The Office of Management and Budget (OMB) issues cost principles for all Federal agencies
that award grants and contracts to state and local governments. OMB Circular A-87
establishes cost principles for determining costs applicable to those grants and contracts.
The circular contains general principles for determining allowable costs, both direct
and indirect. It also contains information and guidance concerning the development
and submission of statewide cost allocation plans (SWCAP) and indirect cost rates.
In addition to A-87, the Department of Health and Human Services (HHS), in coordination
with OMB, has developed an implementation guide for A-87 entitled, “A Guide for State,
Local and Indian Tribal Governments,” (ASMB C-10). The ASMB C-10 is intended to assist
governmental units in applying the principles and standards contained in A-87. [The
ASMB C-10 replaced and supersedes HHS Brochure OASC-10.] The guide is mandated by
OMB in circular A-87 and is a government-wide document. The standards therein supersede
any other conflicting standards. These guidelines are available on the internet at
the following addresses: