Allocability

Allocability - If possible, expenses should be individually charged to a specific sponsored agreement. An allocable cost is a cost that can be assigned to one or more sponsored project or other project in proportion to the relative benefits received.


A cost is allocable to a sponsored agreement if:

  • It is incurred solely to advance the work under the sponsored agreement.
  • It benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through use of reasonable methods.
  • It is necessary to the overall operation of the institution and, in light of the principles provided in the Circular, is deemed to be assignable in part to sponsored projects.

The best approach to justify a cost on a specific sponsored agreement is that it is incurred solely to advance the work of the agreement. Some of these costs are easy to identify such as pieces of equipment, animal costs, or chemicals purchased solely for one project.

Other costs may clearly be allowable and reasonable but a question arises: how best to allocate among one or more sponsored agreements that benefit from that cost? The most typical example of this type of cost is general laboratory supplies. A-21 acknowledges that it is sometimes impossible to precisely identify or allocate such costs; governing regulations thus allow for the exercise of judgment: "A precise assessment of factors that contribute to costs is not always feasible, nor is it expected. Reliance, therefore, is placed on estimates in which a high degree of tolerance is appropriate." A-21, J8b(1)c.

Information For:

current students
faculty and staff		 parents
alumni		 high school students
admitted students