they may be allowable if the awarding agency specifically requires or approves such costs. (It is important to recognize that very little property acquired under federal awards is federal property. In almost all cases, title is taken in the name of the grantee and is, therefore, grantee property.)
(b) Costs of other insurance in connection with the general conduct of activities are allowable subject to the following limitations:
(1) Types and extent and cost of coverage are in accordance with the non-Federal entity’s policy and sound business practice.
(2) Costs of insurance or of contributions to any reserve covering the risk of loss of, or damage to, Federal government property are unallowable except to the extent that the Federal awarding agency has specifically required or approved such costs.
(3) Costs allowed for business interruption or other similar insurance must exclude coverage of management fees.
Let’s Soak the Feds!
We audited a state agency that administered an unemployment insurance fund for non‑certificated personnel[1] in school districts. For most employees, the insurance rates were set using actuarial data, as they should be. However, employees charged to federal grants had a different rate: one set by the state legislature. The rate was significantly higher than the rate set by actuarial techniques.
The state put revenues from both techniques into the same fund and did not differentiate between them. As a result of the higher charges for persons working on federal grants, the fund had more money than it needed, actuarially. Thus, the rate developed actuarially went down, and continued to go down.
After many years, the insurance rates charged to persons working on federal grants were nine times the rates charged to other employees! After audit reports, determination letters, lawsuits, and appeals, the state finally reimbursed the federal government over $18 million.
Reserve Funds under a Self-Insurance Program
The establishment of a reserve fund under a self-insurance program is allowable to the extent that types of coverage, extent of coverage, rates, and premiums would have been allowed had insurance been purchased to cover the risks.
(d) Contributions to a reserve for certain self-insurance programs including workers’ compensation, unemployment compensation, and severance pay are allowable subject to the following provisions:
(1) The type of coverage and the extent of coverage and the rates and premiums would have been allowed had insurance (including reinsurance) been purchased to cover the risks. However, provision for known or reasonably estimated self-insured liabilities, which do not become payable for more than one year after the provision is made, must not exceed the discounted present value of the liability. The rate used for discounting the liability must be determined by giving consideration to such factors as the non-Federal entity’s settlement rate for those liabilities and its investment rate of return.
(2) Earnings or investment income on reserves must be credited to those reserves.
(3)(i) Contributions to reserves must be based on sound actuarial principles using historical experience and reasonable assumptions. Reserve levels must be analyzed and updated at least biennially for each major risk being insured and take into account any reinsurance, coinsurance, etc. Reserve levels related to employee-related coverages will normally be limited to the value of claims:
(A) Submitted and adjudicated but not paid;
(B) Submitted but not adjudicated; and
(C) Incurred but not submitted.
(ii) Reserve levels in excess of the amounts based on the above must be identified and justified in the cost allocation plan or indirect cost rate proposal.
(4) Accounting records, actuarial studies, and cost allocations (or billings) must recognize any significant differences due to types of insured risk and losses generated by the various insured activities or agencies of the non-Federal entity. If individual departments or agencies of the non-Federal entity experience significantly different levels of claims for a particular risk, those differences are to be recognized by the use of separate allocations or other techniques resulting in an equitable allocation.
(5) Whenever funds are transferred from a self-insurance reserve to other accounts (e.g., general fund or unrestricted account), refunds must be made to the Federal government for its share of funds transferred, including earned or imputed interest from the date of transfer and debt interest, if applicable, chargeable in accordance with applicable Federal cognizant agency for indirect cost, claims collection regulations.
(e) Insurance refunds must be credited against insurance costs in the year the refund is received.
(f) Indemnification includes securing the non-Federal entity against liabilities to third persons and other losses not compensated by insurance or otherwise. The Federal government is obligated to indemnify the non-Federal entity only to the extent expressly provided for in the Federal award, except as provided in paragraph (c) of this section.
Other Insurance and Indemnification Costs
Actual losses, which could have been covered by permissible insurance through a self‑insurance program or otherwise, are unallowable, unless expressly provided for in the federal award or as described below. However, the federal government will participate in:
- Actual losses related to deductible amounts, or
- Actual losses of a self-insurance fund that are in excess of reserves.
Minor losses not covered by insurance, such as spoilage, breakage, and disappearance of small hand tools, which occur in the ordinary course of operations, are allowable.
(c) Actual losses which could have been covered by permissible insurance (through a self‑insurance program or otherwise) are unallowable, unless expressly provided for in the Federal award. However, costs incurred because of losses not covered under nominal deductible insurance coverage provided in keeping with sound management practice, and minor losses not covered by insurance, such as spoilage, breakage, and disappearance of small hand tools, which occur in the ordinary course of operations, are allowable.
Insurance Costs Applicable to Trustees and Employees
The costs of insurance on the lives of trustees, officers, or other employees holding positions of similar responsibility are allowable only to the extent that the insurance represents additional compensation. The costs of such insurance when the organization is named as beneficiary are unallowable.
(b)(4) Costs of insurance on the lives of trustees, officers, or other employees holding positions of similar responsibilities are allowable only to the extent that the insurance represents additional compensation (see §200.431 Compensation–-fringe benefits). The cost of such insurance when the non-Federal entity is identified as the beneficiary is unallowable.
Interest under 2 CFR 200
Under 2 CFR 200.449 costs incurred for interest on borrowed funds or the use of a non-Federal entity’s own funds, however represented, are generally unallowable. However, interest incurred to acquire capital assets is generally allowable.
(a) General. Costs incurred for interest on borrowed capital, temporary use of endowment funds, or the use of the non-Federal entity’s own funds, however represented, are unallowable. Financing costs (including interest) to acquire, construct, or replace capital assets are allowable, subject to the conditions in this section.
(b)(1) Capital assets is defined as noted in §200.12 Capital assets. An asset cost includes (as applicable) acquisition costs, construction costs, and other costs capitalized in accordance with GAAP.
(2) For non-Federal entity fiscal years beginning on or after January 1, 2016, intangible assets include patents and computer software. For software development projects, only interest attributable to the portion of the project costs capitalized in accordance with GAAP is allowable.
Interest – Conditions for All Non-Federal Entities
Interest costs incurred to acquire capital assets are allowable provided that:
- The assets are used in support of federal awards (either directly or indirectly);
- The property is acquired at fair market value from an unrelated, third party;
- The financing is provided by a third party external to the non-Federal entity;
- The entity limits claims for Federal reimbursement of interest costs to the least expensive alternative;
- Interest costs are capitalized in accordance with GAAP;
- Earnings on any debt service fund, pending construction or acquisition, are used to offset costs; and
- The governmental unit meets the financing requirements stipulated regarding debt arrangements in excess of $1 million.
(c) Conditions for all non-Federal entities.
(1) The non-Federal entity uses the capital assets in support of Federal awards;
(2) The allowable asset costs to acquire facilities and equipment are limited to a fair market value available to the non-Federal entity from an unrelated (arm’s length) third party.
(3) The non-Federal entity obtains the financing via an arm’s-length transaction (that is, a transaction with an unrelated third party); or claims reimbursement of actual interest cost at a rate available via such a transaction.
(4) The non-Federal entity limits claims for Federal reimbursement of interest costs to the least expensive alternative. For example, a capital lease may be determined less costly than purchasing through debt financing, in which case reimbursement must be limited to the amount of interest determined if leasing had been used.
(5) The non-Federal entity expenses or capitalizes allowable interest cost in accordance with GAAP.
(6) Earnings generated by the investment of borrowed funds pending their disbursement for the asset costs are used to offset the current period’s allowable interest cost, whether that cost is expensed or capitalized. Earnings subject to being reported to the Federal Internal Revenue Service under arbitrage requirements are excludable.
(7) The following conditions must apply to debt arrangements over $1 million to purchase or construct facilities, unless the non-Federal entity makes an initial equity contribution to the purchase of 25 percent or more. For this purpose, “initial equity contribution” means the amount or value of contributions made by the non-Federal entity for the acquisition of facilities prior to occupancy.
(i) The non-Federal entity must reduce claims for reimbursement of interest cost by an amount equal to imputed interest earnings on excess cash flow attributable to the portion of the facility used for Federal awards.
(ii) The non-Federal entity must impute interest on excess cash flow as follows:
(A) Annually, the non-Federal entity must prepare a cumulative (from the inception of the project) report of monthly cash inflows and outflows, regardless of the funding source. For this purpose, inflows consist of Federal reimbursement for depreciation, amortization of capitalized construction interest, and annual interest cost. Outflows consist of initial equity contributions, debt principal payments (less the pro-rata share attributable to the cost of land), and interest payments.
(B) To compute monthly cash inflows and outflows, the non-Federal entity must divide the annual amounts determined in step (i) by the number of months in the year (usually 12) that the building is in service.
(C) For any month in which cumulative cash inflows exceed cumulative outflows, interest must be calculated on the excess inflows for that month and be treated as a reduction to allowable interest cost. The rate of interest to be used must be the three‑month Treasury bill closing rate as of the last business day of that month.
(8) Interest attributable to a fully depreciated asset is unallowable.
****
Interest – Additional Conditions for Governments
For state and local governments, interest and other financing costs associated with the otherwise allowable costs of building acquisition, construction, or fabrication, reconstruction or remodeling completed on or after October 1, 1980, is allowable.
Interest and other financing costs associated with the otherwise allowable purchase costs of land or equipment on or after September 1, 1995, is allowable. That means that you don’t have to worry about interest on equipment. No entity is still paying interest on equipment purchased before 2000. For the most part, mortgages or loans on real property acquired before 1980 also have been paid off by now. However, there may still be a few buildings with a few years to go on the mortgage.
(d) Additional conditions for states, local governments and Indian tribes. For costs to be allowable, the non-Federal entity must have incurred the interest costs for buildings after October 1, 1980, or for land and equipment after September 1, 1995.
(1) The requirement to offset interest earned on borrowed funds against current allowable interest cost (paragraph (c) (5), above) also applies to earnings on debt service reserve funds.
(2) The non-Federal entity will negotiate the amount of allowable interest cost related to the acquisition of facilities with asset costs of $1 million or more, as outlined in paragraph (c)(7) of this section. For this purpose, a non-Federal entity must consider only cash inflows and outflows attributable to that portion of the real property used for Federal awards.
Interest – Additional Conditions for Nonprofits
2 CFR 200.449 provides that costs incurred for interest on borrowed funds or the use of a nonprofit organization’s own funds, however represented, are generally unallowable. However, interest on debt incurred to purchase or replace capital assets acquired after September 29, 1995, and used in support of federal awards is allowable. Historically, these have included:
- Renovations,
- Alterations,
- Equipment,
- Land, and
- Capital assets acquired through capital leases.
The interest costs are allowable provided that the nonprofit organization meets the criteria set out in 2 CFR 200.449.
(f) Additional condition for nonprofit organizations. For costs to be allowable, the nonprofit organization incurred the interest costs after September 29, 1995, in connection with acquisitions of capital assets that occurred after that date.
(g) The interest allowability provisions of this section do not apply to a nonprofit organization subject to “full coverage” under the Cost Accounting Standards (CAS), as defined at 48 CFR 9903.201-2(a). The non-Federal entity’s Federal awards are instead subject to CAS 414 (48 CFR 9904.414), “Cost of Money as an Element of the Cost of Facilities Capital”, and CAS 417 (48 CFR 9904.417), “Cost of Money as an Element of the Cost of Capital Assets Under Construction”.
As with state and local agencies, you don’t have to worry about interest being unallowable on equipment. Any loans for purchasing equipment before September 1995 have long since been paid off. However, many nonprofit entities will have buildings that were purchased before 1995 and on which the mortgages have not yet been paid in full.
Costs of Memberships
In general, costs related to professional and technical memberships and subscriptions, as well as professional activities, are permissible.
Under 2 CFR 200.454, the following membership costs are allowable:
- Costs of the entity’s memberships in business, technical, and professional organizations;
- Costs of the entity’s subscriptions to business, professional, and technical periodicals; and
- Costs of membership in civic and community, social organizations, as a direct cost so long as the awarding agency approves.
Cost of memberships in country clubs or social clubs or in organizations whose purpose is lobbying are unallowable.
(a) Costs of the non-Federal entity’s membership in business, technical, and professional organizations are allowable.
(b) Costs of the non-Federal entity’s subscriptions to business, professional, and technical periodicals are allowable.
(c) Costs of membership in any civic or community organization are allowable with prior approval by the Federal awarding agency or pass-through entity.
(d) Costs of membership in any country club or social or dining club or organization are unallowable.
(e) Costs of membership in organizations whose primary purpose is lobbying are unallowable. See also §200.450 Lobbying.
Pre-Award Costs
Pre-award costs are those incurred before the effective date of the award. The costs must be:
- Incurred pursuant to the agreement’s negotiation, and
- Necessary to comply with the proposed delivery schedule or period of performance of the award.
To be allowable, pre-award costs must meet both of the following criteria:
1.The costs are allowable only to the extent that they would have been allowable if incurred after the date of the award.
2.The costs are allowable only with the written approval of the awarding agency.
These costs often transpire because a grant is virtually certain, but the paperwork hasn’t arrived, and actions need to be taken to ensure that the project will be successful. However, grantees must recognize that if they incur pre-award costs, they are “betting on the come.” As long as the grant is subsequently awarded and the granting official approves the pre-award costs, then the grantee can claim the costs incurred. If either of those situations does not occur, then the costs will be unallowable.
Pre-award costs are those incurred prior to the effective date of the Federal award directly pursuant to the negotiation and in anticipation of the Federal award where such costs are necessary for efficient and timely performance of the scope of work. Such costs are allowable only to the extent that they would have been allowable if incurred after the date of the Federal award and only with the written approval of the Federal awarding agency.
Proposal costs are the costs of preparing bids, proposals, or applications on potential Federal and non‑Federal awards or projects, including the development of data necessary to support the non‑Federal entity’s bids or proposals. Proposal costs of the current accounting period of both successful and unsuccessful bids and proposals normally should be treated as indirect (F&A) costs and allocated currently to all activities of the non‑Federal entity. No proposal costs of past accounting periods will be allocable to the current period.
Taxes
In general, taxes are allowable costs for reimbursements under federal awards.
Under 2 CFR 200.470 (a), taxes a governmental unit is legally required to pay are allowable, unless they are self-assessed taxes that disproportionately affect federal programs or changes in tax policies that disproportionately affect federal programs. Such exceptions are very rare. In general, we rarely see unallowable taxes, unless the entities are not required to pay them.
Gasoline taxes, motor vehicle fees, and other taxes that are effectively user fees for benefits provided to the federal government are allowable.
(a) For states, local governments and Indian tribes:
(1) Taxes that a governmental unit is legally required to pay are allowable, except for self‑assessed taxes that disproportionately affect Federal programs or changes in tax policies that disproportionately affect Federal programs.
(2) Gasoline taxes, motor vehicle fees, and other taxes that are in effect user fees for benefits provided to the Federal government are allowable.
(3) This provision does not restrict the authority of the Federal awarding agency to identify taxes where Federal participation is inappropriate. Where the identification of the amount of unallowable taxes would require an inordinate amount of effort, the cognizant agency for indirect costs may accept a reasonable approximation thereof.
For nonprofit organizations, 2 CFR 200.470 (b), provides that taxes are allowable, with some exceptions:
(b) For nonprofit organizations and IHEs:
(1) In general, taxes which the non-Federal entity is required to pay and which are paid or accrued in accordance with GAAP, and payments made to local governments in lieu of taxes which are commensurate with the local government services received are allowable, except for:
(i) Taxes from which exemptions are available to the non-Federal entity directly or which are available to the non-Federal entity based on an exemption afforded the Federal government and, in the latter case, when the Federal awarding agency makes available the necessary exemption certificates,
(ii) Special assessments on land which represent capital improvements, and
(iii) Federal income taxes.
The cost principles require that tax refunds and any interest paid to the non-Federal entity be credited to the Federal government:
(b)(2) Any refund of taxes, and any payment to the non-Federal entity of interest thereon, which were allowed as Federal award costs, will be credited either as a cost reduction or cash refund, as appropriate, to the Federal government. However, any interest actually paid or credited to an non-Federal entity incident to a refund of tax, interest, and penalty will be paid or credited to the Federal government only to the extent that such interest accrued over the period during which the non-Federal entity has been reimbursed by the Federal government for the taxes, interest, and penalties.
****
Travel
In general, travel costs[2] are allowable, provided that they conform to a grantee’s written policy and meet applicable cost rules in 2 CFR 200.474. Travel related costs may be charged on:
1.An actual cost basis,
2.A per diem or mileage basis in lieu of actual costs incurred, or
3.A combination of the two, if consistently followed for an entire trip.
(a) General. Travel costs are the expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business of the non‑Federal entity. Such costs may be charged on an actual cost basis, on a per diem or mileage basis in lieu of actual costs incurred, or on a combination of the two, provided the method used is applied to an entire trip and not to selected days of the trip, and results in charges consistent with those normally allowed in like circumstances in the non-Federal entity’s non-federally-funded activities and in accordance with non-Federal entity’s written travel reimbursement policies. Notwithstanding the provisions of §200.444 General costs of government, travel costs of officials covered by that section are allowable with the prior written approval of the Federal awarding agency or pass-through entity when they are specifically related to the Federal award.
(b) Lodging and subsistence. Costs incurred by employees and officers for travel, including costs of lodging, other subsistence, and incidental expenses, must be considered reasonable and otherwise allowable only to the extent such costs do not exceed charges normally allowed by the non-Federal entity in its regular operations as the result of the non-Federal entity’s written travel policy. In addition, if these costs are charged directly to the Federal award documentation must justify that:
(1) Participation of the individual is necessary to the Federal award; and
(2) The costs are reasonable and consistent with non-Federal entity’s established travel policy.
****
Travel and subsistence costs of trustees (or directors) at IHEs and nonprofit organizations are allowable. See also §200.474 Travel costs.
While the cost principles preclude the allowability of dependent travel under most conditions (§200.474,(c)(2), they provide that dependent care costs are permissible when an individual is in travel status when specified conditions are met.
(c)(1) Temporary dependent care costs (as dependent is defined in 26 U.S.C. 152) above and beyond regular dependent care that directly results from travel to conferences is allowable provided that:
(i) The costs are a direct result of the individual’s travel for the Federal award;
(ii) The costs are consistent with the non-Federal entity’s documented travel policy for all entity travel; and
(iii) Are only temporary during the travel period.
(2) Travel costs for dependents are unallowable, except for travel of duration of six months or more with prior approval of the Federal awarding agency. See also §200.432 Conferences.
In the absence of an acceptable, written policy regarding travel costs, the rates and amounts established under federal rules would determine allowability.
(c)(3) In the absence of an acceptable, written non-Federal entity policy regarding travel costs, the rates and amounts established under 5 U.S.C. 5701-11, (“Travel and Subsistence Expenses; Mileage Allowances”), or by the Administrator of General Services, or by the President (or his or her designee) pursuant to any provisions of such subchapter must apply to travel under Federal awards (48 CFR 31.205-46(a)).
Airfare costs in excess of the customary standard commercial airfare (coach or equivalent), federal government contract airfare (where authorized and available), or the lowest commercial discount airfare are generally unallowable. Such costs are unallowable unless the flight meets one of the following conditions:
1.It requires circuitous, unacceptable routing,
2.It requires travel during unreasonable hours,
3.It excessively prolongs travel,
4.It results in additional costs that would offset the transportation savings, or
5.It does not reasonably accommodate the traveler’s medical needs.
For example, an employee is scheduled to take a cross-country flight for grant purposes. A week before his flight, he returns to the office with a full-leg cast, explaining that he broke his leg in a near-death skiing accident. Since he will be unable to fit into a coach seat during his cross-country trip next week, he will need to travel first class. In that instance, the first class airfare would be allowable.
(d) Commercial air travel.
(1) Airfare costs in excess of the basic least expensive unrestricted accommodations class offered by commercial airlines are unallowable except when such accommodations would:
(i) Require circuitous routing;
(ii) Require travel during unreasonable hours;
(iii) Excessively prolong travel;
(iv) Result in additional costs that would offset the transportation savings; or
(v) Offer accommodations not reasonably adequate for the traveler’s medical needs. The non-Federal entity must justify and document these conditions on a case-by-case basis in order for the use of first-class or business-class airfare to be allowable in such cases.
(2) Unless a pattern of avoidance is detected, the Federal government will generally not question a non-Federal entity’s determinations that customary standard airfare or other discount airfare is unavailable for specific trips if the non-Federal entity can demonstrate that such airfare was not available in the specific case.
(e) Air travel by other than commercial carrier. Costs of travel by non-Federal entity-owned, -leased, or -chartered aircraft include the cost of lease, charter, operation (including personnel costs), maintenance, depreciation, insurance, and other related costs. The portion of such costs that exceeds the cost of airfare as provided for in paragraph (d) of this section, is unallowable.
Summary
Costs related to employee health and welfare are allowable. Previously, the costs of employee information publications, health clinics, recreational activities, and counseling services were allowable, when incurred in accordance with the entity’s established practice or custom. However, under the new uniform guidance, costs relating to employee morale or recreational activities are unallowable.
Fines and penalties, including damages and settlements resulting from violations of laws and regulations, are unallowable. However, these costs are allowable when:
1.They are necessary to comply with the specific provisions of the federal award, or
2.There are written instructions by the awarding agency authorizing such payments.
We will reiterate the point that we made. Whether the costs meet that first possibility is subject to a difference of opinion. Therefore, you should always attempt to get the granting agency to approve any such cost in advance.
Insurance costs required or approved and maintained, pursuant to the federal award, are generally allowable. Within given rules, the establishment of a reserve fund under a self‑insurance program is allowable. Actual losses, which could have been covered by permissible insurance or through a self-insurance program, are unallowable. However, the deductible amounts of insurance coverage are permissible costs. Life insurance on trustees, officers, or other employees holding positions of similar responsibility in the nonprofit organization are allowable provided that the insurance represents additional compensation and the organization is not the beneficiary.
Interest costs incurred on borrowed funds or the use of an entity’s own funds are generally unallowable. However, interest costs to acquire capital assets are generally allowable.
Professional and technical membership costs and subscriptions, as well as professional activities, are generally allowable costs. Cost of memberships in country clubs or social clubs or in organizations whose purpose is lobbying are unallowable.
Pre-award costs are allowable only:
1.To the extent that they would have been allowable if incurred after the date of the award, and
2.With the written approval of the awarding agency.
Taxes are allowable costs for reimbursements under federal awards. Taxes that a governmental unit is legally required to pay are allowable, unless they are self-assessed taxes that disproportionately affect federal programs or changes in tax policies that disproportionately affect federal programs.
Lastly, travel costs are allowable, provided that they conform to a grantee’s written policy. But, you should always keep in the mind the general cost principle of reasonableness. In general, airfares in excess of coach are unallowable. Foreign travel must have prior approval by the awarding agency. In the absence of an acceptable, written policy regarding travel costs, the rates and amounts established under federal rules determine allowability.
Yellowbook-CPE.com is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: