Human Resources Information Systems
The PAN Form Training and Reference Manual
Addendum
Unallowable vs. Allowable Costs
Federal regulations have defined certain costs as "allowable" or unallowable" to sponsored agreements either as a direct cost or as an indirect cost. To eliminate unallowable costs from the calculation of the facilities and administrative (indirect) cost rate, a single digit designator (1=allowable and 0=unallowable) is used in the chart string. It is positioned directly after the account designation. Most costs are allowable.
All direct costs (salaries, wages, benefits, supplies, etc.) charged to a sponsored agreement (fund 5000) should be allowable and coded with a "1".
OMB Circular A-21, Section J specifies costs that are generally unallowable. For specifics of the regulations, contact the Office of Governmental Accounting at 581-5989 or see the line from www.acs.utah.edu/afs. The regulation itself can be viewed at http://www.whitehouse.gov/OMB/circulars/a021/a021.html.
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