Unallowable Costs

All costs proposed or incurred on a sponsored project must comply with the terms and conditions of the sponsored award in determining costs that are allowable or unallowable. At no time should unallowable costs be charged to a sponsored project.

Per Section 200.403 of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:

  • Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
  •  Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
  •  Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.
  •  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.
  •  Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.
  •  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. See also §200.306 Cost sharing or matching paragraph (b).
  •  Be adequately documented. See also §§200.300 Statutory and national policy requirements through 200.309 Period of performance.

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

Expenditure Guidelines for Costs not Allowable under OMB Circular A-21 (FNG05)

Unallowable Cost Provisions (FNG05-b)