An unallowable cost is a cost which the sponsor prohibits and will not reimburse. Because New York University (NYU) complies with all the terms and conditions of a sponsored award, at no time should unallowable costs be charged to an award whose sponsor does not allow the cost. Proper tracking of unallowable costs is required for compliance with federal regulations.
It’s important to keep in mind that activities and expenses that are unallowable on a federal award may still be allowable on a non-federal award.
Departments may still incur federally unallowable expenses, but they must be coded as unallowable so they can be readily identified and excluded from the indirect cost rate calculation.
The following methods are used by NYU to identify, separately code, and monitor Unallowable Costs: