Policy on Allowable Expenses for Sponsored Funds
I. POLICY STATEMENT.
It is Occidental College’s (the “College”) policy to comply with all terms and conditions of Federal and non-Federal sponsored awards with respect to financial management of awarded funds. The purpose of this policy is to ensure compliance with sponsor regulations, terms, and conditions. Adherence to this policy will ensure that awarded funds are accounted for in accordance with the sponsor’s requirements and that expenditures are reviewed to ensure they are appropriate and serve the intended objectives of the award.
II. APPLICABILITY.
This policy applies to the spending and accounting of any funds awarded by extramural funders (Federal and non-Federal).
III. DEFINITIONS.
Allocable - An expense is allocable if it provides direct benefit to the project and can be specifically tied to the project. Costs may be allocable to multiple projects in approximated proportion to the benefits received using reasonable methods .
Allowable - Factors to determine whether an expense is allowable are whether the expense is
- Allocable, Reasonable, and necessary to the project.
- Consistently Treated.
- Compliant with laws, regulations, and grant terms.
- Adequately documented.
Consistently Treated - All expenses incurred for the same purpose and in like circumstances must be treated uniformly either as direct expenses or as indirect (facilities and administrative or F&A) expenses through application of those generally accepted accounting principles appropriate to the circumstances. For example, a cost must not be assigned to an award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the award as an indirect cost (e.g., administrative salaries, general office supplies).
Reasonable - An expense is considered reasonable if the nature of the goods or services, and the price paid for the goods or services, reflects the action that a prudent person would have taken given the prevailing circumstances at the time the decision to incur the expense was made. The expense must be able to withstand public scrutiny, i.e., objective individuals not affiliated with the College would agree that an expense is appropriate on an award.
IV. POLICY.
An expense can be charged to an award only if it is: Allowable, Reasonable, and Allocable. In addition, the expense must be Consistently Treated by the award recipient, and adhere to sponsor regulations, terms, and conditions; specific award terms and conditions; and College policies.
Unallowable expenses due to sponsor regulations, terms, and conditions and/or College policies, typically include:
- Alcoholic beverages
- Entertainment
- Fundraising or lobbying costs
- Fines and penalties
- Membership fees
- Personal expenses
- Certain travel costs, such as first-class travel
The Principal Investigator (PI)/Project Director (PD) has primary oversight to ensure that all expenses, charges, and budget revisions are made in accordance with the terms and conditions of the award and cost principles outlined in this policy.
All employees share the responsibility for preventing, detecting, and reporting fraudulent and/or dishonest acts. Consistent with the College’s Whistleblower Policy, employees may report (anonymously or not) suspected wrongdoing using this . Any misuse of College or sponsored funds may result in disciplinary action, up to and including termination of employment and may subject the perpetrator to legal action by the Sponsor and/or College.
Consistent with , the College prohibits reprisal against employees for disclosing information that they reasonably believe is evidence of gross mismanagement of a federal contract or grant, a gross waste of federal funds, an abuse of authority relating to a federal contract or grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal contract or grant.
The College has adopted the Uniform Guidance (Office of Management and Budget (“OMB”), Title 2, Subtitle A, Chapter ll of the Code of Federal Regulations, Part 200 – Uniform Administrative Requirements, ) as best practices and has incorporated this guidance into the College’s policies and procedures for all grants and contracts. However, should individual Federal or non-Federal awards and agreements require procedures that differ from the Uniform Guidance, then the College must comply with that agreement.
V. POLICY HISTORY.
Responsible Officer(s): Director of Sponsored Research
Responsible Office: Office of Sponsored Research
Effective Date: April 10, 2023
Last Revised Date: February 13, 2026