|
51914 Federal Register /Vol. 70, No. 168 /Wednesday, August 31, 2005 /Rules and Regulations
<br />assets and substantial relocation of
<br />Federal programs
<br />19. General government expenses
<br />20. Goods or services for personal use
<br />21. Idle facilities and idle capacity
<br />22. Insurance and indemnification
<br />23. Interest
<br />24. Lobbying
<br />25. Maintenance, operations, and repairs
<br />26. Materials and supplies costs
<br />27. Meetings and conferences
<br />28. Memberships, subscriptions, and
<br />professional activity costs
<br />29. Patent costs
<br />30. Plant and homeland security costs
<br />31. Pre -award costs
<br />32. Professional service costs
<br />33. Proposal costs
<br />34. Publication and printing costs
<br />35. Rearrangement and alteration costs
<br />36. Reconversion costs
<br />37. Rental costs of building and equipment
<br />38. Royalties and other costs for the use of
<br />patents
<br />39. Selling and marketing
<br />40. Taxes
<br />41. Termination costs applicable to
<br />sponsored agreements
<br />42. Training costs
<br />43. Travel costs
<br />Sections 1 through 43 provide principles to
<br />be applied in establishing the allowability or
<br />unallowability of certain items of cost. These
<br />principles apply whether a cost is treated as
<br />direct or indirect. A cost is allowable for
<br />Federal reimbursement only to the extent of
<br />benefits received by Federal awards and its
<br />conformance with the general policies and
<br />principles stated in Appendix A to this part.
<br />Failure to mention a particular item of cost
<br />in these sections is not intended to imply
<br />that it is either allowable or unallowable;
<br />rather, determination of allowability in each
<br />case should be based on the treatment or
<br />standards provided for similar or related
<br />items of cost.
<br />1. Advertising and public relations costs.
<br />a. The term advertising costs means the
<br />costs of advertising media and corollary
<br />administrative costs. Advertising media
<br />include magazines, newspapers, radio and
<br />television, direct mail, exhibits, electronic or
<br />computer transmittals, and the like.
<br />b. The term public relations includes
<br />community relations and means those
<br />activities dedicated to maintaining the image
<br />of the governmental unit or maintaining or
<br />promoting understanding and favorable
<br />relations with the community or public at
<br />large or any segment of the public.
<br />c. The only allowable advertising costs are
<br />those which are solely for:
<br />(1) The recruitment of personnel required
<br />for the performance by the governmental unit
<br />of obligations arising under a Federal award;
<br />(2) The procurement of goods and services
<br />for the performance of a Federal award;
<br />(3) The disposal of scrap or surplus
<br />materials acquired in the performance of a
<br />Federal award except when governmental
<br />units are reimbursed for disposal costs at a
<br />predetermined amount; or
<br />(4) Other specific purposes necessary to
<br />meet the requirements of the Federal award.
<br />d. The only allowable public relations
<br />costs are:
<br />(1) Costs specifically required by the
<br />Federal award;
<br />. (2) Costs of communicating with the public
<br />and press pertaining to specific activities or
<br />accomplishments which result from
<br />performance of Federal awards (these costs
<br />are considered necessary as part of the
<br />outreach effort for the Federal award); or
<br />(3) Costs of conducting general liaison with
<br />news media and government public relations
<br />officers, to the extent that such activities are
<br />limited to communication and liaison
<br />necessary keep the public informed on
<br />matters of public concern, such as notices of
<br />Federal contract /grant awards, financial
<br />matters, etc.
<br />e. Costs identified in subsections c and d
<br />if incurred for more than one Federal award
<br />or for both sponsored work and other work
<br />of the governmental unit, are allowable to the
<br />extent that the principles in Appendix A to
<br />this part, sections E. ( "Direct Costs ") and F.
<br />( "Indirect Costs ") are observed.
<br />f. Unallowable advertising and public
<br />relations costs include the following:
<br />(1) All advertising and public relations
<br />costs other than as specified in subsections
<br />1.c, d, and e of this appendix;
<br />(2) Costs of meetings, conventions,
<br />convocations, or other events related to other
<br />activities of the governmental unit,
<br />including:
<br />(a) Costs of displays, demonstrations, and
<br />exhibits;
<br />(b) Costs of meeting rooms, hospitality
<br />suites, and other special facilities used in
<br />conjunction with shows and other special
<br />events; and
<br />(c) Salaries and wages of employees
<br />engaged in setting up and displaying
<br />exhibits, making demonstrations, and
<br />providing briefings;
<br />(3) Costs of promotional items and
<br />memorabilia, including models, gifts, and
<br />souvenirs;
<br />(4) Costs of advertising and public relations
<br />designed solely to promote the governmental
<br />unit.
<br />2. Advisory councils. Costs incurred by
<br />advisory councils or committees are
<br />allowable as a direct cost where authorized
<br />by the Federal awarding agency or as an
<br />indirect cost where allocable to Federal
<br />awards.
<br />3. Alcoholic beverages. Costs of alcoholic
<br />beverages are unallowable.
<br />4. Audit costs and related services.
<br />a. The costs of audits required by , and
<br />performed in accordance with, the Single
<br />Audit Act, as implemented by Circular A-
<br />133, "Audits of States, Local Governments,
<br />and Non -Profit Organizations" are allowable.
<br />Also see 31 U.S.C. 7505(b) and section 230
<br />( "Audit Costs ") of Circular A -133.
<br />b. Other audit costs are allowable if
<br />included in a cost allocation plan or indirect
<br />cost proposal, or if specifically approved by
<br />the awarding agency as a direct cost to an
<br />award.
<br />c. The cost of agreed -upon procedures
<br />engagements to monitor subrecipients who
<br />are exempted from A -133 under section
<br />200(d) are allowable, subject to the
<br />conditions listed in A -133, section 230 (b)(2).
<br />5. Bad debts. Bad debts, including losses
<br />(whether actual or estimated) arising from
<br />uncollectable accounts and other claims,
<br />related collection costs, and related legal
<br />costs, are unallowable.
<br />6. Bonding costs.
<br />a. Bonding costs arise when the Federal
<br />Government requires assurance against
<br />financial loss to itself or others by reason of
<br />the act or default of the governmental unit.
<br />They arise also in instances where the
<br />governmental unit requires similar assurance.
<br />Included are such bonds as bid, performance,
<br />payment, advance payment, infringement,
<br />and fidelity bonds.
<br />b. Costs of bonding required pursuant to
<br />the terms of the award are allowable.
<br />c. Costs of bonding required by the
<br />governmental unit in the general conduct of
<br />its operations are allowable to the extent that
<br />such bonding is in accordance with sound
<br />business practice and the rates and premiums
<br />are reasonable under the circumstances.
<br />7. Communication costs. Costs incurred for
<br />telephone services, local and long distance
<br />telephone calls, telegrams, postage,
<br />messenger, electronic or computer
<br />transmittal services and the like are
<br />allowable.
<br />8. Compensation for personal services.
<br />a. General. Compensation for personnel
<br />services includes all remuneration, paid
<br />currently or accrued, for services rendered
<br />during the period of performance under
<br />Federal awards, including but not necessarily
<br />limited to wages, salaries, and fringe benefits.
<br />The costs of such compensation are
<br />allowable to the extent that they satisfy the
<br />specific requirements of this and other
<br />appendices under 2 CFR Part 225, and that
<br />the total compensation for individual
<br />employees:
<br />(1) Is reasonable for the services rendered
<br />and conforms to the established policy of the
<br />governmental unit consistently applied to
<br />both Federal and non - Federal activities;
<br />(2) Follows an appointment made in
<br />accordance with a governmental unit's laws
<br />and rules and meets merit system or other
<br />requirements required by Federal law, where
<br />applicable; and
<br />(3) Is determined and supported as
<br />provided in subsection h.
<br />b. Reasonableness. Compensation for
<br />employees engaged in work on Federal
<br />awards will be considered reasonable to the
<br />extent that it is consistent with that paid for
<br />similar work in other activities of the
<br />governmental unit. In cases where the kinds
<br />of employees required for Federal awards are
<br />not found in the other activities of the
<br />governmental unit, compensation will be
<br />considered reasonable to the extent that it is
<br />comparable to that paid for similar work in
<br />the labor market in which the employing
<br />government competes for the kind of
<br />employees involved. Compensation surveys
<br />providing data representative of the labor
<br />market involved will be an acceptable basis
<br />for evaluating reasonableness.
<br />c. Unallowable costs. Costs which are
<br />unallowable under other sections of these
<br />principles shall not be allowable under this
<br />section solely on the basis that they
<br />constitute personnel compensation.
<br />d. Fringe benefits.
<br />(1) Fringe benefits are allowances and
<br />services provided by employers to their
<br />
|