Is OMB Circular A-87 mandatory for use by state government?
Yes. Paragraph 3, Section A, Attachment A of the Circular states that these principles will be applied by all federal agencies in determining costs incurred by governmental units under federal grants, cost reimbursement type contracts, and cooperative agreements (including sub grants and subcontracts) except those with (1) publicly-financed educational institutions subject to OMB Circular A-21, and (2) programs administered by publicly-owned hospitals and other providers of medical care that are subject to requirements promulgated by the sponsoring federal agencies. “Governmental units,” as used in the paragraph above, includes state departments.
