Multifamily Housing Program Financial Management Toolkit

15.i Allowable Expenses and Expense Documentation

Allowable costs are as follows:

Cost Type

Instructions for Completing the One Year Budget Form — HUD-91186-A

Personnel (Direct Labor)

This section should show the labor costs for the Service Coordinators and/or aides. Use the hourly labor cost for salaried employees (use 2080 hours per year or the value your organization uses to perform this calculation). Do not show fringe or other indirect costs in this section.

Fringe Benefits

Use the same standard fringe rate used by your organization. You may use a single fringe rate (a percentage of the total direct labor) or list each of the individual fringe charges. Use the Total Direct Labor Cost as the base for the fringe calculation. If your organization calculates fringe benefits differently, use a different base and discuss how you calculate fringe as a comment.

Quality Assurance

Give the title of the professional (e.g. MSW) who will be performing QA, the number of hours over the year you expect to use them, and their hourly rate. Quality Assurance is limited to program evaluation activities and cannot exceed 10% of line a, Personnel. If QA costs are budgeted, the grantee must also provide an annual report from the QA provider using form HUD-92456 Semi-Annual Performance Report. The report is due once per year on October 30th.


Give fees and rates for appropriate training programs, to the extent known. Otherwise estimate and provide bases for the anticipated cost. Please note: first-time SC must complete 36 hours of training in their first year; all SC must complete 12 hours of eligible training each year. (See MAH.8.9 for detailed training expectations and guidelines.)


Provide mileage and cost estimates for use of private vehicles or public transportation; show the estimated cost of airfare required to attend training programs, and list necessary per diem rates in accordance with your organization’s policies. Give travel destinations if known.

Supplies and Materials

List the supplies you propose to purchase. You can use an anticipated consumption rate to estimate the cost of office or other common supplies, (e. g. 1 box paper clips every 3 months). Include replacement of office equipment. List items individually along with the quantity and their anticipated cost.

Start-up Costs

Reasonable costs associated with setting up a confidential office space for the Service Coordinator are allowable. Such expenses must be one-time only start-up costs. Such costs may involve acquisition, leasing, rehabilitation, or conversion of space, as well as the purchase of office furniture, computer hardware & software.
Please note that HUD field office staff must approve both the proposed costs and activity and must perform an environmental review on such proposed work prior to grant award. In addition, the office space must be accessible to individuals with disabilities and meet the Uniform Federal Accessibility Standards (UFAS) requirements of accessibility or the 2010 ADA Standards for Accessible Design, except for certain specific identified provisions, as detailed in HUD’s Notice on “Instructions for use of alternative accessibility standard,” published in the Federal Register on May 23, 2014, .

Other Direct Costs

Include costs such as telephone and internet service, printing, postage, and maintenance of office equipment, when such costs are attributable to the SC program only.

Indirect Costs

OMB circulars define indirect costs as those that have been incurred by multiple programs for common or joint purposes. Indirect costs are associated with the centralized services distributed throughout your agency and cannot be readily identified with one particular program. Additionally, the costs should not be otherwise treated as direct costs. If your organization already has an established indirect cost rate, use this rate and explain how it is calculated. Otherwise, HUD recommends using the ‘de minimus’ indirect cost rate of 10% specified in 2 CFR 200.414(f)

In addition to reporting costs as described above, below is a listing of three additional reporting categories:

Budget Item

Instructions for completing the One Year Budget, form HUD-91186-A

Contracts/ Sub-Grantees

If you will contract with a public or private agency to provide the Service Coordinator or Quality Assurance, list the activities and costs included in the contract in this section.

Quality Assurance % Quality Assurance costs cannot exceed ten percent (10%) of your total Personnel/Direct labor cost. Calculate your percentage and include on this line, to ensure you are within the 10% cap.

Funding Sources and Time Periods

Housing owners can use any of the four funding sources (SCMF grant funds, Section 8 operating funds, Residual Receipts or Excess Income) to pay the costs of a Service Coordinator program. You may use these resources individually or in combination with each other. Indicate which funding sources you propose to use, by giving the dollar amount, the number of years and months during which you will use the funds, and the exact time period anticipated.

HUD further stipulates that Service Coordinator grant funds may not be used for any of the following types of expenses:

  • Any costs associated with parties or meals (even for residents)
  • Application preparation and submission
  • Computer hardware/software or other equipment not used/required by the Service Coordinator
  • Cost overruns associated with creating a private office space for SC use
  • Entertainment/classes for residents
  • Food, beverage, eating utensils, plates, cups or condiments
  • Gifts to residents/or staff
  • Increasing management fees
  • Paying PAC members for their services
  • Restaurant meals
  • Service Coordinator-related training courses for property management staff who do not directly provide Service Coordination. (Owners must use their management fees to pay this expense.)
  • Supervision performed by property management staff
  • Travel not associated with an approved training and/or not included in the approved budget
  • Usual audit and legal fees
  • Or any other cost as defined by 2 CFR Part 200

It is of the utmost importance that owners are able to accurately comply with the cost principles stipulated in the ‘omnibus circular’ (2 CFR Part 200.400) and have in place accounting resources to properly allocate and account for expenses within GAAP and fund accounting practices, as described in Part II of this Toolkit.

What Are HUD’s Requirements Related to Document Retention?

Per 2 CFR Part 200.333, financial records, supporting documents, statistical records and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, like the Service Coordinator program, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency. (This means from the date of the drawdown request.)

If however, a management company’s policies or other funding source requires a longer records retention period, then the owner should follow the more stringent policy.