Identifying and Allocating Unallowable Expenses

Department Responsibilities

The first and foremost responsibility for identifying and segregating unallowable costs is at the department level when the costs are incurred and recorded.

All unallowable costs should be identified to the correct account code if the transaction is unallowable, or the correct account if the activity is unallowable
Any questions regarding coding can be addressed to The Office of Contracts and Grants, (352) 392-1235, which is the central unit designated to carry out these oversight responsibilities

Contracts and Grants Responsibilities

In monitoring agreements and in preparing reports:

Contracts and Grants staff review the award and the departmental ledgers of sponsored agreements when preparing reports in order to verify that the charges are allowable in both the general sense and according to the specific agreement. This is an after the fact review and should be seen as a stop gap precaution

The first and foremost responsibility for identifying and segregating unallowable costs is at the department level when the costs are incurred and recorded.

Cost Analysis Responsibilities

In preparing the indirect cost proposal, three methods are used to identify and allocate these costs:

All costs that can be identified by account code are excluded from the indirect cost proposal
- See Charging Costs Directly or Indirectly to Sponsored Projects for a list of these account codes. These costs fall in the first category as being unallowable costs
Any areas/departments/accounts that are identified as being solely or almost solely used for an unallowable activity are identified and moved to Other Institutional Activities
- In this way these activities, which are legitimate for university purposes, are not included in the organized research base and still draw their share of general administrative and other costs
Some costs must be identified through a survey
- All accounts identified as General Administration, College Administration or Department Administration are surveyed
- The questionnaire requests information on what the account is used for, if any unallowable costs have been paid from the account and if there are any similar accounts that should have been polled but were missed
- In addition, certain costs such as lobbying and maintenance to the President’s home are identified
- Once these amounts are identified they are moved to the Other Institutional Activities cost pool or excluded depending on whether the charges are unallowable (as in #1) or the activity is unallowable (as in #2)

Service Centers’ Responsibilities

As stated in the University of Florida Guidelines on Service Centers, Recharge Centers and Specialized Service Facilities, each service center will remove unallowable costs from the rate calculations as set forth by Uniform Guidance 2 CFR 200.

Guideline Issues

Unallowable costs fall into two categories:

Those costs unallowable in and of themselves such as entertainment or lobbying
And costs related to activities that are unallowable such as alumni activity or public relations

It is important that all unallowable costs be recorded in a manner that makes them identifiable. For that to occur, there needs to be campus-wide awareness and training at the departmental level where costs are incurred and first recorded