Type of Policy
Policy No
Effective Date
Last Revised
Review Date
Policy Owner
Office of Grants and Contracts Accounting
Contact Name
Josh Rosenberg
Contact Title
Executive Director, Grants and Contracts
Contact Email
Reason for Policy

The purpose of this policy is to describe the different types of costs incurred by an institution and to identify which costs are allowable versus unallowable on sponsored programs. Unallowable costs are not eligible for reimbursement by the sponsor and must be covered on non-sponsored funds.  Policies and procedures developed by the Office of Grants and Contracts Accounting are based on the Federal government’s Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements (2 CFR Part 200) Subpart E “Cost Principles”. Individual sponsored awards may contain terms and conditions that are more specific and that are either more or less restrictive than 2 CFR Part 200 Subpart E. In these cases, the individual award/agreement will be used to determine the allowability of expenses posted directly to the associated sponsored award(s). In all cases, expenses must be accounted for in accordance with applicable Georgia Tech operating procedures.

Policy Statement

From OMB 2 CFR Part 200.403: The factors affecting allowability of costs under these principles are:

  • They must be necessary, reasonable, and allocable;
  • They must conform to any limitations or exclusions set forth in the principles or in the Federal award as to types or amount of cost items;
  • They must be consistent with policies and procedures that apply uniformly to both Federally-financed and other activities of the non-Federal entity;
  • They must be accorded consistent treatment as either a direct or indirect cost;
  • They must be determined in accordance with generally accepted accounting principles (GAAP);
  • They must not be included or used to meet cost sharing or matching requirements of any other Federally-financed program; and
  • They must be adequately documented

If any activity/expense cannot meet the above criteria, it may not be charged directly or indirectly to a sponsored project, regardless of its purpose.

Below is a list of costs normally considered unallowable.  This is not an all-inclusive list, and, depending on the project scope and the sponsor specific agreement, some costs that are generally unallowable may be allowable for a specific project. 

  • Office supplies
  • Telephone toll charges / hand-held communications device charges
  • Administrative or clerical salaries*
  • Postage
  • First Class or Business Class travel
  • Entertainment, including alcohol

* Salaries of administrative and clerical staff may be charged directly only if all of the following conditions are met:

  1. They are integral to the award or activity;
  2. Individuals involved can be specifically identified with the award or activity;
  3. Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency; and
  4. The costs are not also recovered as indirect (F&A) costs.

The following expense types are typically allowable as a direct charge to a sponsored award (2 CFR Part 200.453):

In the specific case of computing devices, charging as direct costs is allowable for devices that are essential and allocable, but not solely dedicated, to the performance of a Federal award.

Certain non-sponsored expenses may be unallowable for inclusion in the F&A Cost reimbursement rate, which is applied to eligible direct expenses on sponsored funds. Examples include fines/penalties, commencement expenses, and fund-raising activities. Unique ledger account or worktags are used to identify unallowable activities.


This policy applies to all Georgia Tech Faculty and Staff engaged in Resident Instruction research or administration of Resident Instruction research. 

Policy Terms

…the goods or services involved are chargeable or assignable to that award in accordance with relative benefits received (200.405)

...conforms to limitations or exclusions set forth in the sponsored agreement and these principles as to types or amounts of cost items

Consistently Treated
…may not be charged as a direct cost if any other like cost has been allocated or charged as an indirect cost (200.403)

Direct Charges
Charges on awards are allowable if they can be identified specifically to or associated with a particular sponsored project and are not treated as a facility or administrative (F&A) cost item.

F&A Costs
F&A cost items are incurred for common purposes, such as office supplies, departmental administration, facility costs, and general purpose equipment that are charged to sponsored awards via the appropriate F&A cost reimbursement rate. 

... does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost (200.404)


Georgia Tech authorizes the principal investigator (PI) and the properly authorized unit designee (financial manager and staff) to have primary responsibility for the management of sponsored agreement funds. It is the responsibility of PIs, unit heads and staff delegated signature authority by unit heads to ensure that only allowable charges are posted as direct expenses to sponsored awards. Unit financial managers have the most up-to-date information regarding compliance with allowable expenses on sponsored awards. As noted earlier, units are also responsible for covering unallowable expenses that cannot be charged either directly or indirectly to sponsored funds. Local management’s approval of a financial transaction indicates:

  • Goods or services are directly related to the award scope
  • Charges are allowable according to the approved award budget
  • Charges have been incurred within the award time period
  • Charges have been incurred in accordance with Georgia Tech financial and accounting policies and procedures
  • Charges have been incurred in accordance with Terms and Conditions of the sponsored agreement
  • Funds are available in the designated awards
Policy History
Revision Date Author Description
5-20-2024 Office of Grants and Contracts Accounting Editorial updates to remove procedural guidance from the policy. 
12-26-2014 Office of Grants and Contracts Accounting Update to conform to Office of Management and Budget Uniform Requirements issued 12-26-2013