Federal Cost Principles

All Costs Must –

¨  Be in accordance with generally accepted accounting principles

¨  Not included as a match

¨  Be of net applicable credits

¨  Be adequately documented

 

Necessary and Reasonable

Necessary and Reasonable –

¨  Must be necessary for the performance or administration of the grant

¨  Must follow sound business practices

¨  Fair market prices

¨  Act with prudence under the circumstances

¨  No significant deviation from established prices

 

Practical Aspects of Necessary –

¨  Do I really need this?

¨  Is this the minimum amount I need to spend to meet my need?

 

Practical Aspects of Reasonable –

¨  Do I have the capacity to use what I am purchasing?

¨  Did I pay a fair rate?

¨  If I were asked to defend this purchase, would I be comfortable?