CMS-07-021/023 - Los Angeles County Department of Children and ...

(3) Royalties paid under an agreement entered into after an award is
made to a non-profit organization.
c. In any case involving a patent or copyright formerly owned by the nonprofit
organization, the amount of royalty allowed should not exceed the cost
which would have been allowed had the non-profit organization retained title
thereto.
45. Selling and marketing. Costs of selling and marketing any products or
services of the non-profit organization are unallowable (unless allowed under
Attachment B, paragraph 1. as allowable public relations cost. However, these
costs are allowable as direct costs, with prior approval by awarding agencies,
when they are necessary for the performance of Federal programs.
46. Specialized service facilities.
a. The costs of services provided by highly complex or specialized
facilities operated by the non-profit organization, such as computers, wind
tunnels, and reactors are allowable, provided the charges for the services meet
the conditions of either 46 b. or c. and, in addition, take into account any
items of income or Federal financing that qualify as applicable credits under
Attachment A, subparagraph A.5. of this Circular.
b. The costs of such services, when material, must be charged directly to
applicable awards based on actual usage of the services on the basis of a
schedule of rates or established methodology that (i) does not discriminate
against federally-supported activities of the non-profit organization, including
usage by the non-profit organization for internal purposes, and (ii) is designed
to recover only the aggregate costs of the services. The costs of each service
shall consist normally of both its direct costs and its allocable share of all
indirect costs. Rates shall be adjusted at least biennially, and shall take
into consideration over/under applied costs of the previous period(s).
c. Where the costs incurred for a service are not material, they may be
allocated as indirect costs.
d. Under some extraordinary circumstances, where it is in the best
interest of the Federal Government and the institution to establish alternative
costing arrangements, such arrangements may be worked out with the cognizant
Federal agency.
47. Taxes.
a. In general, taxes which the organization is required to pay and which
are paid or accrued in accordance with GAAP, and payments made to local
governments in lieu of taxes which are commensurate with the local government
services received are allowable, except for (i) taxes from which exemptions are
available to the organization directly or which are available to the
organization based on an exemption afforded the Federal Government and in the
latter case when the awarding agency makes available the necessary exemption
certificates, (ii) special assessments on land which represent capital
improvements, and (iii) Federal income taxes.
b. Any refund of taxes, and any payment to the organization of interest
thereon, which were allowed as award costs, will be credited either as a cost
reduction or cash refund, as appropriate, to the Federal Government.
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