§ 200.405 - Allocable costs.

§ 200.405 Allocable costs.

(a) Allocable costs in general. A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or cost is assignable to that Federal award or other cost objective in accordance with the relative benefits received. This standard is met if the cost satisfies any of the following criteria:

(1) Is incurred specifically for the Federal award;

(2) Benefits both the Federal award and other work of the non-Federal entity recipient or subrecipient and can be distributed in proportions that may be approximated using reasonable methods; andor

(3) Is necessary to the overall operation of the non-Federal entity recipient or subrecipient and is assignable in part to the Federal award in accordance with the these cost principles in this subpart.

(b) Allocation of indirect costs. All activities which benefit from the non-Federal entityrecipient's indirect (F&A) or subrecipient's indirect cost, including unallowable activities and donated services by the non-Federal entity or recipient or subrecipient or third parties, will receive an appropriate allocation of indirect costs.

(c) Any Limitation on charging certain allocable costs to other Federal awards. A cost allocable to a particular Federal award under the principles provided for in this part may not be charged to other Federal awards (for example, to overcome fund deficiencies , or to avoid restrictions imposed by Federal statutes, regulations, or the terms and conditions of the Federal awards, or for other reasons). However, this prohibition would not preclude the non-Federal entity recipient or subrecipient from shifting costs that are allowable under two or more Federal awards in accordance with existing Federal statutes, regulations, or the terms and conditions of the Federal awards.

(d) Direct cost allocation principles: . If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit . If a cost benefits two or more projects or activities in proportions that However, when those proportions cannot be determined because of the interrelationship of the work involved, then, notwithstanding paragraph (c) of this section, the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Where the purchase of equipment or other capital asset is specifically authorized under a Federal award, the costs are assignable to the Federal award regardless of the use that may be made of the equipment or other capital asset involved, when no longer needed for the purpose for which it was originally required. See also §§ 200.310 through 200.316 and 200.439.

(e) If the Costs of contracts subject to CAS. If a contract is subject to CAS, costs must be allocated to the that contract pursuant according to the Cost Accounting Standards. To the extent that CAS is applicable, the allocation of costs in accordance with CAS takes , which take precedence over the allocation provisions in this part.

[78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75885, Dec. 19, 2014; 85 FR 49562, Aug. 13, 2020]