Big Four Cost Principles 

(Read the PI article)

  1. Reasonable:   A cost is considered reasonable if it is necessary for the performance of the sponsored award, and if its nature and amount reflect the actions a prudent person would take under the circumstances prevailing at the time the cost was incurred.
  2. Allocable:  A cost is allocable to a particular award if the goods or services involved can be directly charged to the award based on the benefit provided.
  3. Allowable:   A cost is allowable if it is permitted as a cost within general federal and state regulations, the terms of a specific award, and/or the institution's F&A rates.
  4. Consistently Treated:   All costs incurred for the same purpose and in like circumstances must be treated uniformly either as direct costs or as indirect (facilities and administrative or F&A) costs.

 

Cost Allowability Guide

The table below is intended only as a general guide. Always consult the specific terms and conditions of your award, as they ultimately determine cost allowability. 

(Download as .PDF)

 Expense TypeAllowable CostsUnallowable CostsNotes /Special Conditions
🖇Administrative & Clerical salariesIf integral to the project, identified in the budget,
and approved
Routine/admin salaries not meeting criteriaRequires justification and prior approval.
📢Advertising & Public RelationsRecruitment, procurement ads, and award-related
outreach
General promotional adsMust be explicitly budgeted and linked to award purpose
🍽Business Meals & AlcoholMeals within GSA rate for project travelAlcohol, meals above GSA rateAlcohol is generally unallowable under federal awards unless explicitly approved by the sponsor as part of an approved research protocol
💸Salaries (non-admin)Effort directly benefiting the projectSupplemental pay, unreasonable increasesEffort must be documented and certified; agency salary caps may apply (e.g., NIH).
💻Computer ServicesEssential, allocable, project-specific (typically under $5,000)General administrative/office use, personal use, or non- essential IT are considered indirect unless justifiedDirect charge allowed for dedicated research- computing only unless justified
🔬EquipmentSpecial purpose ≥ $5,000,
budgeted and approved
General-purpose equipment, late award-period purchasesCapitalization threshold = $5,000.  Late purchases in the award period may require justification or may be disallowed.
Fringe BenefitsAt negotiated rate, consistent with policyExcessive/unapproved benefitsMust use approved negotiated rate (ONR) and applied consistently across projects
📦Materials & SuppliesProject-specific, consumed during award.General Office suppliesMust be received and used within project period
🎓Participant Support CostsStipends, travel, registration, training
materials
Honoraria, incentives, employer reimbursement programsMust be pre-approved or budgeted and not paid to a GT employee
💼Professional Services (Consultants)Necessary, documented, reasonable external servicesGeorgia Tech employees cannot be paid as consultantsContract must define scope, deliverables and cost
📚Publication CostsAcknowledging the awardOmitting required
acknowledgements
Costs must be allocable to benefiting awards
Travel & AirfareEconomy class, baggage, Fly America-compliantUpgrades, alcohol, luxury services, post-award travelDocument agendas; submit expenses within 45 days from the end of trip.
🏢Service Center ChargesUsage-based, itemized bills, applied consistentlyUnreasonable or discriminatory chargesMust follow approved rates
🤝SubawardsBudgeted, approved,
collaborative scope, monitored.
Unbudgeted or unapproved by sponsor.Only first $25,000 subject to indirects; requires formal agreement and monitoring.
🚫General Unallowable CostsN/AEntertainment, lobbying, personal items, fines, penalties, bad debtImproper charges must be corrected promptly.  Gift cards and first class travel are commonly flagged unallowables.