Multifamily Housing Program Financial Management Toolkit

11b. Defining Administrative Costs for HUD Purposes

Because HUD programs have specific limits on the amount of funds spent on grant administration, separating program costs from administrative costs is essential for financial management compliance. In general, administrative costs include the costs of overall program management, budgeting, coordination, monitoring, reporting and evaluation. This includes salaries and benefits for personnel engaged in these activities, as well as the costs of administrative services performed under third-party contracts or agreements, including general legal services, accounting services, and audit services. It can also include the costs of goods and services required for program administration, including the rental or purchase of equipment, insurance, utilities, office supplies, and the rental and maintenance (but not purchase) of office space.