According to federal regulations, what are allowable costs?

Allowable costs refer specifically to the expenses that are considered permissible under federal awards according to regulations. These expenses must adhere to specific guidelines that define what can be charged to federal grants or contracts. The criteria for allowable costs typically include that expenses must be necessary and reasonable for the performance of the federal award, must conform to any limitations or exclusions in the federal regulations or the agreement itself, and must be adequately documented.

In this context, choosing that they are "permitted expenses under federal awards" captures the essence of allowable costs, as it emphasizes compliance with federal guidelines and the conditions set forth in the awarding documents. This understanding is key for those managing federal funds to ensure financial accountability and proper use of resources.

The other options present scenarios that do not align with the definitions of allowable costs; for instance, personal benefits do not constitute allowable costs, as they are irrelevant to the performance of the federal awards. Similarly, costs that are not subject to review would not ensure compliance with the necessary standards, while stating that all costs associated with project activities are allowable is overly broad and disregards the specific criteria set by federal regulations.