This policy is designed to establish the criteria for determining the allowability of costs under a federal award. This policy applies to all GBPLD employees. Determination of allowability will be done according to the terms and conditions of the award and applicable state or federal cost principles such as Subpart E – Cost Principles of 2 CFR 200.


Costs must meet the following general criteria to be allowable under a federal award.

  • Be an allowable cost under the cost principles and/or the terms and conditions of the award agreement.
  • Be reasonable and necessary for the performance of the award.
  • Be allocable to a specific grant—incurred to advance work under the grant and deemed assignable, at least in part, to the grant.
  • Be accorded consistent treatment regardless of the source of funding (federal or non-federal). For example, a cost may not be assigned to a federal award as a direct cost if another cost incurred for the same purpose in like circumstances would be treated as an indirect cost.
  • Conform to the limitations and exclusions of the terms and conditions of the award as well as GBPLD policies and is not prohibited by state or federal law.

Costs should also

  • Be determined in accordance with generally accepted accounting principles (GAAP).
  • Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period.
  • Be adequately supported with appropriate documentation.

CEO/COO should be familiar with the terms and conditions of their award(s) as well as the specific restrictions included in Subpart E – Cost Principles of 2 CFR 200. The GBPLD Director of Finance can assist in determining whether an expense is allowable under a particular award.

Prior Approval

Certain expenses may only be allowable if prior approval is received from the funding agency. Prior approval requirements are referenced at eCFR :: 2 CFR 200.308 -- Revision of budget and program plans. A list of costs that require prior approval are referenced at eCFR :: 2 CFR 200.407 -- Prior written approval (prior approval). If prior approval is required, the Director of Grants Management will coordinate the request following the funding agency’s established procedures. In addition, all requests for budget, scope, key personnel, or other changes must be reviewed by the Director of Grants Management and require approval by the funding agency unless otherwise indicated in the award agreement or in writing from the funding agency.

Budget Review
  • CEO/COO must submit proposed budgets to the Director of Finance for review. In addition to other required information, all proposed project submissions should delineate estimated costs by cost item.
  • CEO/COO must review proposed budgets and estimated costs for specific allowable cost requirements, budget parameters, and those activities/costs that require pre-approval by the funding agency.
  • If a proposed project or budget includes a request for an unallowable cost, the Director of Finance will return the proposal to the requesting party for review and, if practicable, resubmit with corrected cost items.
Expense Review
  • Once a grant related expenditure is incurred, and an invoice or other demand for payment is submitted, the Finance Department must perform a second review to ensure that the expenditure is an allowable cost.
  • If all cost items are deemed allowable and properly allocable, the expense will move through GBPLD’s normal disbursement process.
  • If any cost item is deemed unallowable, the Finance Department will notify the CEO/COO and the expense will not be paid with award funds. The Finance Department may in their discretion, and consistent with this policy, allow an invoice or other demand for payment to be resubmitted with a revised cost allocation.

Board Approved 2/13/2024