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Code of Federal Regulations Pertaining to U.S. Department of Labor |
| Employees' Benefits |
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| Employment and Training Administration, Department of Labor |
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| General Provisions Governing Programs Under Titles I, II, and III of the Act |
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| Administrative Standards |
20 CFR 627.435 - Cost principles and allowable costs.
- Section Number: 627.435
- Section Name: Cost principles and allowable costs.
(a) General. To be allowable, a cost shall be necessary and
reasonable for the proper and efficient administration of the program,
be allocable to the program, and, except as provided herein, not be a
general expense required to carry out the overall responsibilities of
the Governor or a governmental subrecipient. Costs charged to the
program shall be accorded consistent treatment through application of
generally accepted accounting principles
appropriate to the JTPA program, as determined by the Governor.
(b) Whether a cost is charged as a direct cost or as an indirect
cost shall be determined in accordance with the descriptions of direct
and indirect costs contained in the OMB Circulars identified in DOL's
regulations at 29 CFR 97.22(b).
(c) Costs allocable to another Federal grant, JTPA program, or cost
category may not be shifted to a JTPA grant, subgrant, program, or cost
category to overcome fund deficiencies, avoid restrictions imposed by
law or grant agreements, or for other reasons.
(d) Applicable credits such as rebates, discounts, refunds, and
overpayment adjustments, as well as interest earned on any of them,
shall be credited as a reduction of costs if received during the same
funding period that the cost was initially charged. Credits received
after the funding period shall be returned to the Department as provided
for at Sec. 627.490(b).
(e) The following costs are not allowable charges to the JTPA
program:
(1) Costs of fines and penalties resulting from violations of, or
failure to comply with, Federal, State, or local laws and regulations;
(2) Back pay, unless it represents additional pay for JTPA services
performed for which the individual was underpaid;
(3) Entertainment costs;
(4) Bad debts expense;
(5) Insurance policies offering protection against debts established
by the Federal Government;
(6) Contributions to a contingency reserve or any similar provision
for unforeseen events;
(7) Costs prohibited by 29 CFR part 93 (Lobbying Restrictions) or
costs of any salaries or expenses related to any activity designed to
influence legislation or appropriations pending before the Congress of
the United States; and
(8) Costs of activities prohibited in Sec. 627.205, Public service
employment prohibition; Sec. 627.210, Nondiscrimination and nonsectarian
activities; Sec. 627.215, Relocation; Sec. 627.225, Employment
generating activities; and Sec. 627.230, Displacement, of this part.
(f)(1) The cost of legal expenses required in the administration of
grant programs is allowable. Legal expenses include the expenses
incurred by the JTPA system in the establishment and maintenance of a
grievance system, including the costs of hearings and appeals, and
related expenses such as lawyers' fees. Legal expenses does not include
costs resulting from, and after, the grievance process such as fines and
penalties, which are not allowable, and settlement costs, which are
allowable to the extent that such costs included in the settlement would
have been allowable if charged to the JTPA program at the time they were
incurred.
(2) Legal services furnished by the chief legal officer of a State
or local government or staff solely for the purpose of discharging
general responsibilities as a legal officer are unallowable.
(3) Legal expenses for the prosecution of claims against the Federal
Government, including appeals to an Administrative Law Judge, are
unallowable.
(g) Costs of travel and incidental expenses incurred by volunteers
are allowable provided such costs are incurred for activities that are
generally consistent with section 204(c)(6) of the Act.
(h) Contributions to a reserve for a self-insurance program, to the
extent that the type and extent of coverage and the rates and premiums
would have been allowed had insurance been purchased to cover the risks,
are allowable.
(i) The Governor shall prescribe and implement guidelines on
allowable costs for SDA, SSG, and statewide programs that are consistent
with the cost principles and allowable costs provisions of paragraphs
(a) through (h) of this section and that include, at a minimum,
provisions that specify the extent to which the following cost items are
allowable or unallowable JTPA costs and, if allowable, guidelines on
conditions or the extent of allowability, documentation requirements,
and any prior approval requirements applicable to such cost items:
(1) Compensation for personal services of staff, including wages,
salaries, supplementary compensation, and fringe benefits;
(2) Costs incurred by the SJTCC, HRIC, PIC's, and other advisory
councils or committees;
(3) Advertising costs;
(4) Depreciation and/or use allowances;
(5) Printing and reproduction costs;
(6) Interest expense;
(7) Expenditures for transportation and travel;
(8) Payments to OJT employers, training institutions, and other
vendors;
(9) Fees or profits;
(10) Insurance costs, including insurance coverage for injuries
suffered by participants who are not covered by existing workers'
compensation, and personal liability insurance for PIC members;
(11) Acquisitions of capital assets;
(12) Building space costs, including rent, repairs, and alterations;
(13) Pre-agreement costs;
(14) Fund-raising activities;
(15) Professional services, including organizational management
studies conducted by outside individuals or firms; and
(16) Taxes.
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