{"id":2164,"date":"2022-08-02T14:21:29","date_gmt":"2022-08-02T18:21:29","guid":{"rendered":"https:\/\/research.ncsu.edu\/administration\/?page_id=2164"},"modified":"2022-11-08T10:48:56","modified_gmt":"2022-11-08T15:48:56","slug":"allowable-vs-unallowable-costs","status":"publish","type":"page","link":"https:\/\/research.ncsu.edu\/administration\/compliance\/fiscal-compliance\/allowable-vs-unallowable-costs\/","title":{"rendered":"Allowable vs. Unallowable Costs"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Allowable Costs<\/h2>\n\n\n\n<p>An allowable cost is a cost that can be paid by your contract or grant. A cost is allowable only if:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The cost is&nbsp;reasonable;&nbsp;it reflects what a prudent person might pay.<\/li><li>The cost is&nbsp;allocable;&nbsp;the contract or grant that paid the expense benefits from it. For a cost to be allocable, it must meet one of the following criteria:<ul><li>It is incurred solely to advance the work under the sponsored agreement.<\/li><li>It benefits the sponsored agreement and the work of the institution, in proportions that can be approximated through the use of reasonable methods.<\/li><li>It is necessary to the overall operation of the institution and is deemed to be assignable in part to sponsored projects.<\/li><\/ul><\/li><li>The accounting treatment of the cost is&nbsp;consistent&nbsp;across the campus.<\/li><li>The cost is&nbsp;allowable&nbsp;as defined by the OMB Uniform Guidance (UG) and\/ or by the terms of the particular award.<\/li><\/ul>\n\n\n\n<p>These requirements pertain to costs associated with developing a proposal, recording in the university accounting system or reporting on a financial report.<a><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Exceptional Circumstances<\/h2>\n\n\n\n<p>In exceptional circumstances, a sponsoring agency may direct a normally unallowable cost to be considered a direct cost for a specific program if the inherent purpose of the program requires it. This cost will be considered allowable if it satisfies the requirements for direct costs and is sufficiently documented.<a><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Unallowable Costs<\/h2>\n\n\n\n<p>An unallowable cost is a cost that cannot be paid by your contract or grant. Such costs may be expressly prohibited by the UG or may be considered unallowable as a result of campus policy or by mutual agreement with a governmental agency. NC State University has the responsibility to identify such costs and exclude them from any billing, claim or award proposal.<a><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Other Cost Guidelines<\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Any expense that is not considered recoverable under a federal sponsored agreement may not be charged to other federal sponsored agreements.<\/li><li>A sponsoring agency may state that certain costs are not reimbursable even though they are considered allowable by federal regulations. These costs are unallowable and must be excluded from billing.<\/li><li>Costs incurred in support of a specific agreement that are non-reimbursable may constitute\u00a0<a href=\"https:\/\/research.ncsu.edu\/administration\/compliance\/fiscal-compliance\/cost-sharing\/\" data-type=\"page\" data-id=\"2172\">cost sharing<\/a>.<\/li><\/ul>\n\n\n\n<p><a><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Subpart E of the Uniform Guidance (UG)<\/h2>\n\n\n\n<p>Subpart E of the UG \u2013 Cost Principles provides a detailed listing of items that are typically allowable and unallowable. Examples of costs normally considered unallowable include:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Advertising and public relations<\/li><li>Alcoholic beverages<\/li><li>Convocations or other events related to instruction<\/li><li>Donations<\/li><li>Entertainment<\/li><li>Fines and penalties<\/li><li>Fully depreciated assets or assets gifted by the federal government<\/li><li>General purpose equipment, buildings, and land<\/li><li>Housing and personal living expenses<\/li><li>Insurance and indemnification<\/li><li>Legal costs<\/li><li>Lobbying<\/li><li>Memberships in any civic or community organization<\/li><li>Royalties or patents<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Allowable Costs An allowable cost is a cost that can be paid by your contract or grant. A cost is allowable only if: The cost is&nbsp;reasonable;&nbsp;it reflects what a prudent&hellip;<\/p>\n","protected":false},"author":16,"featured_media":0,"parent":53,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"source":"","ncst_custom_author":"","ncst_show_custom_author":false,"ncst_dynamicHeaderBlockName":"ncst\/default-header","ncst_dynamicHeaderData":"{}","ncst_content_audit_freq":"","ncst_content_audit_date":"","ncst_content_audit_display":false,"ncst_backToTopFlag":"","footnotes":""},"tags":[],"class_list":["post-2164","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Allowable vs. Unallowable Costs - Research Administration and Compliance<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/research.ncsu.edu\/administration\/compliance\/fiscal-compliance\/allowable-vs-unallowable-costs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Allowable vs. Unallowable Costs - Research Administration and Compliance\" \/>\n<meta property=\"og:description\" content=\"Allowable Costs An allowable cost is a cost that can be paid by your contract or grant. 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