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Allowable Costs

The Office of Grant and Contract Accounting is responsible for auditing expenses charged to sponsored agreements for allowability. The guidelines for determining if a cost is allowable come from the following sources:

Cost Share Information

Cost sharing (or "matching") is defined by OMB Circular A-110 as "...that portion of the project not borne by the sponsor..." Many granting agencies require that the costs of a grant project be shared between the sponsor and the awardee. Some programs expect the grantee to match the sponsor's resources in a specific proportion (e.g. 1:1 or 2:1, etc.). Other programs simply require evidence of some cost sharing.

To qualify as cost sharing, a cost must be verifiable from the recipient's records. The costs used may not be obtained from federal sources nor can they be costs used for match on any other grant. The cost must be allowable under OMB Circular A-21. If cost sharing is offered and accepted, it must be tracked and reported.

Costs which are generally allowable for cost sharing or matching include:

  • Salaries—Salaries and fringe benefits for faculty or staff members may be used as cost share to the extent of each individual's contribution to the project. The value assigned as match will be actual salary received times the percent of effort on the project. All estimates should be based upon actual current salary amounts.

  • Graduate Student Tuition—When graduate research or teaching assistants are involved in a sponsored project, their tuition waiver can usually be used to meet matching requirements. Since the dollar amount of credit received for this waiver can vary significantly depending on residence status and number of enrolled credit hours, care must be taken in estimating the amount of this match.

  • Operating Expenses—New equipment, supplies, travel expense and other support may be provided by the University or other non-federal sources and count toward matching requirements. Actual costs will have to be documented to assign a value to this type of match.

  • Facilities and Administrative Costs—Unrecovered facilities and administrative costs can often be included as part of a matching commitment. This may include F&A costs on grant dollars as well as University matching expenses (such as salaries).

Grantees may exceed the matching requirement of a grant. However, if a grantee does not contribute sufficient match, the agency support may be reduced proportionately to maintain required matching ratios. Therefore, caution must be exercised in estimating all cost share amounts.

If an agency does not require matching, you may wish to include a summary of University commitments in the project narrative without assignment of a dollar value. Any cost share offered in a grant proposal becomes a binding commitment to that agreement even if the agency did not originally require such support.

Federal Property Management

The Federal Property Management Procedure Guide provides basic procedures for the management of federal property under North Dakota State University’s control.  The manual describes the system used for the acquisition, records, maintenance, physical inventory, control and disposition of facilities and property of North Dakota State University (NDSU), the United States Government and various other grantee agencies.  The manual complies with Federal Acquisition Regulation (FAR), OMB Circular A-110, OMB Circular A-21, DoD Property Administration Guidelines, State of North Dakota Century Code, North Dakota University System State Board of Higher Education (SBHE) policies and NDSU Policy 819.

Fly America Act

Those individuals utilizing a grant or contract fund for the purchase of airline tickets should take note of the Fly America Act. The Fly America Act (49 U.S.C. Section 40118) requires federal government financed air transportation to be "provided by" air carriers holding certificates of public convenience and necessity as U.S. flag air carriers. This requirement is applicable to all federal and federal flow through Grants, Cooperative Agreements and Contracts, for either domestic or international travel.

If you are planning on any travels or are making arrangements for someone to travel on a Grant Cooperative Agreement or Contract, the Fly America Act may be applicable to the arrangements. It is important to note this will have a direct effect on international travel, but may also create problems for domestic travel.

The Comptroller General issued a decision regarding the Code Sharing (Airline Alliances) of flights by U.S. and foreign flag carriers utilizing the equipment of the foreign flag carrier. If a U.S. flag air carrier has an arrangement to provide passenger service in international air transportation on the aircraft of a foreign air carrier under a "code-share" arrangement with a foreign air carrier this could meet the requirement of the Fly America Act. The key to meeting the requirements appears to be whether the ticket is purchased through the U.S. air carrier. If the ticket is issued through the U.S. air carrier, it would be eligible for reimbursement. However, if the ticket were issued by a foreign air carrier, even under a code sharing arrangement, the ticket may not be eligible for reimbursement on a Federal Grant, Cooperative Agreement or Contract. Caution in making arrangements for foreign travel is warranted.


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North Dakota State University
Phone: +1 (701) 231-8357 / Fax: (701) 231-9414
Campus address: SGC 100
Physical/delivery address: 1919 University Dr N, Fargo, ND 58102
Mailing address: NDSU Dept. 3130 / PO Box 6050 / Fargo, ND 58108-6050
Page manager: Grant and Contract Accounting

Last Updated: Tuesday, December 10, 2013 11:57:48 AM