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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