Allowable vs. Unallowable Uses

What are examples of allowable uses of Federal funds?

  • Personnel costs (salaries/benefits) for time devoted to activities funded by grant
  • Cost of materials for purpose of the award
  • Equipment and other approved capital expenditures
  • Travel expenses incurred specifically to carry out the award

What are examples of unallowable uses of Federal funds?

  • Entertainment costs
  • Costs of legal defense related to civil or criminal fraud
  • Contributions or donations
  • Fundraising costs
  • Lobbying costs
  • Prohibited by award regulations

Looking for definitions of the common CoC and ESG Program terms referenced throughout the Virtual Binders?

Virtual Binders Glossary


Remember, recipients and subrecipients must adequately document the costs that are allowable, reasonable, and allocable to each grant. Examples include detailed receipts, cost comparisons, staff timesheets, or other documents that clearly demonstrate the relationship between the costs incurred and the grant-funded activity.

What else should I consider when spending Federal funds?

In addition to being allowable, the costs must also be allocable. The Cost Principle of Allocability ensures that each cost is reasonable and benefits the funded program activity. For a cost to be allocable, it must:

  • Be in the approved budget for the funded program
  • Be specifically linked to the eligible activities funded in the grant (not just any activity)
  • Be reasonable and documented