Federal Cost Principles

  • All Costs Must –

    ¨  Be in accordance with generally accepted accounting principles

    ¨  Not included as a match

    ¨  Be of net applicable credits

    ¨  Be adequately documented

    Necessary and Reasonable –

    ¨  Must be necessary for the performance or administration of the grant

    ¨  Must follow sound business practices

    ¨  Fair market prices

    ¨  Act with prudence under the circumstances

    ¨  No significant deviation from established prices 

    Practical Aspects of Necessary –

    ¨  Do I really need this?

    ¨  Is this the minimum amount I need to spend to meet my need? 

    Practical Aspects of Reasonable –

    ¨  Do I have the capacity to use what I am purchasing?

    ¨  Did I pay a fair rate?

    ¨  If I were asked to defend this purchase, would I be comfortable?