As defined in the Uniform Guidance, §200.405, “a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” When costs benefit two or more awards, the benefit for each award and the allocation methodology used to charge each award must be documented. Recent audits highlight the importance of this documentation.
The new Cost Allocation Methodology Best Practices reference guide is now available on the Controller’s Office website. Anyone involved in sponsored award financial transactions should review and follow these best practices for determining and documenting allocation methodologies.
If you have questions, contact CGA Compliance.