Note: Revised April 28, 2011, to replace references to OMB Circulars that have been codified in Chapter 2 of the Code of Federal Regulations (2 CFR).
The U.S. Office of Management and Budget (OMB) establishes the regulations which must be used to administer Federal grants. The USDOT's regulation in 49 CFR 18.22 refers to applicable OMB circulars to determine allowable costs. The OMB circulars have been codified in Title 2 Grants and Agreements.
|For the costs of a||Use the principles in|
|State, Local or Indian Tribal Governments||2 CFR 225|
|Private, nonprofit organization other than an (1) institution of higher education, (2) hospital, or (3) organization named in 2 CFR 230 as not subject to that circular.||2 CFR 230|
|Educational institutions.||2 CFR 220|
|For-profit organization other than a hospital and an organization named in 2 CFR 230 as not subject to that circular.||48 CFR Part 31. Contract Cost Principles and Procedures, or uniform cost accounting standards that comply with cost principles acceptable to the Federal agency.|
In general, costs are allowable, as specified in the appropriate cost principles, if the costs are necessary, reasonable, and benefit this grant program. Examples of unallowable costs are those for purposes not related to this program.
2 CFR 225 has the Cost Principles for State, Local, and Indian Tribal Governments.
See also FHWA's Policy on Indirect Costs.