[Code of Federal Regulations]
[Title 23, Volume 1]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 23CFR420.113]

[Page 85-86]
 
                           TITLE 23--HIGHWAYS
 
 CHAPTER I--FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT OF TRANSPORTATION
 
PART 420--PLANNING AND RESEARCH PROGRAM ADMINISTRATION--Table of Contents
 
      Subpart A--Administration of FHWA Planning and Research Funds
 
Sec. 420.113  Eligibility of costs.

    (a) Costs will be eligible for FHWA participation provided that the 
costs:
    (1) Are for work performed for activities eligible under the section 
of title 23, U.S.C., applicable to the class of funds used for the 
activities;
    (2) Are verifiable from the STA's or the subrecipient's records;
    (3) Are necessary and reasonable for proper and efficient 
accomplishment of project objectives and meet the other criteria for 
allowable costs in the applicable cost principles cited in 49 CFR 18.22;
    (4) Are included in the approved budget, or amendment thereto; and
    (5) Were not incurred prior to FHWA authorization.
    (b)(1) Except as specified in paragraph (b)(2) of this section, 
indirect costs of an STA are not eligible for reimbursement with FHWA 
planning and research funds.
    (2) Salaries for services rendered by STA employees who are 
generally classified as administrative are eligible for reimbursement 
for a transportation planning unit, RD&T unit, or other unit performing 
eligible work with FHWA planning and research funds (including 
development, establishment, and implementation of the management and 
monitoring systems required by 23 U.S.C. 303 and 23 CFR part 500) in

[[Page 86]]

the ratio of time spent on the participating portion of work in the unit 
to the total unit's working hours.
    (c) Indirect costs of MPOs and local governments are allowable if 
supported by a cost allocation plan and indirect cost proposal approved 
in accordance with the provisions of OMB Circular A-87. An initial plan 
and proposal must be submitted to the Federal cognizant or oversight 
agency for negotiation and approval prior to recovering any indirect 
costs. The cost allocation plan and indirect cost proposal shall be 
updated annually and retained by the MPO or local government, unless 
requested to be resubmitted by the Federal cognizant or oversight 
agency, for review at the time of the audit required in accordance with 
49 CFR Part 90. If the MPO or local government's indirect cost rate 
varies significantly from the rate approved for the previous year, or if 
the MPO or local government changes its accounting system and affects 
the previously approved indirect cost allocation plan and proposal or 
rate and its basis of application, the indirect cost allocation plan and 
proposal shall be resubmitted for negotiation and approval. In either 
case, a rate shall be negotiated and approved for billing purposes until 
a new plan and proposal are approved.
    (d) Indirect costs of other STA subrecipients, including other State 
agencies, are allowable if supported by a cost allocation plan and 
indirect cost proposal prepared, submitted, and approved by the 
cognizant or oversight agency in accordance with the OMB requirements 
applicable to the subrecipient.