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Lee County, North Carolina Finance Department WHEREAS the Lee County Government, has received and will continue to receive multiple Federally funded grants, and WHEREAS the Federal funds are subject to the provisions of the federal Uniform Grant Guidance, 2 CFR Sect. 200(UG); and WHEREAS the Uniform Guidance provides, in relevant part: Allowable Costs/Cost Principles. As outlined in the Uniform Guidance at 2 CFR Part 200, Subpart E regarding Cost Principles, allowable costs are based on the premise that a recipient is responsible for the effective administration of Federal awards, application of sound management practices, and administration of Federal funds in a manner consistent with the program objectives and terms and conditions of the award. Recipients must implement robust internal controls and effective monitoring to ensure compliance with the Cost Principles, which are important for building trust and accountability. Uniform Guidance outline the types of costs that are allowable, including certain audit costs. For example, per 2 CFR 200.425, a reasonably proportionate share of the costs of audits required by the Single Audit Act Amendments of 1996 are allowable;however,costs for audits that were not performed in accordance with 2 CFR Part 200, Subpart F are not allowable. Please see 2 CFR Part 200, Subpart E regarding the Cost Principles for more information. a. Administrative costs: Recipients may use funds for administering the Federal grant supported program, including costs of consultants to support effective management and oversight, including consultation for ensuring compliance with legal, regulatory, and other requirements. Further, costs must be reasonable and allocable as outlined in 2 CFR 200.404 and 2 CFR 200.405. Pursuant to the Federal Award Terms and Conditions, recipients may be permitted to charge both direct and indirect costs to their award as administrative costs. Direct costs are those that are identified specifically as costs of implementing the Federally funded program objectives, such as contract support,materials, and supplies for a project. Indirect costs are general overhead costs of an organization where a portion of such costs are allocable to the Federal award such as the cost of facilities or administrative functions like a director's office. Each category of cost should be treated consistently in like circumstances as direct or indirect, and recipients may not charge the same administrative costs to both direct and indirect cost categories, or to other programs. If a recipient has a current Negotiated Indirect Costs Rate Agreement (NICRA) established with a Federal cognizant agency responsible for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals, then the recipient may use its current NICRA. Alternatively, if the recipient does not have a NICRA, the recipient may elect to use the de minimis 2