Allowable and Non-Allowable Costs Guidance
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|Date:||Friday, 19 August 2022, 7:28 PM|
Allowable and Non-Allowable Costs
Table of contents
- 1. General Categories of Allowable Non-Allowable Costs
- 2. Supplementing Versus Supplanting
- 3. Specific Cost Guidance by Category
- 3.1. Advertising and public relations costs
- 3.2. Advisory councils
- 3.3. Alcoholic beverages
- 3.4. Alumni/ae activities
- 3.5. Audit costs and related services
- 3.6. Bad debts
- 3.7. Bonding costs
- 3.8. Commencement and convocation costs
- 3.9. Compensation for personal services
- 3.10. Conferences
- 3.11. Contingency provisions
- 3.12. Legal Costs
- 3.13. Depreciation
- 3.14. Donations and contributions
- 3.15. Employee health, and welfare costs and costs
- 3.16. Entertainment costs
- 3.17. Equipment and other capital expenditures
- 3.18. Fines and penalties
- 3.19. Fund raising and investment management costs
- 3.20. Gain and losses on depreciable assets
- 3.21. General cost to government
- 3.22. Idle facilities and idle capacity
- 3.23. Insurance and indemnification
- 3.24. Interest
- 3.25. Lobbying
- 3.26. Losses on other awards or contracts
- 3.27. Maintenance and repair costs
- 3.28. Material and supplies costs
- 3.29. Memberships, subscriptions and professional activity costs
- 3.30. Plant and homeland security costs
- 3.31. Pre-award costs
- 3.32. Professional service costs
- 3.33. Proposal costs
- 3.34. Publication and printing costs
- 3.35. Rearrangement and reconversion costs
- 3.36. Recruiting costs
- 3.37. Relocation costs
- 3.38. Rental costs of buildings and equipment
- 3.39. Scholarships and student aid costs
- 3.40. Selling and marketing
- 3.41. Specialized service facilities
- 3.42. Student activity costs
- 3.43. Taxes (including Value Added Tax)
- 3.44. Termination costs applicable to sponsored agreements
- 3.45. Training and education costs
- 3.46. Transportation costs
- 3.47. Travel costs
1. General Categories of Allowable Non-Allowable Costs
In the event of any questions or potential conflicts please contact your Program Coordinator for guidance.
- Involvement of parents, business, and labor in planning and operation
- Involvement of parents, business and labor in planning & operation
- Career guidance and academic counseling
- Work related experiences for both students and faculty
- Programs for special populations
- Education and business partnerships
- Secondary and Post-secondary linkages
- Mentoring and support services
- Upgrading equipment or adapting facilities required for equipment installation
- Job counseling and placement programs
- Non-traditional training and employment
- Insurance or maintenance on equipment purchased with grant money
- Personnel services that do not supplant
- Operating expenses that do not supplant
- Instructional materials that do not supplant
- Instructional equipment
Activities that support the following broad categories are not allowed at the local level.
- Student expenses or direct assistance to students
- Awards and memorabilia
- Individual memberships
- Memberships or anything related to lobbying
- Fines and penalties
- Expenses that supplant
- Audits except single audit
- Contributions and donations
- General Advertising
- General administration apart from program administration
Exception: Colleges may have plans targeting specific core indicators. Must obtain prior
approval from NCCCS.
2. Supplementing Versus Supplanting
In accordance with the Perkins Act of 2006, Section 311 (a), funds made available under the Act must supplement and not supplant non-federal funds expended to carry out CTE activities. In other words, federal Perkins funds may only be used in addition to funds already spent by the state and colleges on CTE, and cannot be used in place of non-Perkins funds.
- It will be presumed that supplanting has occurred where:
- NCCCS or one of the colleges uses Perkins funds to provide services that NCCCS or one of the colleges is required to make available under another federal, state, or local law; or
- NCCCS or one of the colleges uses Perkins funds to provide services that NCCCS or one of the colleges provided with non-Perkins funds in the prior year; or
- NCCCS or one of the colleges provides services for non-CTE students with non-federal funds, and provides the same services to CTE students using Perkins funds.
3. Specific Cost Guidance by Category
Items listed below provide principles to be applied in establishing the allowable or non-allowable
of certain items of cost. These principles apply whether a cost is treated as direct or indirect.
Failure to mention a particular item of cost in these sections is not intended to imply that it is either
allowable or non-unallowable; rather, determination of allowability in each case will be based on
the treatment or standards provided for similar or related items of cost.
Ref: 2 CFR Part 200, §200.420, “In case of a discrepancy between the provisions of a specific Federal award and the provisions below, the Federal award governs. Criteria outlines in §200.403 Factors affective allowability of costs must be applied determining allowability.
3.1. Advertising and public relations costs
Ref: 2 CFR Part 200, § 200.421.
The term advertising costs means the costs of advertising media and corollary administrative costs. Advertising media include magazines, newspapers, radio and television, direct mail, exhibits, electronic or computer transmittals, and the like. The term public relations includes community relations and means those activities dedicated to maintaining the image of the governmental unit or maintaining or promoting understanding and favorable relations with the community or public at large or any segment of the public. The only allowable advertising costs are those which are solely required for the performance of the Perkins program are program outreach and other specific purposes necessary to meet the requirements of the Federal award. (Ref 2 CFR Part 200, para 200.421).
The only allowable public relations costs required for the performance of the Perkins program are:
- Costs specifically required by Perkins;
of communicating with the public and press pertaining to specific activities or endeavors; or
- Costs of conducting general liaison with news media and government public relations
- All advertising and
public relations costs;
- Costs of meetings, conventions, convocations, or other events
related to other activities, including:
- Costs of displays, demonstrations, and exhibits;
- Costs of meeting rooms, hospitality suites, and other special facilities used in conjunction with shows and other special events; and
3.2. Advisory councils
Ref: 2 CFR Part 200, §200.422.
Costs incurred by advisory councils or
committees are allowable as a direct cost where authorized by the Federal awarding agency
or as an indirect cost where allocable to Federal awards. Request prior approval from your CTE Program Coordinator at NCCCS.
3.3. Alcoholic beveragesRef: 2 CFR Part 200, § 200.423.
Costs of alcoholic beverages are unallowable.
3.4. Alumni/ae activitiesRef: 2 CFR Part 200, §200.424.
Costs incurred for, or in support of, alumni/ae activities and similar services are unallowable.
3.5. Audit costs and related servicesRef: 2CFR Part 200, § 200.425.
Request prior approval from your CTE Program Coordinator.
3.6. Bad debtsRef: 2CFR Part 200, § 200.426.
Bad debts, including losses (whether actual or estimated) arising from uncollectable accounts and other claims, related collection costs, and related legal costs, are unallowable
3.7. Bonding costsRef: 2CFR Part 200, § 200.427.
Bonding costs arise when the Federal Government requires assurance against financial loss to itself or others by reason of the act or default of the institution. They arise also in instances where the institution requires similar assurance. Included are such bonds as bid, performance, payment, advance payment, infringement, and fidelity bonds. Costs of bonding required pursuant to the terms of the award are allowable. Costs of bonding required by the institution in the general conduct of its operations are allowable to the extent that such bonding is in accordance with sound business practice and the rates and premiums are reasonable under the circumstances
3.8. Commencement and convocation costsRef: 2CFR Part 200, § 200.429.
Costs incurred for commencements and convocations are unallowable.
3.9. Compensation for personal servicesSee 2 CFR Part 200, §400.430 and 431 for more information.
3.10. ConferencesRef 2 CFR Part 200, §400.432.
Conference hosts/sponsors must exercise discretion and judgment in ensuring that conference costs are appropriate, necessary and managed in a manner that minimizes costs to the Federal Award. The Federal awarding agency may authorize exceptions where appropriate for programs including Indian tribes, children, and the elderly. Request prior approval from your CTE Program Coordinator.
3.11. Contingency provisionsRef: 2CFR Part 200, § 200.433.
Contributions to a contingency reserve or any similar provision made for events the occurrence of which cannot be foretold with certainty as to time, intensity, or with an assurance of their happening, are unallowable, except as noted in the cost principles in this circular regarding self-insurance, pensions, severance and post-retirement health costs.
3.12. Legal Costs
Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringement.
Ref: 2CFR Part 200, § 200.435.
Definitions: "Conviction," as used herein,
means a judgment or conviction of a criminal offense by any court of competent jurisdiction,
whether entered upon verdict or a plea, including a conviction due to a plea of nolo
contendere. Costs, which may be allowable or unallowable under this section, including
directly associated costs, shall be segregated and accounted for by the institution separately.
Contact the Director of CTE at NCCCS prior to expending any
federal funds for defense or prosecution.
3.14. Donations and contributions
Ref: 2 CFR Part 200, §200.434.
Costs of contributions and
donations, including cash, property, and services, from the College to other entities, are
3.15. Employee health, and welfare costs and costs
2 CFR Part 200, para 200.437.
approval from your CTE Program Coordinator.
3.16. Entertainment costs
Ref: 2 CFR Part 200, §200.438.
Cost of entertainment, including
amusement, diversion, and social activities any associated costs are unallowable, except
where specific costs that might otherwise be considered entertainment have a programmatic
purpose and are authorized either in the approved budget for the Federal award. Request
prior approval from your CTE Program Coordinator.
3.17. Equipment and other capital expenditures
Ref 2 CFR Part 200, §200.439.
The following rules of allowability must apply to equipment and other capital expenditures:
expenditures for general purpose equipment, buildings, and land are unallowable as direct
charges, except with the prior written approval of the Federal awarding agency or pass-
- Capital expenditures for special purpose equipment are allowable as direct
costs, provided that items with a unit cost of $5,000 or more have the prior written approval of
the Federal awarding agency or pass-through entity.
- Capital expenditures for
improvements to land, buildings, or equipment which materially increase their value or useful
life are unallowable as a direct cost except with the prior written approval of the Federal
awarding agency, or pass-through entity. See §200.436 Depreciation, for rules on the
allowability of depreciation on buildings, capital improvements, and equipment. See also
§200.465 Rental costs of real property and equipment.
- When approved as a direct charge
pursuant to paragraphs (b)(1) through (3) of this section, capital expenditures will be charged
in the period in which the expenditure is incurred, or as otherwise determined appropriate and
negotiated with the Federal awarding agency.
- The unamortized portion of any equipment
written off as a result of a change in capitalization levels may be recovered by continuing to
claim the otherwise allowable depreciation on the equipment, or by amortizing the amount to
be written off over a period of years negotiated with the Federal cognizant agency for indirect
- Cost of equipment disposal. If the College is instructed by the Federal awarding
agency to otherwise dispose of or transfer the equipment the costs of such disposal or transfer
- Equipment and other capital expenditures are unallowable as indirect costs.
See §200.436 Depreciation.
The following rules of allowability apply to equipment and other capital expenditures:
- Capital expenditures for general purpose equipment, buildings, and
land are unallowable as direct charges, except where approved in advance by NCCCS.
- Capital expenditures for special purpose equipment are allowable as direct costs, provided
that items with a unit cost of $5000 or more have the prior approval of the awarding agency.
- Capital expenditures for improvements to land, buildings, or equipment which materially
increase their value or useful life are unallowable as a direct cost except with the prior
approval of the awarding agency.
- When approved as a direct charge pursuant to
subsections (1) through (3) above, capital expenditures will be charged in the period in which
the expenditure is incurred, or as otherwise determined appropriate by and negotiated with
the awarding agency.
- Equipment and other capital expenditures are unallowable as
3.18. Fines and penalties
Ref: 2 CFR Part 200, §200.441.
Costs resulting from violations of, or
failure of the institution to comply with, Federal, State, and local or foreign laws and regulations
are unallowable, except when incurred as a result of compliance with specific provisions of
the sponsored agreement, or instructions in writing from the authorized official of the
sponsoring agency authorizing in advance such payments.
3.19. Fund raising and investment management costsRef: 2 CFR Part 200, §200.442.
Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions, are unallowable. Costs of investment counsel and staff and similar expenses incurred solely to enhance income from investments are unallowable. Costs related to the physical custody and control of monies and securities are allowable
3.20. Gain and losses on depreciable assetsRef: 2 CFR Part 200, §200.443.
Gains and losses on the sale, retirement, or other disposition of depreciable property shall be included in the year in which they occur as credits or charges to the asset cost grouping(s) in which the property was included. The amount of the gain or loss to be included as a credit or charge to the appropriate asset cost grouping(s) shall be the difference between the amounts realized on the property and the un-depreciated basis of the property.
3.21. General cost to governmentRef 2 CFR Part 200 §200.444.
For states, local governments, and Indian Tribes, the general costs of government are unallowable (except as provided in §200.474 Travel costs).
Unallowable costs include:
- Salaries and expenses of the Office of
the Governor of a state or the chief executive of a local government or the chief executive of
an Indian tribe;
- Salaries and other expenses of a state legislature, tribal council, or similar
local governmental body, such as a county supervisor, city council, school board, etc., whether
incurred for purposes of legislation or executive direction;
- Costs of the judicial branch of a
- Costs of prosecutorial activities unless treated as a direct cost to a specific
program if authorized by statute or regulation (however, this does not preclude the allowability
of other legal activities of the Attorney General as described in §200.435 Defense and
prosecution of criminal and civil proceedings, claims, appeals and patent infringements); and
- Costs of other general types of government services normally provided to the general
public, such as fire and police, unless provided for as a direct cost under a program statute or
regulation. (b) For Indian tribes and Councils of Governments (COGs) (see §200.64 Local
government), up to 50% of salaries and expenses directly attributable to managing and
operating Federal programs by the chief executive and his or her staff can be included in the
indirect cost calculation without documentation.
3.22. Idle facilities and idle capacity
Ref: 2 CFR Part 200, §200.446.
Cost of idle facilities or idle
capacity means costs such as maintenance, repair, housing, rent, and other related costs,
e.g., insurance, interest, and depreciation. These costs could include the costs of idle public
safety emergency facilities, telecommunications, or information technology system capacity
that is built to withstand major fluctuations in load, e.g., consolidated data centers. The costs
of idle facilities are unallowable.
3.23. Insurance and indemnification
Ref: 2 CFR Part 200, §200.447.
Costs of insurance required
or approved, and maintained, pursuant to the sponsored agreement, are allowable. Costs of
other insurance maintained by the institution in connection with the general conduct of its
activities, are allowable subject to limitations. Request prior approval from your CTE Program Coordinator.
Ref: 2 CFR Part 200, §200.449.
Costs incurred for interest on borrowed capital,
temporary use of endowment funds, or the use of the College'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. Request prior approval from your CTE Program Coordinator.
3.25. LobbyingRef: 2 CFR Part 200, §200.450.
The cost of certain influencing activities associated with obtaining grants, contracts, cooperative agreements, or loans are unallowable.
3.26. Losses on other awards or contracts
Ref: 2 CFR Part 200, §200.451.
Any excess of costs
over income under any other sponsored agreement or contract of any nature is unallowable.
This includes, but is not limited to, the institution's contributed portion by reason of cost sharing
agreements or under recoveries via negotiation of flat amounts for F&A costs.
3.27. Maintenance and repair costs
Ref: 2 CFR Part 200, §200.452.
Costs incurred for necessary
maintenance, repair, or upkeep of buildings and equipment (including Federal property unless
otherwise provided for) which neither add to the permanent value of the property nor
appreciably prolong its intended life, but keep it in an efficient operating condition, are
allowable. Costs incurred for improvements which add to the permanent value of the buildings
and equipment or appreciably prolong their life shall be treated as capital expenditures.
Request prior approval from your CTE Program Coordinator.
3.28. Material and supplies costs
Ref: 2 CFR Part 200, §200.453.
Costs incurred for materials, supplies, and fabricated parts necessary to carry out a Federal award are allowable. Purchased materials and supplies must be charged at their actual prices, net of applicable credits. Withdrawals from general stores or stockrooms must be charged at their actual net cost under any recognized method of pricing inventory withdrawals, consistently applied. Incoming transportation charges are a proper part of materials and supplies costs.
Materials and supplies used for the performance of a Federal award may be charged as direct costs. In the specific case of computing devices, charging as direct costs is allowable for 35 devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award.
Where federally-donated or furnished materials are used in performing the
Federal award, such materials will be used without charge. Consumable supplies are
3.29. Memberships, subscriptions and professional activity costs
Ref: 2 CFR Part 200, §200.454.
Costs of the institution’s membership in business, technical, and professional organizations
are allowable. Costs of the institution’s subscriptions to business, professional, and technical
periodicals are allowable. Costs of membership in any civic or community organization are
unallowable. Costs of membership in any country club or social or dining club or organization
are unallowable. Costs of membership in organizations whose primary purpose is lobbying
3.30. Plant and homeland security costs
Ref: 2 CFR Part 200, §200.457.
reasonable expenses incurred for protection and security of facilities, personnel, and work
products are allowable. Such costs include, but are not limited to, wages and uniforms of
personnel engaged in security activities; equipment; barriers; protective (non-military) gear,
devices, and equipment; contractual security services; and consultants. Capital expenditures
for plant security purposes are subject to §200.439
3.31. Pre-award costs
Ref: 2 CFR Part 200, §200.458.
Costs incurred prior to the effective date
of the sponsored agreement, whether or not they would have been allowable if incurred after
such date, are unallowable unless approved by the Director of CTE at NCCCS.
3.32. Professional service costs
Ref: 2 CFR Part 200, §200.459.
Costs of professional and
consultant services rendered by persons who are members of a particular profession or
possess a special skill, and who are not officers or employees of the College, are allowable,
subject to limitations of this section. Request prior approval from your CTE Program Coordinator.
3.33. Proposal costs
2 CFR Part 200, §200.460.
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 College'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 College. No proposal costs of past accounting periods will be allocable to the current period. Request prior approval from your CTE Program Coordinator.
3.34. Publication and printing costs
Ref: 2 CFR Part 200, §200.461.
Publication costs for electronic and print media, including distribution, promotion, and general handling are allowable. If these costs are not identifiable with a particular cost objective, they should be allocated as indirect costs to all benefiting activities of the College.
Page charges for professional journal publications are allowable where:
- The publications report work
supported by the Federal Government; and
- The charges are levied impartially on all items
published by the journal, whether or not under a Federal award.
- The College may charge
the Federal award before closeout for the costs of publication or sharing of research results if
the costs are not incurred during the period of performance of the Federal award.
Page charges for professional journal publications are allowable as a necessary part of research costs where:
- The research papers report work supported by the Federal Government: and
- The charges are levied impartially on all research papers published by the journal, whether
or not by federally sponsored authors.
3.35. Rearrangement and reconversion costs
Ref: 2 CFR Part 200, §200.462.
Costs incurred for ordinary and normal rearrangement and alteration of facilities are allowable as indirect costs. Special arrangements and alterations costs incurred specifically for a Federal award are allowable as a direct cost with the prior approval of the Federal awarding agency or passthrough entity. Request prior approval from the Director of CTE at NCCCS.
3.36. Recruiting costs
Ref: 2 CFR Part 200, §200.462.
Subject to conditions of this reference, recruiting costs are allowable to the extent that such costs are incurred pursuant to the College's standard recruitment program. Where the College uses employment agencies, costs not in excess of standard commercial rates for such services are allowable. Obtain prior approval from NCCCS.
Special emoluments, fringe benefits, and salary allowances incurred to attract professional personnel that do not meet the test of reasonableness or do not conform with the established practices of the College, are unallowable.
Where relocation costs incurred incident to recruitment of a new employee have been funded in whole or in part to a Federal award, and the newly hired employee resigns for reasons within the employee's control within 12 months after hire, the College will be required to refund or credit the Federal share of such relocation costs to the Federal Government. See also §200.464 Relocation costs of employees.
Short-term, travel visa costs (as opposed to longer-term, immigration visas) are generally allowable expenses that may be proposed as a direct cost. Since short-term visas are issued for a specific period and purpose, they can be clearly identified as directly connected to work performed on a Federal award. For these costs to be directly charged to a Federal award, they must:
- Be critical and necessary for the conduct
of the project;
- Be allowable under the applicable cost principles;
- Be consistent with the
College's cost accounting practices and College policy; and
- Meet the definition of “direct cost” as described in the applicable cost principles.
- Request prior approval from the Director
of CTE at NCCCS.
3.37. Relocation costs
Ref: 2 CFR Part 200, §200.464.
3.38. Rental costs of buildings and equipment
Ref: 2 CFR Part 200, §200.465.
Subject to the limitations described in paragraphs (b) through (d) of this section, rental costs are allowable to the extent that the rates are reasonable in light of such factors as: rental costs of comparable property, if any; market conditions in the area; alternatives available; and the type, life expectancy, condition, and value of the property leased.
Rental arrangements should be reviewed periodically to determine if circumstances have changed and other options are available.
Rental costs under “sale and lease back” arrangements are allowable only up to the amount that would be allowed had the College continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes, and insurance.
Rental costs under “less-than-arm's-length” leases are allowable only up to the amount (as explained in paragraph (b) of this section). For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement is able to control or substantially influence the actions of the other. Such leases include, but are not limited to those between: (1) Divisions of the College; (2) The College under common control through common officers, directors, or members; and (3) The College and a director, trustee, officer, or key employee of the College or an immediate family member, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest. For example, the College may establish a separate corporation for the sole purpose of owning property and leasing it back to the College. Obtain prior approval from NCCCS.
Rental costs under leases which are required to be treated as capital leases under GAAP are allowable only up to the amount (as explained in paragraph (b) of this section) that would be allowed had the College purchased the property on the date the lease agreement was executed. The provisions of GAAP must be used to determine whether a lease is a capital lease. Interest costs related to capital leases are allowable to the extent they meet the criteria in §200.449 Interest. Unallowable costs include amounts paid for profit, management fees, and taxes that would not have been incurred had the College purchased the property.
The rental of any property owned by any
individuals or entities affiliated with the College, to include commercial or residential real
estate, for purposes such as the home office workspace is unallowable.
3.39. Scholarships and student aid costs
Ref: 2 CFR Part 200, §200.466.
Costs of scholarships,
fellowships, and other programs of student aid are allowable only when the purpose of the sponsored agreement is to provide training to selected participants. Request prior approval
from your CTE Program Coordinator.
3.40. Selling and marketing
Ref: 2 CFR Part 200, §200.467.
Costs of selling and marketing any
products or services of the College (unless allowed under §200.421 Advertising and public
relations.) are unallowable, except as direct costs, with prior approval by the Federal
awarding agency when necessary for the performance of the Federal award
3.41. Specialized service facilities
Ref: 2 CFR Part 200, §200.468.
The costs of services provided by highly complex or specialized facilities operated by the College, such as computing facilities, wind tunnels, and reactors are allowable, provided the charges for the services meet the conditions of either paragraphs (b) or (c) of this section, and, in addition, take into account any items of income or Federal financing that qualify as applicable credits under §200.406 Applicable credits.
The costs of such services, when material, must be charged directly to applicable awards based on actual usage of the services on the basis of a schedule of rates or established methodology that:
- Does not discriminate between activities under Federal
awards and other activities of the College, including usage by the College for internal
- Is designed to recover only the aggregate costs of the services. The costs of each service must consist normally of both its direct costs and its allocable share of all indirect (F&A) costs. Rates must be adjusted at least biennially, and must take into consideration over/under applied costs of the previous period(s).
extraordinary circumstances, where it is in the best interest of the Federal Government and
the College to establish alternative costing arrangements, such arrangements may be worked
out with the Federal cognizant agency for indirect costs.
3.42. Student activity costs
Ref 2 CFR Part 200, § 200.469.
Costs incurred for intramural activities,
student publications, student clubs, and other student activities, are unallowable, unless
specifically provided for in the sponsored agreements. Request prior approval from your CTE Program Coordinator.
3.43. Taxes (including Value Added Tax)
Ref: 2 CFR Part 200, §200.470.
For states, local governments and Indian tribes:
- 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.
- Gasoline taxes,
motor vehicle fees, and other taxes that are in effect user fees for benefits provided to the
Federal Government are allowable.
- 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.
- In general, taxes which the College 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
College directly or which are available to the College 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.
- Any refund of taxes, and
any payment to the College 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 College 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 College has been
reimbursed by the Federal Government for the taxes, interest, and penalties. (c) Value Added
Tax (VAT) foreign taxes charged for the purchase of goods or services that a College is legally
required to pay in country is an allowable expense under Federal awards. Foreign tax refunds
or applicable credits under Federal awards refer to receipts, or reduction of expenditures,
which operate to offset or reduce expense items that are allocable to Federal awards as direct
or indirect costs. To the extent that such credits accrued or received by the College relate to
allowable cost, these costs must be credited to the Federal awarding agency either as costs
or cash refunds. If the costs are credited back to the Federal award, the College may reduce
the Federal share of costs by the amount of the foreign tax reimbursement, or where Federal
award has not expired, use the foreign government tax refund for approved activities under
the Federal award with prior approval of the Federal awarding agency.
3.44. Termination costs applicable to sponsored agreements
Ref: § 200.471.
Termination of a
Federal award generally gives rise to the incurrence of costs, or the need for special treatment
of costs, which would not have arisen had the Federal award not been terminated. Cost
principles covering these items are set forth in this section. They are to be used in conjunction
with the other provisions of this part in termination situations. Cost principles covering these
items are generally allowable.
3.45. Training and education costs
Ref: 2 CFR Part 200, §200.472.
The cost of training and
education provided for employee development is allowable.
3.46. Transportation costs
Ref: 2 CFR Part 200, § 200.473
Costs incurred for freight, express,
cartage, postage, and other transportation services relating either to goods purchased, in
process, or delivered, are allowable. When such costs can readily be identified with the items
involved, they may be charged directly as transportation costs or added to the cost of such
items. Where identification with the materials received cannot readily be made, inbound
transportation cost may be charged to the appropriate indirect (F&A) cost accounts if the
college follows a consistent, equitable procedure in this respect. Outbound freight, if
reimbursable under the terms and conditions of the Federal award, should be treated as a
3.47. Travel costs
Ref: 2 CFR Part 200, § 200.474.
Travel costs are the expenses for
transportation, lodging, subsistence, and related items incurred by employees who are in
travel status on official business in support of Perkins activities are allowable as budgeted.
Must follow state guidelines.