Quick Tips for Determining Cost Allowability
Answer the following questions:
- Was this item budgeted in my proposal and included in the award by the funding agency?
- Is this item/expenditure necessary for the completion of the project? Is the cost reasonable?
- Is there a clear benefit to the project? Is the cost allocable?
- How do we classify this expense for other projects (direct vs. indirect)? Is the cost consistently treated?
Computers are generally used for various activities such as instruction, research, administration, email and personal use. It is important to ensure their allowability and allocability as a direct cost to sponsored programs. The federal government is sensitive to computer purchases on federal awards. Thus computer purchases must be justified adequately and documented when charged to federal projects. Computers are viewed as “general use” business items and should not be charged directly to a federal award unless justified for a specific research/sponsored program purpose. Please use the quick reference guide for additional information.
Also, when computers are allowable and allocable to a sponsored program a budget justification is required and should describe why the computer is essential to the project. Please use the quick reference guide on budget justifications for additional information.
Questions? Please feel free to contact your Post Award Manager. We are here to help
Supplies and equipment purchased on grants sometimes benefit more than one project. If the costs benefits two or more projects in proportion that can easily be determined, the cost should be allocated to the projects based on the proportional benefit.
For example, imagine that you purchased one pound of sodium peroxide and that one half will be used for project A and one half will be used for project B. In this case, you should charge 50% of the cost to project A and 50% of the cost to project B.
If the cost benefits two or more projects in proportions that cannot be easily identified, please contact your post award manager to discuss options for allocating the expenses.