Quick Answer: Are Unallowable Costs Illegal?

Is Grant writing an allowable cost?

Grant writing and reporting costs that are required as part of the terms of the Award are allowable.

For example, progress reports, annual reports, and/or technical reports are required and therefore, would be allowable.

Proposal costs, however, would not be an allowable expense.

See the FAQ on Proposal Costs..

What is a reasonable cost?

Reasonable cost is a price that is consistent with what a reasonable person would pay in the same or similar circumstances for the same business or for the same or similar item.

Are costs allocable?

A cost is allocable to a particular Award if the goods or services involved can be directly charged to the Award based on the benefit provided.

What is a fair and reasonable price?

Price that a prudent buyer would pay considering market conditions, requirements alternatives, and non-price factors. Requires a great deal of judgment of the data or resources obtained by the CO.

What is a fair price?

Definitions of fair price (of a good or a service) a good price that is acceptable to both the buyer and the seller, often one that reflects the current market value. “Fair Price means the open market value of the relevant A Shares between a willing seller and a willing third party buyer.”

What are unallowable costs?

1. Unallowable Costs. Costs are defined as allowable or unallowable for reimbursement by the government. The federal government asserts that federal funds may not be used to pay unallowable expenses. Unallowable expenses may NOT be charged either directly or indirectly to the federal government.

What are expressly unallowable costs?

Under the FAR and Cost Accounting Standards (CAS), “expressly unallowable costs” are “a particular item or type of cost which, under the express provisions of an applicable law, regulation, or contract, is specifically named and stated to be unallowable.” FAR 31.001; 48 CFR § 9904.405-30 (CAS 405) (emphasis added).

Are unallowable costs included in G&A base?

With all things equal the preferred allocation base is the Total Cost Input base. This is defined as all costs less G&A expense or stated another way, direct costs, fringe, overhead and unallowable direct and overhead costs.

How do you determine when a cost is allowable?

(a) A cost is allowable only when the cost complies with all of the following requirements: (1) Reasonableness. (2) Allocability. (3) Standards promulgated by the CAS Board, if applicable, otherwise, generally accepted accounting principles and practices appropriate to the circumstances.