OMB Circular A-21 defines the factors affecting allowability of costs. Under these principle costs must be: - REASONABLE: A cost may be considered reasonable if the nature of the goods or services and the amount of cost involved reflect the action that a prudent person would have taken under the circumstances prevailing at the time the decision to incur the cost was made.
- ALLOCABLE to the particular sponsored agreement: A cost is allocable to a sponsored project if (1) it is incurred solely to advance the work under the sponsored agreement; or (2) it benefits both the sponsored project and other work of the institution in proportions that can be approximated through use of reasonable methods.
- GIVEN CONSISTENT TREATMENT throughout the institution.
- COMPLIANT with any limitations or exclusions set forth in applicable federal regulations and the particular sponsored agreement’s terms and conditions.
NIH Grants Policy on allowability of costs/activities NIH reference on allowability of selected items of cost Clerical/Administrative Salaries on Sponsored Projects
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