Unallowable Cost Policy

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Policy No.: 6103
Effective Date: 06/27/02
Revised Date: 12/06/05
Reviewed Date: 01/17/13

Unallowable Cost Policy

Basis of the Policy

It is the policy of the University of Nebraska Medical Center (UNMC) to comply with the federal government’s regulations for funding of projects from external sources, including the federal government. These regulations state that certain costs are not reimbursable under the terms and conditions of the awarding agency.

Purpose of the Policy

To establish guidelines for defining and identifying costs which are unallowable for reimbursement from the federal government and other extramural sponsors.

Definition

Unallowable costs are defined by UNMC a those expenses which are not reimbursable under the terms and conditions of federally sponsored agreements and/or those specifically identified as unallowable in Section J of OMB Circular A-21. In the event a discrepancy exists between the provisions of OMB Circular A-21 and those specified within the sponsored program, the program provisions will prevail.

Policy

The principal investigator is responsible for the management and administration of his/her individual award within the financial constraints outlined by the individual sponsor in the terms of the award and in accordance with UNMC's policy governing unallowable costs.

Typically, unallowable costs include:

• Advertising-including radio, television, exhibits, promotional items, production of internal newsletters and magazines. Advertising costs for patient recruitment and fellowship and training programs are allowable.
• Alcoholic beverages
• Graduation ceremonies and other commencement expenses
• Bad debt expense
• Internal allocation of interest
• Fund raising
• Fines and penalties
• Costs of professional investment advice
• Costs of faculty or administrative housing
• Personal use of institutional automobiles or other property and services
• Club and civic and community memberships
• Alumni activities
• Lobbying
• Public relations
• Medical malpractice insurance
• Meals and travel associated with lobbying, fund raising, alumni activities
• Entertainment for holidays, retirements and other costs for recruiting, entertaining, and tickets to events
• Student activities
• Unrecovered costs (losses) of service centers
• Costs for prosecuting claims against the federal government
• Overdrafts on restricted funds
• Contributions and donations
• Visas

Under certain non-federally funded programs, one or more of the above costs may be allowable.

Unallowable costs are identified and segregated by a combination of the following methods:

• Separate accounts contained within the formal accounting records
• Reviews of expenses conducted as part of the development of the facilities and administrative (F&A) proposal
• Reviews of expenses conducted by sponsored programs personnel in the daily performance of reviewing disbursements made
• UNMC's formal policy on unallowable costs

Additional Information

Any questions about this policy should be referred to Financial Compliance and Cost Analysis.

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