Allowable, Allocable, and Reasonable Costs Policy Number and Last Update (01.09.04e/03-2015)
Costs must be determined to be allowable, allocable, and reasonable before they are charged to a Head Start grant.
- A delegate agency with more than one program and funding source must use a cost allocation plan that meets the requirements of ACYF-IM-HS-01-06. The delegate Head Start director is responsible for developing this plan. The fiscal coordinator assigns costs according to the plan, and the check co-signer assures that all Migrant & Seasonal Head Start expenditures are correctly allocated to the contract.
- Before signing a purchase requisition, the director ensures that it meets each of the three (3) criteria for payment. (If a requisition does not meet the requirement, the director aborts the purchase, or assigns it to a different funding source.)
- The fiscal coordinator reviews all purchase requisitions for allowability, allocability, and reasonableness according to 2 CFR 200 and 45 CFR 75. If a requisition does not meet the criteria, the coordinator returns it to the director without signing/initialing and without ordering. In such a case, the fiscal coordinator advises the director, and documents for the file, allowability problems.
- Co-signers of agency checks assure that Head Start costs meet requirements for allowability, allocability, and reasonableness.
- Delegate agency personnel may contact the grantee director or fiscal manager for technical assistance in determining whether a cost is allowable, allocable, or reasonable.
- The grantee fiscal manager will perform a desk audit of each delegate monthly expenditure report, testing every item for allowability, allocability, and reasonableness, according to 2 CFR 200 and 45 CFR 75. Any expenditure which fails to meet the requirements will be disallowed with the approval of the grantee director.
- The grantee officer, following department procedures, will recover disallowed expenses.