Post Award – Financial

A cost may be considered reasonable if the nature and amount of the cost reflect actions that a prudent person would have taken under circumstances prevailing at the time. Among other factors, a reasonable cost is one generally recognized as necessary for the operation of the university or the performance of the sponsored project and is consistent with established institutional policies and practices applicable to the work of the institution generally, including sponsored projects. 

A cost is allocable to a sponsored project if it is incurred specifically to advance the work under the sponsored project. When a cost benefits both the sponsored project and other activities of the university, charges to the project should be based on reasonable estimates of the benefit to each activity (also referred to as cost allocation).
See Cost Allocation for more information.

Unallowable costs are those that are not eligible for reimbursement by the sponsor. Below is a list of costs normally considered unallowable under Uniform Guidance. Costs that are not allowed under University policy are also not allowed on sponsored awards.

Advertising: only allowable when solely related to the project. See Uniform Guidance section 200.421  for the only allowable costs.

Alcoholic beverages: unallowable

Commencement and convocation cost: unallowable

Entertainment: unallowable except for specific costs which have a programmatic purpose and are authorized either in the approved budget for the award or with prior written approval.

Fundraising, lobbying, and public relations costs: unallowable

Fines and penalties and defense of fraud proceeding, including insurance against defects in University’s materials or workmanship: Fines, penalties, damages, and other settlements resulting from violations of, or failure to comply with, Federal, State, and local laws and regulations are unallowable except when incurred because of compliance with specific provisions of the award or written approval by the sponsor.

Memorabilia or promotional material: The only allowable expenses for memorabilia, promotional materials, or public relations costs are those required for the award's performance.

Moving or relocation costs if employee resigns within 12 months: Relocation costs on federal awards must follow the standards in the Uniform Guidance section 200.464 Relocation costs of employees.

Certain travel costs: Travel costs should be reasonable and in compliance with university policy. On federal awards the Fly America Act applies. The Fly America Act requires that foreign air travel funded with federal dollars be performed on U.S. flag air carriers, unless an exception is made.

Cash donations to other organizations including universities: unallowable

Goods or services for employee personal use: unallowable

Membership costs: These are costs in community organizations, country clubs, or social or dining clubs and are unallowable. Costs of memberships in organizations whose primary purpose is lobbying are unallowable. Membership and subscription costs related to the performance of the award and conference registrations are allowable.

Publication, documentation and dissemination: Costs of documenting, preparing, publishing, disseminating, and sharing research findings and supporting material are allowable. Page charges for scientific and engineering journal publications are allowable when the research papers report work supported by the grant and the charges are levied impartially on all research papers published by the journal, whether by non-government or government sponsored authors.

Selling and marketing costs: These costs are unallowable except when approved by the awarding agency and necessary for the performance of the award.

Severance costs: Costs are allowable for severance pay only when the pay is required by university policy.

See SPA Policy Identification and Treatment of Unallowable Costs on Sponsored Awards for more information.

Indirect Costs are costs incurred for a common or joint purpose benefitting more than one cost objective. Such costs cannot be readily assigned to a single project or function.

Indirect Costs cover real infrastructure expenses that the University incurs to support research and sponsored programs. Examples of indirect costs include building depreciation, maintenance, electricity and heat, accounting services, personnel services, department administration, research administration, and purchasing.

In unexpected or extraordinary 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.  Such a cost will be considered allowable if it satisfies the requirements for direct costs and is sufficiently documented.  All costs charged to grants under these circumstances should be treated consistently, no matter the funding source.

Unexpected circumstances may also include allowing a cost that is typically treated as an indirect cost as a direct cost on a sponsored award.  See Unlike Circumstances: Budget Direct Costs Normally Classified as Indirect Costs for more information.