• This chapter is intended as guidance for subgrantees in determining whether costs are appropriate charges to subgrant projects. The subgrantee must keep in mind that even though an item listed below may be considered an allowable cost, the particular cost may not be considered an allowable cost if it falls outside the scope of the project as outlined in the subgrant agreement unless an amendment has been approved by the State Historic Preservation Office. Those items listed as unallowable costs below will not be reimbursed if charged to the subgrant project by the subgrantee.



• When questions arise concerning the allowability of cost, the subgrantee should seek the advice of the State Historic Preservation Office.

1. Accounting. The cost of establishing and maintaining accounting and other information systems required for the management of grant programs is allowable.
2. Advertising. Advertising media includes newspapers, magazines, radio and television programs, direct mail, trade papers, and the like. The advertising costs allowable are those used solely for:
   1. Recruitment of personnel necessary for the subgrant project.
   2. Solicitation of bids for the procurement of goods and services required for performance under the subgrant.
   3. Notices required by Federal or State regulations pertaining to the HPF program; and
   4. Other purposes specifically provided for in the subgrant agreement.
3. Advisory councils. The cost of like organizations, such as local review boards established by "certified local governments" is allowable when provided for in the subgrant agreement.
4. Appraisals. The cost of necessary appraisals is allowable.
5. Audit service. The cost of audits necessary for the administration and management of functions related to grant programs is allowable.
6. Communications. Communication costs incurred for telephone calls or service, teletype service, wide area telephone service (WATS), centrex, telepak (tie line), postage, messenger service, and similar expenses necessary for and directly related to the subgrant program operations are allowable.
7. Equipment and other capital expenditures. Any article of nonexpendable tangible personal property having a useful life of more than 1 year and an acquisition cost of $300 or less is allowable, when necessary for grant program operations with the State Historic Preservation Office approval.
8. Exhibits. Costs of temporary exhibits relating specifically to HFP grant-assisted program operations, accomplishments, or results are allowable.
9. Indirect costs. Indirect costs are allowable only in accordance with the applicable indirect cost principles and when based on a current approved or provisional rate awarded by the cognizant Federal agency to the subgrantee.
10. Legal expenses. The cost of legal expenses required in the administration of HPF grant programs is allowable. Legal services furnished by the chief legal officer of a State or local government or his staff solely for the purpose of discharging his general responsibilities as legal officer are unallowable. Legal expenses for the prosecution of claims against the Federal Government are unallowable.
11. Materials and supplies. The cost of materials and supplies necessary to carry out the HPF Grant program is allowable. Purchases made specifically for the grant program should be charged at their actual prices after deducting all cash discounts, trade discounts, rebates, and allowances received by the subgrantee. Withdrawals from general stores or stockrooms should be charged at cost under any recognized method of pricing consistently applied. Incoming transportation charges are a proper part of material cost. Materials and supplies charges as a direct cost must include only the materials and supplies actually used for the performance of the contract and grant, and due credit should be given for any excess materials or supplies retained or returned to vendors.
12. Memberships, subscriptions, and professional activities.
    1. Memberships. The cost of membership in civic, business, technical, and professional organizations is allowable provided the SHPO has given written approval and:
       1. The benefit from the membership is directly related to achieving grant program objectives;
       2. The expenditure is for agency membership;
       3. The cost of the membership is reasonably related to the value of the services or benefits received; and
       4. The expenditure is not for membership in an organization which devotes a substantial part of its activities to influencing legislation.
    2. Reference material. The cost of books and subscriptions to civic, business, professional and technical periodicals is allowable when necessary to accomplish grant program purposes.
    3. Meetings and conferences. Costs are allowable when the primary purpose of the meeting is in the dissemination of information relating to the grant program and when they are consistent with regular practices followed for similar activities of the state.
13. Page charges in scientific or professional journals. Page charges for scientific or professional publications are allowable as a necessary part of grant cost where:
    1. The papers report work supported by the HPF grant and acknowledge the grant.
    2. The charges are levied impartially on all papers published by the journal, whether by non-government or by Government authors; and
    3. There will be significant and direct benefit to the achievement of the HPF grant program objectives.
14. Printing and reproduction. Costs of printing and reproduction services necessary for grant administration, including but not limited to forms, reports, manuals, and informational literature, are allowable. Publication costs of reports or other media relating to HPF grant program accomplishments or results are allowable when provided for in the subgrant agreement. (See "Publications")
15. Procurement service. The cost of procurement service, inluding solicitation of bids, preparation and award of contracts, and all phases of contract administration in providing goods, facilities and services for the grant program, is allowable.
16. Professional and consultant service costs. Costs of professional and consultant services are allowable if called for in the subgrant agreement.
17. Public information services costs. Public information services costs include the costs associated with newsletter, pamphlets, news releases, films, videotapes, and other forms of HPF program-related information services.
    1. Allowable costs are those normally incurred to:
       1. Inform or instruct individuals, groups, or the general public about statewide and local historic preservation accomplishments, problems, and issues, directly related to HPF grant-supported activities;
       2. Interested individuals and organizations in participating in HPF grant-supported programs of the subgrantee;
       3. Provide necessary stewardship reports to State and local government agencies, contributing organizations, and the like;
    2. Publication services costs necessary to comply with grant supported program and project requirements, such as completion reports, publications undertaken at the written direction of the SHPO.
18. Research. Costs of historical, architectural, and archeological research necessary for project accomplishment are allowable. Purely archival research is unallowable.
19. Transportation. Costs incurred for freight, cartage, express postage, and other transportation costs relating to goods either purchased, delivered, or moved from one location to another are allowable when necessary for and directly related to the HPF grant program.
20. Travel. Travel costs are allowable for expenses for transportation, lodging, subsistence, and related items incurred by employees who are in travel status on official business incident to the HPF grant program. Such costs must be consistent with the policies of the State or Federal government, whichever is more restrictive.

1. Archival Research. Costs of purely archival research are unallowable.
2. Bad debts. Any losses arising from uncollectible accounts and other claims, and related collection costs, are unallowable.
3. Bonus payments. Bonus payments of any kind are unallowable.
4. Contingencies. Contributions to a contingency reserve or any similar provision for unforeseen events are unallowable.
5. Contributions and donations.
   1. Charitable contributions and donations of grant funds are allowable.
   2. The value of services donated by employees or other persons paid with HPF grant funds or other Federal funds is unallowable.
   3. Donated goods (i.e., expendable personal property/supplies and donated use of space) may be furnished to grantee, subgrantee, or grant-supported contractor. The value of the goods and space is not reimbursable as a direct or indirect cost. The value of the donations may be used to meet matching share requirements under the conditions described in Chapter 3. The value of the donations shall be determined in accordance with Chapter 3.
6. Curation. Costs of curation or exhibition of artifacts or other materials after the project end date are unallowable.
7. Damage judgments. Damage judgments arising out of acquisition, construction, or equipping of a grant-assisted program or project site, whether determined by judicial decision or arbitration or otherwise, are unallowable grant costs.
8. Entertainment. Costs of amusements, social activities, and related incidental costs such as meals, beverages, lodgings, rentals, transportation, and gratuities are unallowable.
9. Equipment. Equipment and other capital expenditures are unallowable as indirect costs.
10. Federal properties. Costs related to federally owned properties are not eligible for HPF assistance. Note that the consolidated Rail Corporation is not an instrumentality of the Federal Government and is therefore eligible for grant assistance (see 45 USC 74lb.).
11. Fines and penalties. Costs resulting from violations of, or failure to comply with, Federal, State, and local laws and regulations are unallowable.
12. Fundraising. Expenses and costs of organized fundraising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions are unallowable.
13. HABS/HAER costs for Federal supervision. Payments of HPF grant funds to Federal officials supervising or otherwise administering HABS/HAER projects are not allowable.
14. Indirect costs to individuals. Indirect costs to individuals under subgrants and contracts are not allowable.
15. Interest and other financial costs. Interest on borrowing (such as mortgages or other loans, however represented), bond discounts, points, costs of financing and refinancing operations, mortgage insurance, credit reports, and legal and professional fees paid in connection therewith are unallowable, except when authorized by Federal legislation.
    
    Payment of interest penalties for late payment of bills to contractors is prohibited by the Prompt Payment Act (P.L. 97-177). The act specifies:

    "(A) in no case shall an obligation to pay such interest penalties be construed to be an obligation of the United States," and

    "(B) Any payment of such interest penalties shall not be made from funds provided to the grant recipient by a Federal agency, nor shall any non-Federal funds expended for such interest penalties be counted toward any matching requirement applicable to that grant."

16. Lobbying. Costs associated with activities or any form of communication designed to influence in any manner a Member of Congress to favor or oppose any legislation or appropriation are unallowable.
17. Museums. Costs of museum exhibits, museum staff salaries, and other museum administrative expenses, including maintenance, are unallowable.
18. Nonconformance with applicable Secretary of the Interior's Standards. Work performed under grants, subgrants, or other contractual arrangements that do not conform to the applicable Secretary's Standards are unallowable costs.
19. Overdrafts or deficits. Bank charges for overdrafts or deficits are unallowable.
20. Prohibition on compensating intervenors. Compensation to any person intervening in any proceeding under the Act is unallowable.

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