Allowable and Unallowable Grant Expenses Policy

Last updated: February 5, 2024


The Wisconsin Partnership Program is governed by a number of unique rules and requirements through the Insurance Commissioner’s Order, the Grant Agreement with the UW System Board of Regents, and the University of Wisconsin’s rules and policies as well as local, state and federal laws. It is within this context that the Wisconsin Partnership Program (WPP) works diligently to ensure the best stewardship of the funds.

As stated in the governing WPP cost principles, project costs must be allowable, allocable, reasonable and consistently treated. The Allowable and Unallowable Grant Expenses policy provides guidance on specific items of cost for applicants and grant recipients of Wisconsin Partnership Program grant funds. Grant recipients are expected to review this policy carefully upon receipt of the award and regularly thereafter to ensure a full understanding of the rules and requirements of the policy.

It is impossible to envision every potential unallowable cost in one policy. Therefore, based on the experience of the Wisconsin Partnership Program as a result of many years of grants management, included in the policy are a number of specific expenditures or general expense categories that require prior approval by WPP. Additionally, the program asks each grant recipient to include, as much as possible, all expenses with specificity in the project budget. Inclusion of a cost within a project budget does not make the cost allowable.

WPP reserves the right to question or deny any expense whether or not it is specifically mentioned in this policy or included within the project budget. If you are questioning whether an expense is allowable, please contact a member of the WPP Finance team.


Allowable costs are expenses directly incurred by the grant recipient that are project specific and necessary for the performance of the WPP grant award. Please be aware that costs listed as allowable may include exceptions, and/or require prior approval by WPP.

Unallowable costs are expenses that may not be incurred using WPP funds, including indirect expenses such as expenses related to the general operating functions of the organization.

In addition, the non-supplanting stipulation requires that all reimbursable expenses be directly attributable to the grant and that WPP funds cannot replace other funding available to the grant recipient. Examples include:

  • Overhead
  • Alcoholic beverages
  • Entertainment
  • Fines
  • Lobbying
  • Pre-award costs
  • Proposal costs
  • Donations
  • Any expenses for goods and services for personal use of employees

Because of non-supplanting requirements, the Wisconsin Partnership Program does not allow indirect costs, such as overhead or administrative costs. WPP expects that grant recipients have existing infrastructure in place to provide indirect support for the grant agreement. Grant recipients must indicate their capacity to oversee and manage the project, programmatically and financially, before any funding decisions are made. Overhead is not an allowable expense, even if there is an existing cost allocation model. Expenses for existing clerical and administrative staff such as bookkeepers or accountants, human resources or general IT support are considered an unallowable indirect cost.

Prior approval by WPP will be in writing by the Finance Associate Director addressing the original or revised budget as a whole, or a particular expense. For some expenses, prior approval by the WPP Executive Director is required. Requests for prior approval must be made in writing to the Finance Associate Director.


Unallowable Costs

Unallowable Expense Item Description
Alcoholic Beverages Alcoholic beverages are not allowable.
Alumni Activities Alumni relations and alumni service costs are not allowable.
Bad Debts Losses from uncollectible accounts, collection costs and related legal costs are not allowable.
Commencement/ Convocation Costs of ceremonies and receptions are not allowable.
Contingency Funds Provisions made for events that are uncertain as to actual occurrence, timing or extent are not allowable.
Capital Expenditures Expenditures to acquire capital assets such as general-purpose equipment, plants, buildings, building improvements, and land are not allowable. Costs to keep property and equipment in generally efficient operating condition are not allowable. Project specific equipment purchases are allowable with restrictions, please refer to the equipment section below.
Defense, Prosecution, Claims and Appeals Defense, prosecution, claims and appeals are not allowable.
Depreciation The cost of an asset – building or equipment – spread over the asset’s useful life is not allowable.
Donations and Contributions Donations and contributions at a fundraising event, including gifts, memorials and the purchase of tables, are not allowable. Charitable contributions to organizations are not allowable.
Entertainment & Social Activities Amusement, social activities, and related costs, including tickets, meals, lodging and gratuities, are not allowable.
Establishing Independent Organization Using WPP funds to establish an independent organization, such as a 501(c)(3) or a limited liability corporation, is strictly prohibited. This includes a prohibition of WPP funds being used to support project staff effort to establish an independent organization.
Fines and Penalties Costs resulting from violations of laws and regulations are not allowable.
Fundraising General fundraising not related to the grant is not allowable.
Goods or Services for Personal Use by Employees Items or services providing direct personal benefit to employees are not allowable.
Grantmaking Recipients of WPP funds are prohibited from re-granting funds to subrecipients, unless otherwise specified in a grant agreement. (see contractor/subaward/pilot guidance)
Hospitality Hospitality expenses, such as flowers, retirement gifts and non-program greeting cards are not allowable. See Events for exceptions related to gifts.
Institutional Review Board Fees Costs associated with obtaining necessary approvals from research compliance bodies, such as the Institutional Review Board, are considered institutional costs and are not allowable. In fact, IRB fees are to be waived for WPP grant recipients.
Insurance Insurance coverage for normal business purposes, whether provided by an external company or through a self-insurance program, is not allowable. For example, travel and automobile insurance are not allowed.
Interest Interest expense is considered an institutional cost and not directly allocable to a project.
Investment Management Costs for investment management are not allowable.
Lobbying Attempts to influence outcomes of elections or other political actions are not allowable. See Lobbying and Advocacy Policy and Guidelines.
Losses on Project Agreements Costs in excess of available funding are not allowable as a direct cost on subsequent project agreements.
Official Functions/Social Events Official functions, which are events that are primarily social in nature, are not allowable on WPP grants (See UW–Madison Official Functions and Expenses Policy UW-3075). Examples: holiday parties, retirement parties, staff celebrations. For information on events, such as summits or conferences, see “Events.”
Payroll Fees Fees for payroll processing and maintenance are considered a broader organizational expense that cannot be specifically attributed to the WPP project and are not allowable.
Pre-Award Costs Pre-award costs – costs incurred prior to the start date of the project agreement – are not allowable.
Prepaid Expenses All expenses must be incurred during the grant agreement. If an expense relates to a good received or service incurred outside the project date this is considered a prepaid expense and is unallowable.
Proposal Costs Expenses related to the preparation of the proposal, prior to the grant award are considered institutional costs and are not allowable.
Salary/Fringe for Administrative Personnel Salaries and fringe benefits of general corporate or organizational support staff – departmental administration, including professional and clerical staff, finance, human resources, general IT and central administration staff serving the entire organization – are considered an indirect cost and not allowable.
Sales Taxes State sales taxes paid by tax-exempt organizations or tax-exempt entities are not allowable and will not be reimbursed.
Sponsorships Sponsorships are unallowable unless they have a specific direct purpose for the project. If determined by WPP to be allowable, the expense must be included in the approved project budget.

Allowable Costs

In general, the following costs are allowable on WPP awards, however there may be exceptions.