Costs charged to a sponsored project are subject to the requirements outlined in PSU's Sponsored Awards Charging Policy 

Consistent with the OMB Uniform Guidance, 2 CFR 200, Subpart D – 200.300 and 200.309 Period of Performance, PSU defines unallowable costs in the context of either a particular type of activity, a particular type of expenditure, or other factors specific to an award or sponsor. Unallowable costs cannot be charged either directly or indirectly to the federal government.  PSU adheres to the requirements of 2 CFR § 200.413(e) for treatment of unallowable costs in determining indirect cost rates.

Unallowable Activities

Unallowable activities where the function is prohibited from reimbursement by federal cost principles include:

• Alumni activities

• Organized fundraising

• Lobbying

• Commencement and Convocation

• General public relations and alumni activities

• Student activities such as intramural activities and student clubs

• Managing investments solely to enhance income

• Prosecuting claims against the federal government

• Defending or prosecuting certain criminal, civil, or administrative proceedings

• Housing and personal living expenses of Institute officers

• Selling or marketing of goods and services (does not include selling goods or services internal to the Institute by its service centers)

Unallowable Transactions

Unallowable transactions where the expenditure  for is for an item that is prohibited from reimbursement by federal cost principals include:

• Advertising (only certain types are allowable)

• Alcoholic beverages

• Entertainment

• Fundraising or lobbying costs

• Fines and penalties

• Memorabilia or promotional materials

• Relocation costs if employee resigns within 12 months

• Certain recruitment costs, such as color advertising

• Certain travel costs, such as first-class travel

• Cash donations to other parties, such as donations to other universities

• Interest payments, except certain interest specifically coded as paid to outside parties and authorized by the Office of Finance

• Membership in civic, community, and social organizations or in dining and country clubs (seldom reimbursable by MIT)

• Goods or services for the personal use of employees, including automobiles

• Insurance against defects in MIT’s materials or workmanship

• Bad debt expense

• First class travel

Other Considerations

PSU may identify other award costs as unallowable based on consideration of:

• The sponsor’s policies;

• The award’s terms and conditions;

• University policies and procedures; and

• Facts and circumstances associated with a particular award.