2.3.4 Unallowable Costs

Unallowable Costs may not be charged as direct costs on sponsored projects including cost share accounts or as indirect costs. Certain costs incurred by higher education institutions cannot be charged to federally sponsored research projects, either as a direct or F&A cost. These costs are referred to as unallowable costs. The Uniform Administrative Requirements (2 CFR 200), Subpart E - Cost Principles, provides guidance for determining basic considerations such as allowability of costs. The following specific items cannot be included in the F&A rate calculation or charged as direct costs to federal research:

• Advertising (displays, exhibits),
• Alcoholic Beverages,
• Alumni Activities,
• Bad Debts (noncollectable invoices),
• Commencement costs, Donations and Contributions,
• Entertainment Expenses,
• Fund Raising,
• Fines and Penalties,
• Goods and Services for Personal Use,
• Housing and Personal Living Expenses,
• Memberships in Social Organizations,
• Lobbying, Selling/Marketing of Goods and Services

Federal agencies awarding projects to institutions may apply further restrictions on the allowability of certain costs.

Other Unallowable Costs

Trafficking in Persons
In compliance with the International Trafficking in Persons Act, no sponsor funds may be used to engage in or support trafficking in persons, procurement of sexual acts, or forced labor.

Lobbying
No sponsor funds may be used to effect any oral, written or electronic communications to a covered Legislative or Executive Branch Official in an attempt to influence the formulation, modification, or adoption of Federal legislation; the administration or execution of a Federal program or policy; formulation, modification, or adoption of a Federal rule, regulation, Executive order, policy or position of the United States Government; or the nomination or confirmation of a person subject to confirmation by the Senate.