Under OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), allowable costs under federal grants must be:

Necessary and reasonable for program performance

Allocable to the grant

In accordance with generally accepted accounting principles

Not otherwise unallowable

Materials and supplies directly benefiting the grant are generally allowable. In contrast, lobbying, interest payments, and general governmental costs not tied to the grant are explicitly unallowable.

Relevant References:

2 CFR Part 200 – Uniform Guidance (Subpart E – Cost Principles)

2 CFR §200.403 – Factors affecting allowability of costs

2 CFR §200.422 – Lobbying

2 CFR §200.449 – Interest

Answer: C. materials and supplies