Frequently Asked Questions

What are allowable and unallowable costs?

An allowable cost is a cost that is necessary for a project. The cost must support the strategies and approaches outlined in the project design. 

Unallowable costs are costs the government is unwilling to pay as a direct charge or through an indirect cost pool applied to the federal grant or contract. A grantee is not prohibited from incurring unallowable costs but they cannot be recovered either directly or indirectly under federal grants or contracts. Examples of unallowable costs are: 

Food and beverage costs
Contracts over $150,000 that are not competed
Consultant rates exceeding $650 per day

For more information, see the OJP Financial Guide at https://ojp.gov/financialguide/index.htm.