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American Recovery
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Frequently Asked Questions

Sponsored Funds
Financial Management
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Albany, New York 12222
Phone: (518) 442-3196
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Sponsored Funds Financial Management
 
Sponsored Funds | Unallowable Costs

Unallowable Costs

According to Federal regulations, the following costs are unallowable on federal awards. While not all awards on campus are sponsored by federal funds, in compliance with OMB Circular A-21, we are required to apply principals consistently across all programs.  Therefore, all grants and contracts at the University at Albany are subject to the same rules.

  • Advertising costs are unallowable unless they are necessary to meet the requirements of the sponsored agreement
  • Public Relations costs are unallowable except for (1) costs specifically required by sponsored agreements, (2) cost of communicating with the public and press pertaining to specific accomplishments which result from performance of sponsored agreements or (3) costs of conducting communication and liaison necessary to keep the public informed on matters of public concern such as notices of awards, financial matters, etc.
  • Alcoholic beverage costs are unallowable.
  • Alumni activity costs are unallowable.
  • Bad debt costs are unallowable.
  • Costs of local civil defense projects not on the institution's premises are unallowable.
  • Commencement and convocation costs are unallowable.
  • Increases to normal and past service pension costs caused by a delay in funding the actuarial liability beyond 30 days after each quarter of the year to which such costs are assignable are unallowable.
  • Institution furnished automobile costs for personal uses are unallowable.
  • Contingency provision costs are unallowable.
  • Defense and prosecution of criminal and civil proceedings, claims appeals, and patent infringement are generally unallowable.    

        Costs incurred by the institution for defense of suits brought by its employees or ex-employees are unallowable if the institution was found liable or settled. 

        Costs of legal, accounting, consultant services, and related costs incurred with defense against government claims or appeals, or the prosecutions of claims or appeals against the government are unallowable. 

        Costs of legal, accounting, consultant, and related costs, incurred in connection with patient infringement litigation, are unallowable unless otherwise provided for in the sponsored agreements.

  • Depreciation reserves: Institutions shall expend currently, or reserve for expenditure within the next five years, the portion of indirect cost payments made for depreciation under sponsored research agreements, to acquire repair, renovate, or improve buildings or equipment directly used for organized research.
  • Donations or contributions made by the institution regardless of the recipient are unallowable.
  • Entertainment costs including amusement, diversion, and social activities and any costs directly associated with such costs are unallowable.
  • Executive lobbying cost incurred in attempting to improperly influence either directly or indirectly, an employee or officer of the federal government regarding a sponsored agreement are unallowable.
  • Fines and penalties costs resulting from failure of the institution to comply with federal, state, local or foreign laws and regulations are unallowable unless specifically approved by a federal agency.
  • Goods and services costs for personal use are unallowable.
  • Housing and personal living expenses are unallowable.
  • Insurance costs to protect against defects in the institution's materials or workmanship are unallowable.
  • Interest, fund raising and investment management costs are unallowable except for cost related to the physical custody and control of monies and securities and for interest cost paid to external parties for assets (buildings and equipment) used to support sponsored agreements.
  • Lobbying costs are unallowable unless specifically authorized by statute to be undertaken with funds from sponsored agreements.
  • Losses on other sponsored agreements or contracts are unallowable.
  • Membership costs in any civic, community organization, country club or social or dining club or organization are unallowable.
  • Pre-agreement costs prior to the effective date of the sponsored agreement are unallowable unless approved by the sponsoring agency.
  • Recruiting costs for help wanted advertising, special emoluments, fringe benefits and salary allowances incurred to attract professional personnel from other institutions that do not conform to the established practices of the institution are unallowable.
  • Selling and marketing costs of products or services of the institution are unallowable.
  • Severance costs incurred in excess of the institution's normal severance pay policy applicable to all persons employed at the institution upon termination of employment are unallowable.
  • Specialized service facilities charges should be designed to recover not more than the aggregate cost of the services over a long-term period agreed to by the institution and the cognizant federal agency.
  • Student activity costs are unallowable unless specifically provided in the sponsored agreements.
  • Airfare travel costs in excess of the lowest available commercial discount airfare or customary standard coach airfare are unallowable except in special circumstances.
  • Trustee’s travel and subsistence costs, regardless of the purpose of the trip, are unallowable.




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