Grants Accounting

Unallowable Costs

According to federal cost principles for educational institutions,
implemented by 2 CFR Part 220 (OMB A-21), certain types of
costs are not allowable charges on federal grants (neither as
direct nor as facilities and administrative costs). The list below
is not exhaustive and was developed from the list of unallowable
costs presented in 2 CFR Part 220 (OMB A-21)

Advertising/Selling & Marketing

Costs of selling and marketing any services or products of GVSU are
unallowable, unless included in allowable advertising costs. The only
allowable advertising costs are those solely for:
          Recruitment of sponsored agreement funded personnel;
          Procurement of goods and services for a sponsored agreement;
          Disposal of scrap or surplus materials acquired for a sponsored
          Other specific costs required by a sponsored agreement.

Alcoholic beverages

Costs of alcoholic beverages are unallowable. Contact the Grants Accounting
Office for specific questions.

Alumni activities

Costs incurred for, or in support of, alumni/alumnae activities and similar
services are unallowable.

Bad debt expense

Bad debts including losses (whether actual or estimated) arising from
uncollectible accounts and other claims, related collection costs, and related
legal costs are unallowable.

Commencement and convocation costs

Costs incurred for commencement and convocations are unallowable.

Defense and prosecution of criminal and civil proceedings,
claims, appeals and patent infringements

Generally, these costs are unallowable. For more information, contact the
Office of University Counsel.

Donations or contributions

Contributions or donations, including cash, property and services made by the
institution (GVSU), regardless of the recipient, are unallowable.


Costs of activities, including amusement, diversion and social activities and any
costs directly associated with such costs (such as tickets to shows or sports
events, meals, lodging, rentals, transportation and gratuities) are unallowable.

Fines and penalties

Costs resulting from violations of or failure of GVSU to comply with, Federal,
State, and local or foreign laws and regulations are unallowable, except when
incurred as a result of compliance with specific provisions of the sponsored
agreement, or instructions in writing from the authorized official of the sponsoring
agency authorizing in advance such payments.

Fund raising

Costs of organized fund raising, including financial campaigns, endowment drives,
solicitation of gifts and bequests, and similar expenses incurred solely to raise
capital or obtain contributions are unallowable. Costs of investment counsel or staff
and similar expenses incurred solely to enhance income from investments are

Goods or services for personal use

Costs of goods or services for personal use of GVSU’s employees are unallowable
regardless of whether the cost is reported as taxable income to the employees.

Interest Expense

Costs incurred for interest on borrowed capital, temporary use of endowment funds,
or the use of GVSU’s internal funds, however represented are unallowable. For
specific questions, contact the Grants Accounting Office.


In general, lobbying costs are unallowable. In some situations, certain types of
lobbying costs may be allowable. Contact the Grants Accounting office for further

Losses on other sponsored agreements or contracts

Excess costs from one sponsored agreement cannot be transferred to another
sponsored agreement.  or contract of any nature is unallowable. This also applies
to GVSU contributed cost sharing.

Meetings and Conferences

Costs of meetings and conferences where the primary purpose is something
other than the dissemination of technical information
are not allowable.

Memberships, subscriptions and professional activity costs

Costs of membership in any civic or community organization are unallowable. 
For more information, contact the Grants Accounting Office.

Pre-award costs

Costs incurred prior to the effective date of the sponsored agreement are
unallowable unless approved by the sponsoring agency. 
For more information,
contact the Grants Accounting Office.

Proposal costs

The cost of preparing proposals on potential federally and non-federally funded
sponsored agreements are not allowable as direct charges on a sponsored

Student activity costs

Costs incurred for intramural activities, student publications, student clubs, and
other student activities are unallowable, unless specifically provided for in the
sponsored agreement.

Page last modified February 10, 2014