Allowable Costs

2014 YouthBuild Webinar Series

Topics of the session:

Definition and Sources

Types of costs

Selected items of costs

What are Cost Principles?

• Set of government-wide rules

• Applicable to all Federal grants

• Define conditions for charging costs– Allowable & unallowable costs– Direct , Shared & Indirect costs– Descriptions

What are Cost Principles?

Principles also discuss time distribution and allocation of

personnel services

Cost Principles

• 2 CFR 225 - OMB Circular A-87 State/Local/Indian Tribes

• 2 CFR 230 - OMB Circular A-122 Non-Profit Organizations

• 2 CFR 215 - OMB Circular A-21 Educational Institutions

• 48 CFR Part 31 Commercial Organizations

Cost Principles

Educational

Institutions

States, Local Governments

& Indian Tribes

Non-Profit

Organizations

Commercial

Organizations

COST

PRINCIPLESOMB A-212 CFR Part 215 & 220

OMB A-872 CFR Part 225

OMB A-1222 CFR Part 230

48 CFR 31

UNIFORM ADMINISTRATIVE REQUIREMENTS

DOL REGULATIONS

OMB A-110 2 CFR Part 215

29 CFR 95

OMB A-102

29 CFR 97

Common Rule

OMB A-110

29 CFR 95

29 CFR 95

AUDIT

REQUIREMENTSOMB A- 133 OMB A-133 OMB A-133 29 CFR 96

Other Regulations

• Uniform Administrative Standards — 29 CFR 95 and 97— 29 CFR 95

• WIA Regulations• 20 CFR 672 YouthBuild• Grant Agreement • SGA (Solicitation Grants Application)• Employment Training and Guidance Letters

Standards for allowability of costs

• Found in circulars and Federal regulations• Apply to all costs charged to Federal funds

Cost must be reasonable, necessary, allocable and

to the benefit of the grant

Standards for allowability of costs

• Reasonable & Necessary– “proper & efficient”– “prudent person theory”

• Allocable– Clearly benefit program– Both direct & indirect costs

Standards for allowability of costs

• Consistent with GAAP• Consistent with the rules • Consistent treatment across time• Cannot be used as match • Documented and traceable

Program regulations may have prohibited costs

20 CFR 668.340-35020 CFR 667.260-268

Types of costs

Allowable

Outreach Training Costs

Stipends Incentives for

youth

Unallowable

Entertainment Losses

Fines and Penalties

Contingency Reserves

Allowable with

conditions

Memberships Pre award

Costs Interest costs

Types of costs

• If prior approval requirement exists− Before incurring cost

− Must be requested in writing− Must be approved

• Approval requests to Grant Officer

• Youthbuild allowable costs exceptions – TEGL 5-10 and 20 CFR 672.525– Tools– Portions of Acquiring Location for Training– Construction Costs

Selected items of costs

Selected items of costs

• Payments to participants engaged in work and non–work related YouthBuild activities.

• Costs of Needs Based stipends

• Cost of supportive services

• Cost for exiters receiving Follow-up services.

300 baseball game tickets to giveaway at job

fair?

Entity paid for settlement on

wrongful termination law

suit

Are tattoo removals

allowable?

Question

Training Resources

For additional training:

http://etareporting.workforce3one.org

For the Indirect cost determination guide:

http://www.dol.gov/oasam/programs/boc/costdeterminationguide/cdg.pdf