Allowable and Unallowable Summarized Costs and Activities
All Specialty Crop Block Grant Program (SCBGP) awards are subject to the terms and conditions,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,
and other considerations described in the most recent SCBGP Terms and Conditions of Award. All
costs must be allowable in accordance with the Federal cost principles outlined in 2 CFR part 200
Subpart E.
Sub-recipients and contractors under grants are subject to the requirements of the cost principles
otherwise applicable to their type of organization and the AMS-SCBGP’s General Award Terms and
Conditions.
Selected Cost Items
The following list summarizes allowable and unallowable costs in common categories project
budgets. This section is not intended to be all-inclusive. Reference Subpart E-Cost Principles of 2
CFR part 200 for a complete explanation of the allow ability of costs.
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Advisory Councils
ALL with
exceptions
Unallowable for costs incurred by advisory councils or
committees, unless specifically fulfilling the purpose or approved
activities of a grant program or project.
Alcoholic Beverages
ALL with
exceptions
Unallowable for alcoholic beverages unless the cost is associated
with fulfilling the purpose of the grant program and either
approved in the application or with prior written approval.
Buildings and Land –
Construction
ALL with
exceptions
Unallowable for the acquisition of buildings, facilities, or land or
to make new constructions, additions, improvements,
modifications, replacements, rearrangements, reinstallations,
renovations, or alterations of an existing building or facility
(including site grading and improvement, and architecture fees),
unless the cost is associated with fulfilling the purpose of the
grant program or with prior written approval. This also includes
construction-related materials, which may include, but are not
limited to, the purchase of building materials such as wood, nails,
concrete, asphalt, roofing, gravel, sand, paint, insulation, drywall,
or plumbing.
Allowable for rental costs of land and building space. However,
lease agreements to own (i.e., lease-to-own or rent-to-own) are
not allowable. The lease or rental agreement must terminate at
the end of the grant cycle.
A building is any permanent structure designed or intended for
support, enclosure, shelter, or protection of people, animals, or
property, and having a permanent roof supported by columns or
walls.
Conferences
ALL with
exceptions
Allowable if the conference fulfills the grant program’s purpose.
Allowable conference costs paid by the non-Federal recipient as a
sponsor or host of the conference may include rental of facilities,
speakers’ fees, costs of meals (see
Meals for restrictions), and
refreshments, local transportation, and other items incidental to
such conferences with the exception of entertainment costs that
are unallowable. If registration fees are collected, the recipient
must report fees as program income (see
Program Income).
Allowable to rent a building or room for training; however, where
appropriate, AMS encourages the use of technologies such as
webinars, teleconferencing, or videoconferencing as an
alternative to renting a building or a room. The recipient should
use the most cost-effective facilities, such as State government
conference rooms if renting a building or a room is necessary.
Contingency Provisions
ALL
Unallowable for miscellaneous and similar rainy-day funds for
events the occurrence of which cannot be foretold with certainty
as to the time or intensity, or with an assurance of their
happening. Unallowable for working capital for activities/items
not already in place.
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Contractual/Consultant
Costs (Professional
Services)
ALL
Allowable subject to limitations. Contractual/consultant costs
are expenses associated with purchasing goods and/or procuring
services performed by an individual or organization other than
the recipient in the form of a procurement relationship.
Allowable for contractor/consultant employee rates that do not
exceed the salary of a GS-15 step 10 Federal employee in the area
(for more information, visit the OPM
we
bsite) and travel that is
reasonable and necessary. This does not include fringe benefits,
indirect costs, or other expenses. If rates exceed this amount, the
recipient is required to justify the allowability of the cost aligning
with 2 CFR §§ 200.317-327.
Donations
ALL
Unallowable for contributions or donations, including cash,
property, and services, made by the recipient to other entities. A
nonfederal entity using grant funds to purchase food or services
to donate to other entities and/or individuals is unallowable.
Electronic Benefit
Transfer (EBT)
Machines
ALL
Unallowable for the purchase/lease of Supplemental Nutrition
Assistance Program (SNAP) EBT equipment.
Entertainment Costs
ALL with
exceptions
Unallowable for entertainment costs including amusement,
diversion, and social activities and any costs directly associated
with such costs (such as bands, orchestras, dance groups, tickets
to shows, meals, lodging, rentals, transportation, and gratuities).
Entertainment costs are defined in
2 CFR § 200.438.
Allowable where the specific cost is considered to meet the
requirements of the sponsored program and are authorized in
the approved budget or with prior written approval.
Equipment – General
Purpose
ALL
Unallowable for acquisition costs of general purpose equipment
or lease agreements to own (i.e., lease-to-own or rent-to-own).
Allowable for rental costs of general purpose equipment when
provided in the approved budget or with prior written approval.
‘General Purpose’ vehicles may not be purchased and may only
be leased with prior written approval (and only if specific to
fulfilling the purpose of the grant). The lease or rental agreement
must terminate at the end of the grant cycle.
For vehicle and equipment leases or rentals with an acquisition
cost that equals or exceeds $5,000, rates should be in light of
factors such as: rental costs of comparable vehicles and
equipment, if any; market conditions in the area; alternatives
available; and the type, life expectancy, condition, and value of
the vehicle or equipment leased.
Allowable if special purpose equipment (and NOT general
purpose equipment). Special purpose equipment is defined below
in this chart under “Equipment – Special Purpose.”
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Equipment –
Information
Technology Systems
and
Telecommunications
ALL
Unallowable for information technology systems having a useful
life of more than one year and a per-unit acquisition cost that
equals or exceeds the lesser of the capitalization level established
in accordance with GAAP by the recipient for financial statement
purposes or $5,000. Acquisition costs for software include those
development costs capitalized in accordance with GAAP.
Information technology systems include computing devices,
ancillary equipment, software, firmware, and similar procedures,
services (including support services), and related resources.
Computing devices means machines used to acquire, store,
analyze, process, and publish data and other information
electronically, including accessories (or “peripherals”) for
printing, transmitting and receiving, or storing electronic
information. Examples of unallowable information technology
systems include service contracts, operating systems, printers,
and computers that have an acquisition cost of $5,000 or more.
See also special prohibition on the purchase of certain
telecommunications and video surveillance described in
2 CFR §
200.216.
Allowable for special purpose systems specific to the food and
agricultural sectors and specific to the activities in the grant.
Examples include food sales and traceability applications, systems
and software that support specialized equipment by design and
website development, mobile apps, etc.,
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Equipment – Special
Purpose
ALL
Allowable when provided in the approved budget or with prior
written approval for acquisition costs and rental costs of special
purpose equipment provided the following criteria are met:
1. Necessary for the research, scientific, or other technica
l
ac
tivities of the grant agreement;
2. Not otherwise reasonably available and accessible;
3. The type of equipment is normally charged as a direct
cost by the organization;
4. Acquired in accordance with organizational practices;
5. Must be used solely to meet the legislative purpose of
the grant program and objectives of the gran
t
agreement;
6. More than one single commercial organization,
commercial product, or individual must benefit from the
use of the equipment;
7. Must not use special purpose equipment acquired wit
h
g
rant funds to provide services for a fee to compete
unfairly with private companies that provide equivalent
services; and
8. Equipment is subject to the full range of acquisition, use,
management, and disposition requirements under
2 CFR
§ 200.313 as applicable.
Examples of special purpose equipment in the agricultural sector
include, but are not limited to: sorting equipment, packing and
labeling equipment, food processing equipment essential to the
grant-funded project, purpose specific vehicles or trailers, such as
refrigerated vans that will not be used as personal vehicles.
Farm, Gardening, and
Production Activities
and Supplies
ALL with
exceptions
Unallowable for farm, gardening, and production activities,
materials, supplies, and other related costs including but not
limited to soil, seeds, shovels, gardening tools, greenhouses, and
hoop houses.
Allowable where the specific cost is considered to meet the
requirements of grant and is authorized in the approved budget
or with prior written approval.
Fines, Penalties,
Damages and Other
Settlements
ALL
Unallowable for costs resulting from violations of, alleged
violations of, or failure to comply with, Federal, State, tribal, local,
or foreign laws and regulations.
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Fixed Amount
Subawards
ALL with
exceptions
Unallowable for cost related to fixed amount subawards.
Allowable to meet the requirements of the grant award
(noncompetitive) or with prior written approval. A recipient may
provide subawards based on fixed amounts up to the simplified
acquisition threshold, provided that the subawards meet the
requirements for fixed amount awards in 2 CFR § 200.201
.
Fundraising and
Investment
Management Costs
ALL
Unallowable for organized fundraising, including financial
campaigns, solicitation of gifts and bequests, and similar
expenses incurred to raise capital or obtain contributions,
regardless of the purpose for which the funds will be used. This
includes salaries of personnel involved in activities to raise
capital.
General Costs of
Government
ALL
Unallowable for:
Salaries and expenses of the Office of the Governor of a State or
the chief executive of a local government or the chief executive
of an Indian tribe;
Salaries and other expenses of a State legislature, tribal council,
or similar local governmental body, such as a county supervisor,
city council, school board, etc., whether incurred for purposes of
legislation or executive direction;
Costs of the judicial branch of a government;
Costs of prosecutorial activities unless treated as a direct cost to a
s
pecific program if authorized by statute or regulation (however,
this does not preclude the allowability of other legal activities of
the Attorney General as described in
2 CFR § 200.435 Defense
and prosecution of criminal and civil proceedings, claims, appeals
and patent infringements); and
Costs of other general types of government services normally
provided to the general public, such as fire and police, unless
provided for as a direct cost under a program statute or
regulation.
Goods or Services for
Personal Use
ALL
Unallowable for costs of goods or services for personal use of the
recipient’s employees regardless of whether the cost is reported
as taxable income to the employees.
Indirect Costs –
Unrecovered
ALL with
exceptions
Unallowable for unrecovered indirect costs.
Allowable for projects with match requirements to use
unrecovered indirect costs as part of cost sharing or matching.
Insurance and
Indemnification
ALL
Allowable when provided in the approved budget or with prior
written approval as indirect costs for insurance and
indemnification.
Lobbying
ALL
Unallowable as defined in 2 CFR § 200.450.
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Meals
ALL
Unallowable for business meals when individuals go to lunch or
dine together although no need exists for continuity of a meeting.
Such activity is considered an entertainment cost.
Unallowable for conference attendee breakfasts. It is expected
attendees will have adequate time to obtain this meal on their
own before a conference begins.
Unallowable for meal costs that duplicate a meeting participant’s
per diem or subsistence allowances.
Allowable for lunch or dinner meals if the costs are reasonable,
and a justification is provided that such activity maintains the
continuity of the meeting and to do otherwise will impose
arduous conditions on the meeting participants.
Allowable for meals consumed while in official travel status. They
are considered per diem expenses and should be reimbursed in
accordance with the organization’s established written travel
policies.
Memberships,
Subscriptions, and
Professional Activity
Costs
ALL
Unallowable for costs of membership in any civic or community
organization.
Allowable for costs of membership in business, technical, and
professional organizations when provided in the approved budget
or with prior written approval.
Organization Costs ALL
Unallowable for costs of investment counsel and staff and similar
expenses incurred to enhance income from investments.
Allowable with prior approval for organization costs per 2 CFR §
200.455.
Participant Support
Costs
ALL
Allowable when provided in the approved budget or with prior
written approval for such items as stipends or subsistence
allowances, and registration fees paid to or on behalf of
participants or trainees (but not employees) in connection with
approved conferences, training projects, surveys, and focus
groups.
Political Activities
ALL
Unallowable for development or participation in political
activities, in accordance with provisions of the Hatch Act (5
U.S.C.§§ 1501-1508 and §§ 7324-7326).
Pre-Award Costs (see
also section 9.5 below)
ALL
Allowable when provided in the approved budget or with prior
written approval of such costs are necessary for efficient and
timely performance of the project’s scope of work. Such costs are
allowable only to the extent that they would have been allowable
if incurred after the date of the Federal award. If charged to the
award, these costs must be charged to the initial budget period of
the award, unless otherwise specified by AMS. A recipient may
incur pre-award costs 90 calendar days before the award.
Expenses more than 90 calendar days pre-award require prior
approval. These costs and associated activities must be included
in the recipient’s project narrative and budget justification. All
costs incurred before the award are at the potential recipient’s
risk. The incurrence of pre-award costs in anticipation of an
award imposes no obligation on AMS to award funds for such
costs.
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Printing and
Publications
ALL
Allowable to pay the cost of preparing informational leaflets,
reports, manuals, and publications relating to the project;
however, the printing of hard copies is discouraged given the
prevalence of electronic/virtual publication means. If charged to
the award, these costs must be charged to the final budget period
of the award, unless otherwise specified by AMS.
Salaries and Wages
ALL
Allowable as part of employee compensation for personnel
services in proportion to the amount of time or effort an
employee devotes to the grant-supported project or program
during the period of performance under the Federal award,
including salaries, wages, and fringe benefits. Such costs must be
incurred under formally established policies of the organization,
be consistently applied, be reasonable for the services rendered,
and be supported with adequate documentation.
Salary and wage amounts charged to grant-supported projects or
programs for personal services must be based on an adequate
payroll distribution system that documents such distribution in
accordance with generally accepted practices of like
organizations. Standards for payroll distribution systems are
contained in the applicable cost principles (other than those for
for-profit organizations).
Unallowable for salaries, wages, and fringe benefits for project
staff who devote time and effort to activities that do not meet
the purpose of the grant program.
Selling and Marketing
Costs – Promotion of
an Organization’s
Image, Logo, or Brand
Name
ALL
Unallowable for costs designed solely to promote the image,
logo, or brand for a specific organization or business, unless
specifically to fulfill the purpose of the program or grant project.
Allowable for more general branding that aligns with the purpose
of the grant. For example, in Specialty Crop Block Grant,
promotional items could say “Buy STATE/COUNTY Grown Apples”
but not “XYZ Grown”, which promotes XYZ generically, to ensure
funds are supporting specialty crop stakeholders. Similarly, a
promotional campaign to increase producer sales of
“STATE/COUNTY Grown fruits and vegetables” is acceptable while
increasing membership in “STATE/COUNTY Grown” generally is
not.
Selling and Marketing
Costs – Promotion of
Venues that do not
Align with Grant
Program Purpose
ALL
Unallowable for costs for promotion of specific venues,
tradeshows, events, meetings, programs, conventions, symposia,
seminars, etc. that do not align with the purpose of the grant
program as stated in the RFA.
Selling and Marketing
Costs – Promotional
Items, Gifts, Prizes, etc.
ALL with
exceptions
Unallowable for promotional items, swag, gifts, prizes,
memorabilia, and souvenirs.
Allowable with conditions to meet the requirements of the grant,
in the approved application or with prior approval for marketing
activities directly related to the funded project. Promotional
items include point-of-sale materials, promotional kits, signs or
streamers, automobile stickers, table tents, and placemats, or
promotional items of a personal nature (e.g., t-shirt, hats, etc.).
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Selling and Marketing
Costs – Coupons,
Incentives or Other
Price Discounts
ALL
Unallowable for costs of the value of coupon/incentive
redemptions or price discounts (e.g., the $5.00 value for a $5.00
clip-out coupon).
Allowable for costs associated with printing, distribution, or
promotion of coupons/tokens or price discounts (e.g., a print
advertisement that contains a clip-out coupon) as long as they
benefit more than a single program or organization.
Selling and Marketing
Costs – Food for
Displays, Tastings,
Cooking
Demonstrations
ALL with
exceptions
Unallowable for purchasing food for displays, tastings, and
cooking demonstrations.
Allowable where the specific cost is considered to meet the
programmatic purpose of the grant and is authorized in the
approved budget or with prior written approval.
Selling and Marketing
Costs – General
Marketing Costs
ALL with
exceptions
Unallowable for costs designed solely to promote the image of
an organization, general logo, or general brand.
Allowable for costs designed to promote products that align with
the purpose of the grant program.
Selling and Marketing
Costs – Sponsorships
ALL
Unallowable for costs associated with sponsorships. A
sponsorship is a form of advertising in which an organization uses
grant funds to have its name and/or logo associated with certain
events and where the organization does not necessarily know
how the funds associated with sponsorship costs will be used.
These costs also benefit only the organization offering funding,
limiting the beneficiaries to the sponsor organization.
Selling and Marketing
Costs – Use of Meeting
Rooms, Space, exhibits
that do not Align with
Grant Program Purpose
ALL
Unallowable for costs associated with trade show
attendance/displays, meeting room reservations, and/or any
other displays, demonstrations, exhibits, or rental of space where
activities do not specifically align with the purpose of the grant
program. See Conferences for more information.
Supplies and Materials,
Including Costs of
Computing Devices
ALL
Allowable for costs incurred for materials, supplies, and
fabricated parts necessary to carry out a Federal award.
Purchased materials and supplies must be charged at their actual
prices, net of applicable credits. Withdrawals from general stores
or stockrooms should be charged at their actual net cost under
any recognized method of pricing inventory withdrawals,
consistently applied. Incoming transportation charges are a
proper part of materials and supplies costs. Only materials and
supplies used for the performance of a Federal award may be
charged as direct costs.
A computing device is a supply if the acquisition cost is less than
the lesser of the capitalization level established by the recipient
for financial statement purposes or $5,000, regardless of the
length of its useful life. In the specific case of computing devices,
charging as a direct cost is allowable for devices that are essential
and allocable, but not solely dedicated, to the performance of a
Federal award. Where Federally donated or furnished materials
are used in performing the Federal award, such materials will be
used without charge.
ALL
Allowable when the training is required to meet the objectives of
the project or program, including training that is related to
Federal grants management.
Cost Category
Affected
AMS Grant
Program(s)
Description, Guidance and Exceptions
Travel – Domestic and
Foreign
ALL
Allowable for travel, when provided in the approved budget or
with prior written approval when costs are limited to those
allowed by formal organizational policy and the purpose aligns
with the purpose of the program.
The allowable travel cost of recipients that do not have formal
travel policies and for-profit entities may not exceed those
established by the Federal Travel Regulation, issued by
General
Services Administration (GSA), including the maximum per diem
and subsistence rates prescribed in those regulations. If a
recipient does not have a formal travel policy, those regulations
will be used to determine the amount that may be charged for
travel costs.