Exhibit 4. Selected Items of Cost
Item Description
Relocation
Costs
Allowable—in other than change of grantee organization situations—when such costs are incurred
incidental to a permanent change of duty assignment (for an indefinite period or for a stated period of
no less than 12 months) for an existing employee working on a grant-supported project, or when a
new employee is recruited for work on the project, provided that the move is for the recipient’s benefit
rather than the individual’s and that payment is made according to established organizational policies
consistently applied regardless of the source of funds. Relocation costs may include the cost of
transporting the employee and his or her family, dependents, and household goods to the new
location and certain expenses associated with the sale of the former home. If relocation costs have
been incurred in connection with the recruitment of a new employee, whether as a direct cost or an
indirect cost, and the employee resigns for reasons within his or her control within 12 months after
hire, the recipient must credit the grant account for the full cost of the relocation charged to the grant.
When there is a change in the grantee organization, the personal relocation expenses of the PI/PD
and others moving to the new recipient are not allowable charges.
Rental or
Lease of
Facilities and
Equipment
Allowable subject to the limitations below. Rental costs are allowable to the extent that the rates are
reasonable at the time of the decision to lease in light of such factors as rental costs of comparable
property, if any; market conditions in the area; the type, life expectancy, condition, and value of the
property leased; and available alternatives. Because of the complexity involved in determining the
allowable amount under certain types of leases, recipients are encouraged to consult the GMO
before entering into leases that will result in direct charges to an award. In general, the rental costs
for facilities and equipment applicable to each budget period should be charged to that period.
However, see “Property Management” for an exception to this general rule.
Rental costs under leases that create a material equity in the leased property, as defined in the
applicable cost principles, are allowable only up to the amount that would be allowed had the
recipient purchased the property on the date the lease agreement was executed. This would include
depreciation or use allowances, maintenance, taxes, and insurance, but would exclude unallowable
costs.
When a recipient transfers property to a third party through sale, lease, or otherwise and then leases
the property back from that third party, the lease costs that may be charged to an HHS grant
generally may not exceed the amount that would be allowed if the recipient continued to own the
property.
Rental costs under “less-than-arms-length” leases are allowable only up to the amount that would be
allowed under the applicable cost principles had title to the property been vested in the recipient. A
less-than-arms-length lease is one in which one party to the lease agreement is able to control or
substantially influence the actions of the other. Such leases include, but are not limited to, those
between divisions of an organization; between organizations under common control through common
officers, directors, or members; and between an organization and its directors, trustees, officers, or
key employees (or the families of these individuals), directly or through corporations, trusts, or similar
arrangements in which they hold a controlling interest.
Research
Patient Care
The costs of routine and ancillary services provided by hospitals to individuals, including patients and
volunteers, participating in research programs are allowable if included in the NoA or approved as a
post-award change as specified in “Prior-Approval Requirements—OPDIV Prior Approval.”
“Routine services” include the regular room services, minor medical and surgical supplies, and the
use of equipment and facilities for which a separate charge is not customarily made. “Ancillary
services” are those special services for which charges customarily are made in addition to routine
services, e.g., x-ray, operating room, laboratory, pharmacy, blood bank, and pathology. See
“Research Patient Care Costs” for policy concerning reimbursement of these costs.
The following otherwise allowable costs are not classified as research patient care costs: items of
personal expense reimbursement, such as patient travel; consulting physician fees; and any other
direct payments to individuals, including inpatients, outpatients, subjects, volunteers, and donors.
Reserve Funds Contributions to a reserve fund for self-insurance are allowable as specified in the governing cost
principles (also see “Contingency Funds” in this exhibit).
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