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ALLOWABLE COSTS What can the grantee buy with Forest Service funds? 1/30/2018 2

What can the grantee buy with Forest Service funds? Why should we care about the answer to this question? 1/30/2018 3

This presentation is an overview based on Forest Service Handbook 1509. 11, Chapter 20, Section 20. 5. The following budget object class categories are taken from the (Standard Form) SF-424 A, Budget Information - Non-Construction Programs. This Form is part of the grant or cooperative agreement application. 1/30/2018 4

Budget Form SF-424 A 1/30/2018 5

In general, a grantee’s costs must meet the following criteria to be allowable: • Be reasonable for the performance of this project. • Be directly associated with this project (allocable). • Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the organization. • Not be used as cost-share or match on any other federally-financed program. • Be adequately documented. • Comply with the appropriate cost principles for the organization. 1/30/2018 6

Federal Regulations for Grants and Cooperative Agreements • Omni-Circular, 2 CFR 200: Link To Omni-Circular • For-Profit Cost Principles: 48 CFR, Part 31. 2 • Forest Service Handbook: Forest Service Directives 1/30/2018 7

Personnel & Fringe Benefits Ensure that the proposed rates for various personnel are reasonable based on local wages paid for work being performed. Easy comparison data at hand may be historical contract prices, local Department of Labor wage rate determinations, and Government rates for similar work. Identify whether the labor rate already includes fringe benefits. Costs associated with lobbying of Congress are UNALLOWABLE. 1/30/2018 8

Travel Breakout the estimated travel costs in enough detail to determine reasonableness, for example, subsistence, mileage, and airfare costs. Ensure that the level and location of travel is appropriate for the level of work projected (must be necessary for the project). 1/30/2018 9

Equipment © D. R. Johnson Equipment, at a minimum, consists of non-expendable personal property valued at $5, 000 or more per unit and has a useful life of more than 1 year (such as machinery, testing equipment, etc. ) Equipment should be clearly needed for the project. A UCC Filing, proper tracking, and disposition procedures must be maintained and followed by the grantee. Better alternatives may be for the grantee to (1) lease equipment, (2) use Forest Service-owned equipment, or (3) purchase equipment with their own funds as a part of their contribution, then redistribute requested funds to other cost elements (if appropriate and justified). 1/30/2018 10

Supplies consist of expendable items of low value (less than $5, 000) that are generally consumed in performing the project (such as paper and pencils). Ensure that the level and cost of supplies proposed are reasonable and justified and that they are not being “stockpiled” for future use. 1/30/2018 11

Contractual – Subgrants or Subcontracts If subgranting or subcontracting is proposed, provide detail for these costs and ensure they are reasonable, allocable, and allowable. 1/30/2018 12

Construction If costs are included in this element, ensure the provisions of the Forest Service statute under which the grant or cooperative agreement can be issued allows it, as it is not common for statutes to include the building of other’s structures. If federal funds are to be used to reimburse the costs of construction, Davis-Bacon wage rates may be applicable, if specifically stated in the statute. 1/30/2018 13

Other Costs Ensure these costs are detailed and clearly identified. Make sure the costs are explained appropriately, and are necessary and properly allocated to the proposed grant or cooperative agreement. 1/30/2018 14

Indirect Charges Be sure these costs are supported (in writing) by a Negotiated Indirect Cost Rate Agreement (NICRA). The grantee shall provide the written NICRA with their application. Not all grantees have a NICRA. In this case, they may want to use the de minimus rate of 10%, or obtain a NICRA. 1/30/2018 15

Program Income • Program income is the gross revenue generated by a grant or cooperative agreement supported activity between the effective date of the award and the date of the final expenditure report. • Program income may be earned by grantees from fees charged for conference or workshop attendance, from rental fees earned from renting out real property or equipment acquired with grant or cooperative agreement funds, or from the sale of commodities or items developed under the grant or cooperative agreement, etc. • Interest earned by the grantee on funds advanced by the Forest Service is not considered program income. 1/30/2018 16

Program Income Defined Program Income Alternative Definition Deduction Program income which the grantee did not anticipate at the time of the award must be used to reduce the Forest Service and grantee contributions rather than to increase the total project cost. Cost-sharing or Matching Addition 1/30/2018 When authorized, program income may be used to meet the grantee’s cost-sharing or matching requirement. The amount of the Forest Service funding remains the same. When authorized, program income may be added to the total cost of the project. The program income must be used for the purposes and under the conditions of the grant or cooperative agreement. 17

Program Income Alternative Examples: Deduction: Redistribute $1, 000 Block 18: Original Program Initial SF-424 Award Income a. Federal (80%) $4, 000 ($800) b. Applicant (20%) $1, 000 ($200) c. State 0 0 d. Local 0 0 e. Other 0 0 f. Program Income 0 0 g. TOTAL $5, 000 ($1, 000) 1/30/2018 Final Contribution $3, 200 $800 0 0 $4, 000 Original Award $4, 000 $1, 000 0 0 $5, 000 Cost-Sharing: Redistribute $1, 000 Program Final Income Contribution $0 $4, 000 ($1, 000) $0 0 0 0 0 ($1, 000) $4, 000 Addition: Redistribute $1, 000 Original Program Final Award Income Contribution $4, 000 $0 $4, 000 $1, 000 $2, 000 0 0 0 $5, 000 $1, 000 $6, 000 18

In-kind Contributions Non-cash contributions from third parties that are used in the project, such as volunteer labor, labor supplied by a third party at no cost to the grantee, donated supplies and equipment, and donated buildings. Any contribution from the grantee will be considered a cash contribution, unless the grantee did not pay for it in some manner. 1/30/2018 19

If you have any questions, please contact: spf-reports@fs. fed. us (907) 743 -9462 (AK) (360) 956 -2298 (OR or WA) Thank you for attending today! 1/30/2018 20

Any questions about “Allowable Costs”? 1/30/2018 21