General Budget Preparation
Is it Allowable & Allocable?
Funding from awards must be expended in accordance with governing regulations and agency policy. Pre-award reviews budgets to determine costs are allowable, allocable, and appropriate to grants in accordance with Uniform Guidance, the agency’s policies and guidelines, and institutional policy.
| A cost is allowable when: | A cost is allocable when: |
|---|---|
| It serves a University business purpose, including instruction, research, and public service. | It is incurred solely to advance the work under the sponsored agreement. |
| It is permissible according to UTHealth policy and federal regulations (regardless of whether it is a sponsored project). | It benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through use of reasonable methods. |
| It is permissible (for a sponsored project) according to the terms and conditions of the agreement. | It benefits both the sponsored agreement and other work of the institution, in proportions that can be approximated through use of reasonable methods. |
It complies with the rules for allowability as covered in Uniform Guidance, which dictates that costs must be reasonable. A cost is reasonable when:
|
It is necessary to the overall operation of the institution and, in accordance with Uniform Guidance, is deemed to be assignable in part to sponsored projects. |
Costs must be given consistent treatment through application of those generally accepted accounting principles (GAAP) appropriate to the circumstances.
All costs incurred on a grant must conform to any limitations or exclusions in Uniform Guidance or the sponsored agreement.
PIs should work with their departmental administrative officials to develop a budget which ensures all costs in the budget are fair and reasonable for a research project in accordance with UG, agency policies and guidelines, and institutional policy.
Resources for Determining Allowable Cost
Calculating Salaries - Use this guide to help calculate appropriate salaries on grants and contracts.