3.9 Allowable Costs
The cost of space in privately or publicly owned buildings used for the benefit of the project is allowable subject to the conditions stated below:
- The total cost of space does not exceed the rental cost of comparable space and facilities in a privately owned building in the same locality.
- You do not charge the cost of space procured for project usage to the program for periods of non-occupancy without authorization of the Federal awarding agency.
- The rental cost for space in a privately owned building is allowable. Rental costs may not be charged to the grant if you as the recipient own the building or have a financial interest in the property. However, the cost of ownership is an allowable expense.
- Cost of ownership expenses for a publicly owned building are allowable where “rental rate” systems, or equivalent systems that adequately reflect actual costs, are employed.
- Such charges must be determined on the basis of actual cost (including depreciation based on the useful life of the building, operation and maintenance, and other allowable costs). Where these costs are included in rental charges, they may not be charged elsewhere.
- No rental costs may be charged for building purchases or construction originally financed by the Federal Government.
The cost of utilities, insurance, security, janitorial services, elevator service, upkeep of grounds, normal repairs and maintenance, and the like are allowable to the extent they are not otherwise included in rental or other charges for space.
Costs incurred for rearrangement and alteration of facilities required specifically for the award program, or that materially increase the value or useful life of the facility, are allowable when specifically approved by the awarding agency.
Depreciation or use allowance on idle or excess facilities is NOT ALLOWABLE, except when specifically authorized by the Federal awarding agency.
The cost of space procured under rental-purchase or a lease-with-option to purchase agreement is allowable when specifically approved by the awarding agency. This type of arrangement may require application of special matching share requirements under construction programs.