Tracking Non-Reimbursable (Unallowable) Costs for the F&A Rate Proposal

What are Non-reimbursable Costs?

Expenses deemed non-reimbursable by the federal government either as:

  • Direct costs on grants or
  • Indirect costs included in F&A rates.

Listed in detail in Section J of A-21i, and include such things as:

  • Advertising
  • Fundraising and lobbying costs
  • Entertainment

Why do we Track Non-reimbursable Costs?

  • We must demonstrate to federal reviewers that the calculations leading to our proposed F&A rate do not include non-reimbursable expenditures.
  • “Non-reimbursable” costs are posted primarily to non-research budgets classified in F&A categories.
  • MAAi removes reported non-reimbursable costs from the F&A rate proposal.

How Should Non-reimbursable Costs be Tracked?

  • Refer to a description of A-21 non-reimbursable costs expenditures:
  • Review all state, gift, and RCR budgets for any unallowable activity.
  • As part of monthly reconciliation process, highlight any unallowable activity.
    • PCA codes
    • MyFD reconciliation comment field
    • Existing internal reconciliation processes

Other Considerations

  • What about sponsored budgets and discretionary (64-budgets):
    • Expenses on sponsored budgets are assumed allowable.
    • Expenses on 64-budgets assumed are non-reimbursable.
  • Who should review and update budget classifications?
    • Departmental representatives with first hand knowledge of:
      • Nature of expenses, and
      • Clear understanding of A-21 non-reimbursable definitions
  • When should transactions be reviewed?
    • Throughout FY 2013 as part of regular budget review process.
    • MAA will follow-up with departments in early fall 2013.

What Documentation is Required?

  • We recommend you keep back-up:
    • For budget cost category review – notes that support your review
    • For non-reimbursable expenditures – e.g., notes in the comments field in MyFD (“NRA”)
    • Keep back-up in your departmental files
  • Keep in mind that the proposal will be reviewed by the HHS negotiators months after you make these determinations.  
  • What will help you remember what you did?

What Time Period Should be Used?

  • The proposal is based on a full fiscal year of costs and activities (FY 2013).
  • All non-reimbursable costs recorded during FY 2013 should be tracked and reported to MAA.
  • FY 2013 is July 1st, 2012 through June 30th, 2013 (aka, the “FY 2013 F&A Base Year”)

When Should This be Completed?

  • Monitor space inventory, cost categories, and non-reimbursable costs throughout the fiscal year and document as changes are needed.  
  • When does MAA need the data?
    • Space inventory: December 2012 updated through June 2013
    • Budgeti review: May 2013
    • Non-reimbursable costs: August 2013
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