What are allowable costs, and why should I care?
A cost is allowable if it is reasonable, allocable, and treated consistently, and if it conforms with Circular A-21, Cost Principles for Educational Institutions, as well as the terms of the specific grant or contract involved. For instance, costs may be allocable, but unallowable based on Circular A-21. All the criteria must be met before a cost is deemed allowable. With regard to costs deemed unallowable per the federal regulations, the University is required to code those costs as unallowable for purposes of the Facilities & Administrative (Indirect) Cost Rate Study. The federal regulations do not restrict the University in procuring such goods or services. You should be concerned that you are coding allowable and unallowable expenses appropriately to ensure that MUSC recovers all allowable expenses, and that there is no impropriety that could result in penalties for the University and, in some cases, the individual. For more information, see the Direct and Indirect Costing Policies
