(A)Cost principles, as outlined in 2 C.F.R.
200 Subpart E, communicate the general criteria to determine when a cost is
allowable to claim as a direct or an allocable indirect cost to a federal
grant. The following basic criteria assists in determining allowable costs. For
more detailed information go to https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-E.
(1)Reasonable:
(a)The cost amount does not exceed that
which would be incurred by a prudent person under similar circumstances; and
(b)The cost is comparable to prices for
goods or services within the geographic area.
(2)Necessary:
(a)The cost is necessary for the purposes
and performance of the federal grant; and
(b)The cost is generally recognized as
ordinary and necessary for the operation of the CFSA or WIOA local area and
does not significantly deviate from the locally established cost practices and
policies.
(3)Composition and consistent treatment of
costs:
(a)A cost may not be charged to a federal
grant as a direct cost if any other cost incurred for the same purpose in like
circumstances has been allocated to the federal award as an indirect cost.
(b)Direct costs are costs that are charged
directly to a federal grant.
(c)Indirect costs are costs which
accumulate and allocate to open federal grants that are not in liquidation.
Indirect costs are also known as cost pool costs, operating costs, and cost
objectives.
(d)Applicable credits.
(4)Allocable:
(a)Allocation is the process of assigning
accumulated indirect costs to federal grants.
(b)An indirect cost is allocable to a
federal grant in accordance with the relative benefit received based on the
allocation methodology.
(B)According to the CFSA and WIOA local
area subgrant agreements, as outlined in rules 5101:9-6-02 and 5101:9-31-01 of
the Administrative Code, each CFSA and WIOA local area will ensure costs are
claimed for the intended purposes of federal grants.
(C)Each CFSA and WIOA local area will
maintain written procedures for determining the allowability of costs.
Effective: 2/24/2022
Certification: CERTIFIED ELECTRONICALLY
Date: 02/14/2022
Promulgated Under: 111.15
Statutory Authority: 5101.02
Rule Amplifies: 5101.02