Determining Allowability of Costs for Grants

Policy: in accordance with 2 CFR 200.402-
Effective: July 1, 2018
Source: VPFB

  1. All grant expenditures are reviewed to ensure they are allowable under the terms of the grant, properly authorized and adequately documented, and within the allowed time period.
  2. If the paperwork submitted does not provide adequate information as to the nature of the charge and how it related to the grant project, the Accounting Manager will request other supporting documents and narrative.
  3. Grant funds must be separately accounted for using unique unit numbers (7XXXX).
  4. Expenses charged to grant funds must be clearly identifiable as individually allowable costs.
  5. Except where otherwise authorized, costs must meet the following general criteria in order to be allowable under Federal awards:
  1. Be necessary and reasonable for the performance of the Federal award
  2. Be allocable (i.e. chargeable and assignable) to that specific Federal award or cost objective in accordance with relative benefits received
  3. Be authorized or not prohibited under state or local laws or regulations
  4. Conform to any limitations or exclusions set forth in these principles or in the Federal awards as to types or amount of cost items
  5. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of The College.
  6. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
  7. Be determined in accordance with generally accepted accounting principles (GAAP)
  8. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period.
  9. Be net of all applicable credits and adequately documented.
  10. Be generally recognized as ordinary, necessary, and prudent for the proper and efficient performance of the Federal award, in regard to State and Federal laws, market prices, and the general practices and policies of The College.
  1. Any cost allocable to a particular Federal award under the principles provided for in this part may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons. However, this prohibition would not preclude The College from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal award.
  2. If a cost benefits two or more projects or activities proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefits. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefited projects on any reasonable documented basis.
  3. If reasonableness and allocability of certain items of costs is difficult to determine, The College may seek the prior written approval of the cognizant agency for indirect costs or the Federal awarding agency in advance of the incurrence of special or unusual costs (as detailed in 2 CFR 200.407).