In the climate of the mid 90's, it was no longer a question of whether an expenditure has been allowed by Circular A-21, but whether it is considered reasonable by current "standards." In the turbulent atmosphere generated by congressional investigations, previous "unallowables" were made more explicit and new ones were added. Many universities had always acted conservatively and had routinely excluded borderline costs. Nevertheless, the redefined lists, applied retroactively, made some institutions appear to have been in violation of Circular A-21. The new and improved list of "unallowables" is presented below for ready reference.
Under the current Circular A-21, none of these "unallowables" can be allocated through F&A cost pools to research, and the University must certify that they have indeed been excluded. The difficulty in identifying these unallowable costs can best be illustrated by the following example. Although the University rigorously excludes all costs associated with centralized fund-raising by eliminating all expenditures included in budget numbers established for this activity, similar costs in departments, schools and colleges are commingled in operating budgets and were not identified readily and specifically as fund raising. The University now relies on careful identification of fund raising costs by administrative staff in academic units for exclusion from the Departmental Administration cost pool. As a result of these diligent efforts, "unallowables" were not an issue in recent F&A cost rate negotiations.