Grants Practice Shorts: Allocable Costs Under Federal Grants

Welcome to Feldesman's Grants Practice Shorts series where we discuss helpful tips and strategies in common areas of federal grant management. Be sure to check out our other installments on our Grants Practice Shorts page.

Last week we addressed allowable costs under Federal grants; we now turn to allocability of costs. The concept of a cost being "allocable" is essentially that, in whole or in part, the cost benefits the federally funded project. See 2 C.F.R. § 200.405(a).

Allocable Costs in General

Some costs are easy to identify as allocable because they are incurred exclusively in relation to the federal project. § 200.405(a)(1). An example would be the salary of a Project Director that the grantee employs to manage a particular federally funded project, and who does nothing else with his or her work time.