Video instructions and help with filling out and completing Why Form 2220 Charities

Instructions and Help about Why Form 2220 Charities

Welcome to our course on allowable cost principles for recipients of federal grants and other types of Awards equipment purchased by federal awards is typically divided into two categories special-purpose equipment and general purpose equipment special-purpose equipment includes equipment which is used for research medical scientific and other similar technical activities general purpose equipment is defined as equipment whose use is not limited to special purposes special purpose equipment is generally allowable as a direct cost to the federal award normally the organization must have the prior approval of the awarding agency to purchase equipment costing over $5,000 the regulations also state that general purpose equipment should not be charged as a direct cost to the federal award without prior approval of the awarding agency professional service costs are conditionally allowable if the costs are not paid to officers or employees of the organization the charges must be reasonable in relation to the services rendered it should also be noted that the services can't be provided on a contingency basis where the payment to the professional is contingent upon recovering the costs from the federal government professional services have some additional conditions related to the allowability of costs the first question that may be asked is could the services be performed more economically by direct employment rather than contracting with a service firm next are the services supported by an adequate contract between the organization and the professional and what are the qualifications of the professional and the customary fees charged for these types of services finally why is it necessary to contract for these services instead of performing the work in-house the key concepts in this section are that there are many examples of allowable costs contained in Appendix B of 2 CFR part 230 and the recipient needs to be aware that many of these items have very specific rules regarding allowability of costs the organization needs to understand the restrictions so costs can be properly classified.