§356.60. Disallowable Costs and Reduced Reimbursement

Certain costs shall not be considered by the Department for reimbursement. Cost standards may be applied to costs claimed to yield reasonable costs. Disallowable costs shall include:

 

a)         expenses resulting from transactions with related parties and/or parent organizations which are greater than the expense to the related party;

 

b)         non-straightline depreciation;

 

c)         research items except as approved by the Department for program evaluation;

 

d)         bad debts;

 

e)         special benefits to owners, including owner and key-man life insurance;

 

f)         compensation to non-working owners and officers;

 

g)         discounts, rebates, allowances, and charity grants offered by the agency;

 

h)         entertainment expenses;

 

i)          fund-raising;

 

j)          revenue producing expenses;

 

k)         legal fees for litigation with governmental agencies;

 

l)          non-program related activities;

 

m)        membership to national, state, or parent organizations;

 

n)         awards and grants to individuals;

 

o)         fines and penalties;

 

p)         mortgage and loan principal payments;

 

q)         contingency funds;

 

r)          losses on other grants and contracts;

 

s)         expenses relating to the development of bids or proposals;

 

t)          housing of non-clients (does not prohibit the expense of live-in staff);

 

u)         severance pay;

 

v)         federal and state income tax;

 

w)        sales tax; and

 

x)         other costs not reasonably related to services.

 

(Source:  Renumbered from Section 356.6 at 20 Ill. Reg. 14390, effective November 1, 1996)