Applies to:	Original Policy Date:	Date of Last Review:	Approved by:
Faculty, Staff and Students	January 19, 2018	March 3, 2022 August 2024	Dr. John Nicklow, President

Policy Owner: The Office of Sponsored Programs

Policy Purpose

To comply with Code of Federal Regulations Title 2: Grants and Agreements Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) regarding costs that are identified as unallowable by the federal government.

Policy Scope

This policy applies to all students, faculty, and staff having the authority, as granted by the Principal Investigator, to charge allowable costs to a sponsored project (grant, contract, or subaward).

Policy Statement

An unallowable cost may not be charged directly or indirectly to any federal grant or contract.

Procedures/Guidelines

All allowable costs under university policy must be charged to the appropriate accounting string associated with a sponsored project. The PI is responsible for ensuring allowable costs are charged accordingly.

Unallowable costs are defined as costs that cannot be charged to the Federal Government as a direct cost or indirect cost. In the event that unallowable costs are charged to a sponsor, those costs will be transferred to the home department of the Principal Investigator (PI).

The following costs are examples of unallowable on federal grants and contracts unless specifically approved by the funding agency.  For a complete list see General Provisions for Selected Items of Cost:

• Advertising
• Airfare travel costs in excess of the lowest available option
• Alcoholic beverages
• Alumni activities
• Automobile costs for personal use
• Bad debt expense
• Commencement and convocation costs
• Contingency provisions
• Debt service
• Defense and prosecution of criminal and civil proceedings, claims, appeals, patent infringement
• Depreciation reserve costs
• Donations and/or contributions
• Entertainment (includes amusement and social activities)
• Fines and penalties (including late fees)
• Food costs (except when traveling and abiding by University policy).
• Fund raising
• Goods and services for personal use, including housing and personal living expenses
• Institution furnished automobile costs for personal use
• Insurance costs to protect against defects and medical liability (malpractice) insurance
• Interest
• Investment management
• Lobbying
• Local civil defense project costs not on institution's premises
• Losses on other sponsored agreements or contracts
• Membership, subscriptions and professional activity costs
• Patent costs
• Pre-contract costs
• Public relations
• Relocation costs
• Selling and marketing
• Student activity costs

Definitions

Unallowable cost: Expenses incurred by the University, which are not reimbursable by Federal Government either as direct or indirect cost.

Compliance Reference

Federal Office of Management and Budget (OMB) Guidance 2 CFR Part 200

Responsibilities

Faculty are required to review this policy upon receiving each new grant.
The following steps focus on unallowable expenditures being charged to a grant.

1. Principal Investigators should familiarize themselves with the grant’s terms and conditions as well as the agency’s allowable cost policies and contact OSP with any questions on allowable costs.
2. Principal Investigators and administrative staff monitor the grant budget to ensure funds are available to cover expenditures. This includes knowledge of whether the grant’s budget is line specific, and funds are budgeted for the appropriate expenses, the charge is allowable, and whether the charge is within the period of performance of the grant.
3. Sponsored Programs monitors all expenditures submitted to be charged to the grant.
   • The PI and/or administrative staff is contacted if a charge is questionable.
   • The PI works with Sponsored Programs in resolving whether the cost is allowable.
   • For unallowable charges, the PI and their administrative staff will work with Sponsored Programs to remove the unallowable charges.
   The PI is responsible for reviewing all charges to the grant inclusive of those expensed on a P-card.

Enforcement

Failure to comply with unallowable cost policy may result in financial penalties, expense disallowances, and damage to Florida Tech’s reputation.