§ 200.400 - Policy guide.

§ 200.400 Policy guide.

The application of these cost principles is based on the fundamental premises that:

(a) The non-Federal entity is recipient and subrecipient are responsible for the efficient and effective administration of the Federal award through the application of sound management practices.

(b) The non-Federal entity assumes responsibility recipient and subrecipient are responsible for administering Federal funds in a manner consistent with underlying agreements, program objectivesFederal statutes, regulations, and the terms and conditions of the Federal award.

(c) The non-Federal entityrecipient and subrecipient, in recognition of its own their unique combination of staff, facilities, and experience, has the primary responsibility are responsible for employing whatever form of sound organization and management techniques may be necessary in order to assure ensure the proper and efficient administration of the Federal award.

(d) The application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity recipient and subrecipient must be consistent with these cost principles and support the accumulation of costs as required by the these cost principles, and must provide for including maintaining adequate documentation to support costs charged to the Federal award.

(e) In When reviewing, negotiating, and approving cost allocation plans or indirect cost proposals, the cognizant agency for indirect costs should generally assure ensure that the non-Federal entity is applying recipient consistently applies these cost accounting principles on a consistent basis during their review and negotiation of indirect cost proposals. Where wide variations exist in the treatment of a given cost item by the non-Federal entityrecipient, the reasonableness and equity of such treatments should be fully considered. See the definition of indirect (facilities & administrative (F&A)) costs in § 200.1 of this part.

(f) For non-Federal entities recipients and subrecipients that educate and engage students in research, the dual role of students as both trainees and employees (including pre- and post-doctoral staff) contributing to the completion of Federal awards for research must be recognized in the application of these principles.

(g) The non-Federal entity may recipient or subrecipient must not earn or keep any profit resulting from Federal financial assistance , unless explicitly authorized by the terms and conditions of the Federal award. See also § 200.307.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 85 FR 49561, Aug. 13, 2020]

When the required activities of a fixed amount award were completed in accordance with the terms and conditions of the award, the unexpended funds retained by the recipient or subrecipient are not considered profit.