Federal Awards: Allowable Costs

1.0    Purpose

This policy establishes guidelines for determining allowable cost for federal awards.

2.0    Revision History

3.0    Persons Affected

3.1    Project manager or principal investigator and project staff of a program supported by a federal award

3.2    Casper College Financial and Accounting Management employees

4.0    Policy

The policy of Casper College is to ensure the following.

4.1    The college complies with federal regulations and requirements regarding determining allowable cost for federal awards.

4.2    The college receives funding due per the award agreement.

5.0    Definitions

5.1    Federal Award. Federal funding provided to support a specified project or goals. The award can be in the form of a grant, contract, cooperative agreement, or pass through federal funding from another entity.

5.2    Uniform Grant Guidance (UGG). A governmental-wide framework for grants management. An authoritative set of rules and requirements for federal awards that synthesizes and supersedes guidance from earlier Office and Management Budget circulars.

6.0    Responsibilities

6.1    The project manager or primary investigator, project staff, and the associate controller are responsible for scrutinizing costs to determine if they are allowable under the award agreement.

6.2    The vice president of administrative services is responsible for maintaining compliance with this policy.

7.0    Procedures

7.1    The project manager or principal investigator and project staff scrutinize costs to ensure they are allowable under the award agreement. They consider the following factors when determining if a cost is allowable. The costs must:

7.1.1    Be necessary, reasonable, and allocable to the federal award;

7.1.2    Comply with the limitations of the award agreement and other applicable sponsor requirements, and federal and state laws and regulations;

7.1.3    Be consistent with the policies and procedures the college would apply to all activities of the college;

7.1.4    Be accounted for consistently and in accordance with generally accepted accounting principles (GAAP);

7.1.5    Not be included in a cost or used to meet cost sharing or matching requirements of any other award in either the current or prior period, except when allowed by the awarding agency or by law or regulation;

7.1.6    Be adequately documented; and

7.1.7    Be net of all applicable credits.

A cost is reasonable if, in its nature and amount, it does not exceed that which a prudent person would incur under the prevailing circumstances at the time the decision was made to incur the cost. Consideration must be given to:

7.1.8    Whether the cost incurred would be generally recognized as ordinary and necessary for the proper and efficient performance of the program.

7.1.9    Whether the federal award application identified the cost and the cost was approved in the budget or budget amendment and the college received written approval for the cost from the awarding agency.

7.1.10    Market prices for comparable goods or services for the geographic area.

7.1.11    Whether the individuals incurring the cost acted with prudence in the circumstances considering their responsibilities to the awarding agency, the college, populations served, and the public at large.

7.1.12    Whether there was significant deviation from the college’s established policies and procedures.

7.2    The associate controller scrutinizes the costs when they are submitted for payment to ensure that they are allowable under the award agreement. The associate controller will notify the project manager or principal investigator of any questionable costs and determine the appropriate budget to allocate the cost.