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5 <br /> Orange County Allowable Costs and Costs Principles Policy <br /> I. ALLOWABLE COSTS AND COSTS PRINCIPLES POLICY OVERVIEW <br /> Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost <br /> Principles, and Audit Requirements for Federal Awards, commonly called Uniform Guidance <br /> (UG), specifically Subpart E, defines those items of cost that are allowable, and which are <br /> unallowable. The tests of allowability under these principles are: (a) the costs must be <br /> reasonable; (b) they must be allocable to eligible projects under the Coronavirus State and Local <br /> Fiscal Recovery Funds of H.R. 1319 American Rescue Plan Act of 2021 (ARP/CSLFRF); (c) <br /> they must be given consistent treatment through application of those generally accepted <br /> accounting principles appropriate to the circumstances; and(d)they must conform to any <br /> limitations or exclusions set forth in these principles or in the ARP/CSLFRF grant award as to <br /> types or amounts of cost items. Unallowable items fall into two categories: expenses which are <br /> by their nature unallowable (e.g., alcohol), and unallowable activities (e.g., fund raising). <br /> Orange County shall adhere to all applicable cost principles governing the use of federal grants. <br /> This policy addresses the proper classification of both direct and indirect charges to <br /> ARP/CSLFRF funded projects and enacts procedures to ensure that proposed and actual <br /> expenditures are consistent with the ARP/CSLFRF grant award terms and all applicable federal <br /> regulations in the UG. <br /> Responsibility for following these guidelines lies with Orange County's Department of Finance <br /> and Administrative Services (Finance), which is charged with the administration and financial <br /> oversight of the ARP/CSLFRF. Further, all County employees and officials who are involved in <br /> obligating, administering, expending, or monitoring ARP/CSLFRF grant funded projects should <br /> be well versed with the categories of costs that are generally allowable and unallowable. <br /> Questions on the allowability of costs should be directed to Finance's Budgeting Division and/or <br /> Orange County's County Attorney's Office (Attorney's Office). As questions on allowability of <br /> certain costs may require interpretation and judgment, County personnel are encouraged to ask <br /> for assistance in making those determinations. <br /> II. GENERAL COST ALLOWABILITY CRITERIA <br /> All costs expended using ARP/CSLFRF funds must meet the following general criteria: <br /> 1. Be necessary and reasonable for the proper and efficient performance and <br /> administration of the grant program. <br /> A cost must be necessary to achieve a project object. When determining whether a cost is <br /> necessary, consideration may be given to: <br /> o Whether the cost is needed for the proper and efficient performance of the grant <br /> project. <br /> o Whether the cost is identified in the approved project budget or application. <br /> o Whether the cost aligns with identified needs based on results and findings from a <br /> needs assessment. <br /> Cost Principles Policy 4 <br /> May 2022 <br />