XV. Unallowable Costs
Use of OCJP grant funds for construction projects is prohibited.
- LAND ACQUISTION
The funding legislation specifies that no Federal award involving the renting, leasing, or construction of buildings or other physical facilities shall be used for land acquisition. Accordingly, land acquisition costs are unallowable.
Federal funds cannot be used to supplant state or local funds. Supplanting means that federal funds are used to replace state or local funds that would, in the absence of such federal aid, be made available for law enforcement, criminal justice, system improvement, victim compensation and assistance, and drug enforcement. All applicants must certify that formula grant money will be used to increase the amount of funds available for the applicable drug law enforcement, victim service activity or criminal justice system activity.
- COMPENSATION OF FEDERAL EMPLOYEES
Salary payments, consulting fees, or other enumeration of full-time Federal employees are unallowable costs.
- TRAVEL OF FEDERAL EMPLOYEES
Costs of transportation, lodging, subsistence, and related travel expenses of awarding agency employees are unallowable charges. Travel expenses of other federal employees for advisory committee or other program or project duties or assistance are allowable if they have been:
- Approved by the federal employee's Department or Agency; and
- Included as an identifiable item in the funds budgeted for the project or subsequently submitted for approval.
- BONUSES OR COMMISSIONS
Bonuses to staff, officers or board members of profit or non-profit organizations are unallowable.
The recipient or subrecipient is prohibited from paying any bonus or commission to any individual or organization for the purpose of obtaining approval of an application for award assistance. Bonuses to officers or board members of profit or nonprofit organizations are determined to be a profit or fee and are therefore unallowable.
- MILITARY TYPE EQUIPMENT
NOTE: Item G is specific to JAG only.
Costs for such items as armored vehicles, explosive devices, and other items typically associated with the military arsenal, excluding automatic weapons, are unallowable. Exceptions MAY be made by the awarding agency upon a written request and justification from the recipient.
All subrecipients must comply with the provisions of the government-wide Common Rule on Restrictions on Lobbying, as appropriate.
The following lobbying cost prohibition is applicable to all subrecipients of funding:
- Attempting to influence the outcome of any Federal, State, or local election, referendum, initiative, or similar procedure, through in-kind or cash contributions, endorsements, publicity, or similar activity; and
- Establishing, administering, contributing to, or paying for the expenses of a political party, campaign, political action committee, or other organization established for the purpose of influencing the outcome of elections.
- Attempting to influence: (a) the introduction of Federal or State legislation; or (b) the enactment or modification of any pending Federal or State legislation through communication with any member or employee of the Congress or State legislature (including efforts to influence State or local officials to engage in similar lobbying activity), or with any government official or employee in connection with a decision to sign or veto any legislation.
- Publicity or propaganda purposes designed to support or defeat legislation pending before legislative bodies.
- Paying, directly or indirectly, for any personal service, advertisement, telegram, telephone, letter, printed or written matter, or other device, intended or designed to influence in any manner a member of Congress or a State legislature, to favor or oppose, by vote or otherwise, any legislation or appropriation by either Congress or a State legislature, whether before or after the introduction of any bill or resolution proposing such legislation or appropriation.
- Engaging in legislative liaison activities, including attendance at legislative sessions or committee hearings, gathering information regarding legislation, and analyzing the effect of legislation, when such activities are carried out in support of or in knowing preparation for an effort to engage in unallowable lobbying.
- Paying a publicity expert.
- The Anti-Lobbying Act, 18 U.S.C. § 1913, recently was amended to expand significantly the restriction on use of appropriated funding for lobbying. This expansion also makes the anti-lobbying restrictions enforceable via large civil penalties, with civil fines between $10,000 and $100,000 per each individual occurrence of lobbying activity. These restrictions are in addition to the anti-lobbying and lobbying disclosure restrictions imposed by 31 U.S. C. § 1352.
The Office of Management and Budget (OMB) is currently in the process of amending the OMB cost circulars and the common rule (codified at 28 C.F.R. Part 69 for DOJ grantees) to reflect these modifications. However, in the interest of full disclosure, all subrecipients understand that no federally appropriated funding made available under this grant program may be used, either directly or indirectly, to support the enactment, repeal, modification, or adoption of any law, regulation, or policy, at any level of government, without the express approval of OCJP. Any violation of this prohibition is subject to a minimum $10,000 fine for each occurrence. This prohibition applies to all activity, even if currently allowed within the parameters of the existing OMB circulars.
STOP and SASP – The subrecipient may, however, use federal funds to collaborate with and provide information to federal, state, local, tribal and territorial public officials and agencies to develop and implement policies or model codes designed to reduce or eliminate domestic violence, dating violence, sexual assault, and stalking (as those are defined in 42 U.S.C. 13925 (a)) when such collaboration and provision of information is consistent with the activities otherwise authorized under the grant program.
- FUND RAISING
Costs of organized fund raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions, may not be charged either as direct or indirect costs against the award. Neither the salary of persons engaged in such activities nor indirect costs associated with those salaries may be charged to the award, except insofar as such persons perform other funding-related activities.
- An organization may accept donations (i.e., goods, space, services) as long as the value of the donations is not charged as a direct or indirect cost to the grant.
- A subgrantee may also expend funds, in accordance with approved award terms, to seek future funding sources to “institutionalize” the project, but not for the purpose of raising funds to finance related or complementary project activities.
- Nothing in this section should be read to prohibit a subrecipient from engaging in fund raising activities as long as Federal or non-Federal award funds do not finance such activities.
- CORPORATE FORMATION
The cost for corporate formation may not be charged either as direct or indirect costs against the award.
- STATE AND LOCAL TAXES
State and local taxes are unallowable when the government assesses taxes upon itself or disproportionately to Federal programs or when exemptions are available to the organization directly or by DOJ certified exemptions. Examples of an unallowable tax would be if the government levied taxes as a result of Federal funding or sales taxes when the agency qualifies for an exemption. An example of an allowable sales tax would be user taxes, such as gasoline or lodging tax. These provisions become effective as of the government's fiscal year beginning on or after January 1, 1998.
- GENERAL UNALLOWABLE COSTS
Unallowable costs include:
- Passport Charges
- Bar Charges/Alcoholic Beverages
- Laundry Charges
- Lodging costs in excess of Federal per diem: For events of 30 or more participants that are funded with an OCJP award, if lodging costs exceed the Federal per diem, none of the lodging costs are allowable, effective January 1, 2001.
- Food and beverage costs are rarely allowable. See specific Fund Source chapter for more information.
- Gifts/Trinkets/Memorabilia/Commemorative Items: Trinkets (items such as hats, mugs, portfolios, t-shirts, coins, gift bags, etc., regardless of whether they include the conference name or OJP/DOJ or OCJP logo) must not be purchased with DOJ or OCJP funds as giveaways for conferences. Basic supplies that are necessary for use during the conference (e.g., folders, name tags) may be purchased.
- Gift or gas cards
- Late fees
- OTHER UNALLOWABLE EXPENSES
- Legal fees
- Cost in applying for this grant
- Any expenses prior to the grant award date
- First Class Travel
- Management and administrative training
- Sole source contracts (without the prior written approval from the Office of Criminal Justice Programs)
- Cost incurred outside the project period: Any costs that are incurred either before the start of the project period or after the expiration of the project period are not allowable.
- Severance packages (compensation that an employer provides to an employee who has been laid off, whose job has been eliminated, who through mutual agreement has decided to leave the company, or who has parted ways with the company for other reasons)
- Credit Card Fees
- Membership fees to organization whose primary activity is lobbying
- Director's Insurance
- PRIOR APPROVAL
Certain budget items require prior, written approval from OCJP before adjusting the budget line-item amount(s). OCJP will review the requested changes and notify the subrecipient once a determination has been made. The following budget items must be pre-approved prior to being implemented by the subrecipient:
- Salary adjustments –( including grant funded staff percentages and salary changes) Funds may not be moved into or out of the Salaries, Benefits & Taxes line item without prior approval.
- Staffing Changes – if a position is added or deleted from the budget
- Capital Purchases
- Depreciation (updated effective 2/11/2021)
- Sensitive Minor Equipment: See Chapter X - Property and Equipment of the OCJP Administrative Manual for further details.
- Clothing and/or Uniforms (Exception: Emergency clothing for victims/clients does not require prior approval.)
- Meeting room/audio visual services
- Indirect Cost – Funds may not be moved into or out of Indirect Cost without prior approval. The request must be accompanied by a copy of the agency’s approved indirect cost rate or approved Cost Allocation Plan which includes an indirect rate.
NOTE: THIS LIST IS NOT ALL-INCLUSIVE. For further clarification, subrecipients should check the specific fund source for additional allowable and unallowable costs.
Additional information regarding unallowable costs can also be found in the Department of Justice’s Financial Guide in the DOJ Grants Financial Guide – Unallowable Cost.