Allowable / Unallowable Expenses on Grants
The question below was from Cold Spring Harbor Laboratories in April 2025. Answers from Amy & Ann are below.
(1) We are trying to get an understanding of how your group is allowing (or disallowing) certain types of expenses to post to grants. We have been asked to work on spend restrictions, given the option of implementing what is allowed to spend on a grant or what we would not want allowed to spend on a grant. For example, we can set up a liquor spend restriction on federal awards to disallow liquor to be charged. We were hoping to get feedback from our peers on if they chose this same approach, and if they managed by allowable spend (code what can be charged) or unallowable spend (code what cannot be charged). Our consultant has shared that we should steer away from using a mix of allowable and unallowable.
- We have mostly unallowed spend restrictions, but we also included some allowed spend restrictions. Our Huron consultant recommended using the Uniform Guidance for the main unallowed spend restriction so we have the following:
- “UG Unallowed” (which just includes the list from the Uniform Guidance) which we use for most of our awards, plus we have other lists such as “Equipment Unallowed”, “Animal Care Unallowed”, “Meals and Events and Catering Unallowed”, “Travel Unallowed”, etc., which we can add to the “UG Unallowed” as applicable.
- For the allowed (only) spend restrictions we sometimes use “Only Fellowship Stipend Allowed”, “Only Travel Allowed”, etc. which we only use for specific awards/fellowships.
- More than one spend category can be used as necessary.
- And for the outgoing subawards off an NIH P01 award for example, our Huron consultant recommended that we use “Only Subawards Allowed”. This only allows subaward invoices to be applied to a subaward, so that nothing else can be accidentally applied to that specific account.
Allowable costs:Below is the blurb from our audit process document related to spend restrictions for Awards set up. As Amy said, we have different restrictions that use either allowable or unallowable.
Allowable costs for Awards (Award Lines) are controlled by the assignment of Spend Restriction profiles, as noted in Appendix A. These profiles are set up via Create Spend Restriction. They can be set up as either Allowable or Unallowable. If there are few restrictions Unallowable is simpler to maintain (i.e. all except). If the spending is restricted to just a few types of costs, Allowable is simpler to maintain. The restriction can be done by either Object Class (*) or Spend Category and Pay Component (see Payroll narrative for more information regarding pay components). The proper Spend Restriction profile to assign to an Award Line is determined by the set up sheet provided by Pre-Award which reflects the Sponsor agreement terms (See further detail in Appendix A).
Here are some of the spend restrictions that we have set up.
