What are "cost principles" in federal assistance?

Cost principles in the context of federal assistance refer to the regulations and guidelines that specifically address the allowable costs associated with federal awards. These principles provide a framework for determining which costs can be charged to federal funds and ensure that expenditures are reasonable, necessary, and in line with federal guidelines.

The cost principles include thorough criteria to help recipients of federal funds accurately allocate and justify costs. They encompass specifics such as direct costs, indirect costs, and allowability standards, ensuring that all parties involved in federal grants and agreements understand the financial responsibilities and limitations set forth by the government.

By establishing clear regulations on allowable costs, these principles help maintain financial integrity and compliance within federal programs, ensuring that federal funds are spent appropriately and effectively.