The principles of OMB UG govern costs that may be charged either directly or indirectly to the government by Institutes of Higher Education (IHE’s).
The Uniform Administrative Requirements describe the costs that are eligible for reimbursement under federal grants and contracts (allowable costs), and the costs that are not eligible for reimbursement (unallowable costs). Refer to the Cost Principles in Subpart E, §200.400-200.475 of the Uniform Guidance for the full listing of types of costs.
In general, there are three categories of expenses:
- Direct Expenses – These expenses can normally be directly charged to federal awards. However, the terms and conditions of the sponsored award must be reviewed prior to determining the appropriateness of expenses for each individual project.
- Indirect Expenses- Sometimes referred to as facilities and administrative (F&A) costs or overhead, these expenses may not be charged as direct expenses to federal awards unless the costs meet the “unlike purpose and circumstances criteria” further defined in this document.
- Unallowable expenses- These costs may not be charged to a federal award either as a direct charge or indirectly as recovered through the F&A rate.
In addition to following grant-specific guidelines, recipients of grant funding are also expected to comply with established University policies and procedures.
Subpart E of the Uniform Guidance – Cost Principles
Subpart E of the UG - Cost principles provides a detailed listing of items that are typically allowable and unallowable. Examples of costs normally considered unallowable include:
- Advertising and public relations
- Alcoholic beverages
- Bad Debt
- Convocations or other events related to instruction
- Entertainment
- Fines and penalties
- Fully depreciated assets
- Housing and personal living expenses
- Legal cost
- Lobbying
- Royalties or patents