Costs that cannot be charged to the Federal Government or included in the Facilities and Administrative (indirect) cost rate.


The Office of Management and Budget (OMB) Circular A-21 prohibits the University from charging Federally funded agreements or requesting Federal reimbursement for certain costs. A-21 refers to these costs as "unallowable costs" or "non-reimbursable" costs. However, for some of these costs, specific circumstances or cost attributes, which are described below, are allowable.

Since recharge and cost center rates are often charged to Federally sponsored budgets or programs, these non-reimbursable costs cannot be included in recharge rates charged to internal users or charged to the recharge center operating account.

If a facilities and administrative (indirect) cost proposal is being prepared, non-reimbursable costs must be identified when they occur in UW budgets to ensure they are not included in the University's F&A or indirect cost rates.

Unallowable Cost Categories (in alphabetical order)

Advertising (J.1.)

The only allowable advertising costs are:

  • Recruitment of personnel.
  • Procurement of goods and services.
  • Disposal of scrap or surplus materials.
  • Those advertising costs specifically required by a sponsored agreement.

Alcoholic beverages (J.3.)

Alcoholic beverages are unallowable, including beer, wine, and mixed alcoholic drinks. However, alcohol can be directly charged to a few sponsored projects if the nature of the research specifically requires the purchase and use of alcohol in the research, and the sponsor explicitly approves the cost.

Alumni activities (J.4.)

Costs incurred for, or in support of, alumni/alumnae activities and similar services are unallowable.

Bad debt expense (J.6.)

Any losses, whether actual or estimated, arising from uncollectible accounts and other claims, and any related collection and legal costs are unallowable.

Commencement and convocation costs (J.8.)

Costs incurred for commencement and convocations are unallowable.

Contingency provisions (J.11.)

Any contingency reserve or similar provision made for events, the occurrence of which cannot be foretold with certainty is unallowable.

Defense and prosecution of criminal and civil proceedings, claims, appeals and patent infringements (J.13.)

Generally, these costs are unallowable. The only exception is when the Federal government specifically authorizes the condition causing the action. For more information, contact MAA.

Donations or contributions (J.15.)

All donations and contributions made by the University, regardless of the recipient, are unallowable.

Entertainment (J.17.)

Costs of activities where the primary purpose is amusement, diversion (such as tickets to shows or sports events), or social activities, and any associated costs, such as transportation, meals, etc., are unallowable.

Fines and penalties (J.19.)

Costs resulting from violations of, or failure of the institution to comply with Federal, State, and local or foreign laws and regulations are unallowable. The only exception is when the Federal government authorizes, in advance, such payments.

Fund raising (J.20.)

Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions are unallowable. This includes salary, printing, room charges, travel, meals, and supply costs of fund raising.

Goods or services for personal use (J.22.), including housing and personal living expenses (J.23.)

All costs for goods or services for personal use by University employees, including housing expenses (e.g. depreciation, rent, maintenance, utilities, furnishings, etc.), housing allowances, and personal living expenses for University officers, are unallowable.

Insurance against defects (J.25.f.) and medical liability (malpractice) insurance (J.25.g.)

  • Costs for insurance against defects, including the costs of insurance or any other costs incurred to correct defects in the University's materials or workmanship, are unallowable.
  • If research involves human subjects, medical liability or malpractice insurance costs can only be directly charged to sponsored projects according to the risk of the population covered. Therefore, if medical liability or malpractice insurance costs occur on a budget classified as general or departmental administration for the purposes of the F&A proposal, they must be identified and reported to MAA when an F&A or indirect cost proposal is prepared.
  • If required by sponsored project, allowable general conduct of activities or other insurance costs are allowable.

Interest (J.26.)

The only allowable interest costs are those paid to an external party if associated with the following assets:

  • Buildings acquired or completed on or after July 1, 1982.
  • Major reconstruction and remodeling of existing buildings.
  • Capital assets acquired or replaced after May 8, 1996; subject to certain conditions.

Investment management (J.20.)

The only allowable investment management expenses are those incurred for the physical custody and control of monies and securities. Costs of investment counsel and staff and similar expenses incurred solely to enhance income from investments are unallowable.

Lobbying (J.28.)

In general, lobbying costs are unallowable, including activity that:

  • Improperly influences (influences on any basis other than the merits of the matter) an employee or officer of the Executive branch of the Federal government to give consideration or to act regarding a sponsored agreement or regulatory matter.
  • Attempts to influence the outcomes of any Federal, State, or Local election, referendum, initiative, or similar procedure, through in kind or cash contributions, endorsements, publicity, or similar activity.
  • Establishes, administers, contributes to, or pays the expenses of a political party, campaign, political action committee, or other organization established for the purpose of influencing the outcomes of elections.
  • Attempts to influence the introduction of Federal or State legislation, including:
    • The enactment or modification of any pending Federal or State legislation through communication with any member or employee of the Congress or State legislature, including efforts to influence State or Local officials to engage in similar lobbying activity, or
    • Any government official or employee in connection with a decision to sign or veto enrolled legislation, or
    • The enactment or modification of any pending Federal or State legislation by preparing, distributing, or using publicity or propaganda, or by urging members of the general public, or any segment thereof, to contribute to or participate in any mass demonstration, march, rally, fund raising drive, lobbying campaign or letter writing or telephone campaign.
  • Legislative liaison activities, including attendance at legislative sessions or committee hearings, gathering information regarding legislation, and analyzing the effect of legislation, when such activities are carried on in support of, or in knowing preparation for, an effort to engage in unallowable lobbying. Legislative liaison activities include:
    • Attendance at legislative sessions or committee hearings.
    • Gathering information regarding legislation.
    • Analyzing the effect of legislation.

A few lobbying costs are allowable if specifically related to the performance of a sponsored agreement.

  • Technical and factual presentations on topics directly related to the performance of a grant, contract, or other agreement.
  • Activities to influence State legislation in order to directly reduce the cost, or to avoid material impairment of the institution's authority to perform a grant, contract, or other agreement.

Losses on other sponsored agreements or contracts (J.29.)

Any excess of costs over income for any sponsored agreement or contract of any nature is unallowable. This includes, but is not limited to, the University's contributed portion by reason of cost-sharing agreements or any under-recoveries through negotiation of flat amounts for F&A costs.

Memberships, subscriptions and professional activity costs (J.33.)

Note: Membership and subscription costs must not be directly charged to sponsored agreements, unless unlike circumstances exist. For more information, see the University's Costing Policy.

  • The only allowable subscription costs are for subscriptions to business, professional, and technical periodicals.
  • Costs of meetings and conferences are only allowable when the primary purpose is the dissemination of technical information. This includes the costs of meals, transportation, rental of facilities, etc.
  • Membership in any civic or community organization, or in any country, social or dining club is unallowable. The only allowable membership costs are for a membership in business, technical, or professional organizations.

Preagreement costs (J.36.)

Unless approved by the sponsoring agency, preaward costs incurred prior to the effective date of the sponsored agreement, whether or not they would have been allowable if incurred after such a date, are unallowable.

Public relations (J.1.)

The only allowable public relations costs are those for the cost of:

  • Public relations specifically required by a sponsored agreement.
  • Conducting general liaison with news media to keep the public informed on matters of public concern, such as notices of financial matters, contract/grant awards, etc.
  • Communicating with public and press pertaining to specific activities or accomplishments resulting from the performance of sponsored agreements.

Selling and marketing (J.46.)

Costs of selling and marketing any services or products of the institution are unallowable, unless included in allowable advertising costs above (J.1.). Expenditures for the publication and distribution of student admissions information are included in this category (not allowable). However, recharge centers can create and distribute materials to inform internal or University users about the services and/or products they provide.

Student activity costs (J.48.)

Unless specifically allowed for in the sponsored agreement, costs incurred for intramural activities, student publications, student clubs, and other student activities are unallowable.

Travel costs (J.53.)

Airfare costs in excess of the lowest available commercial discount airfare, Federal Government contract airfare (where authorized and available), or customary standard (coach or equivalent) airfare, are unallowable except when such accommodations would: require circuitous routing; require travel during unreasonable hours; excessively prolong travel; greatly increase the duration of the flight; result in increased costs that would offset transportation savings; or offer accommodations not reasonably adequate for the medical needs of the traveler.