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U.S. Department of Health and Human Services

Budget Summary: General Guidelines

The Budget Summary is used to determine reasonableness and allowability of costs for the project. All of the proposed costs listed, whether supported by Federal funds or non-Federal match, must be reasonable, necessary to accomplish project objectives, allowable in accordance with applicable Federal cost principles, auditable, and incurred during the budget period. 

Non-Federal Match:  (include when grant requires the match/cost sharing)

Matching funds provide support for the purpose and goals of this proposal and enhance the Federal budget request.  Applicant is required to provide a detailed listing of all match used to meet the match requirement.  In the narrative justification sections describe how the funds support the project and enhance the Federal budget. 
All funding used for match must be documented in the same manner as Federal funds. All match funds must follow the same cost principles and regulations that are used for Federal funds – to count as match you must be able to use Federal funds to purchase the item.
An allowable project cost is a cost that is:

  • Necessary for the performance of the award.
  • Allocable to the project.
  • In conformance with any limitations or exclusions set forth in the Federal cost principles applicable to the organization incurring the cost.
  • Consistent with the recipient’s regulations, policies, and procedures which are applied uniformly to both Federally-supported and other activities of the organization.
  • Accorded consistent treatment as a direct or indirect cost.
  • Determined in accordance with generally accepted accounting principles.
  • Not included as a cost in any other Federally-supported award.
The following four tests are used in determining the allowability of costs:

  • Reasonableness (including necessity). A cost is reasonable if it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The cost principles elaborate on this concept and address considerations such as whether the cost is of a type generally necessary for the organization’s operations or the grant’s performance, whether the recipient complied with its established organizational policies in incurring the cost or charge, and whether the individuals responsible for the expenditure acted with due prudence in carrying out their responsibilities to the Federal government and the public at large, as well as to their organization.
  • Allocability.  A cost is allocable to a specific grant, function, department, or other component, known as a cost objective, if the goods or services involved are chargeable or assignable to that cost objective in accordance with the relative benefits received or other equitable relationship. A cost is allocable if it is incurred solely to advance work under the grant; it benefits both the grant and other work of the organization, including other grant-supported projects or programs; or it is necessary to the overall operation of the organization and is deemed to be assignable, at least in part, to the grant.
  •  Consistency.  Recipients must be consistent in assigning costs to cost objectives. Regulations regarding cost assignment must be consistent for all work of the organization under similar circumstances, regardless of the source of funding, to avoid duplicate charges.
  • Conformance.  Conformance with limitations and exclusions contained in the Terms and Conditions of award, including those in the cost principles, may vary by the type of activity, the type of recipient, and other characteristics of individual awards.

  • This page last reviewed: November 20, 2017