 The three circulars list various types of cost or expense item ( such as travel expense , maintenance expense , payroll salaries , lobbying costs , purchase of materials , payment of utility bills , etc . ) , and establishes whether each is either allowable or unallowable . Allowable costs are those the federal government determines permissible for federal assistance . Unallowable costs are those the government prohibits incurring for federal assistance . Certain cost items are considered universally unallowable , such as cost related to illegal activities and lobbying costs , but others may be considered unallowable for a type of recipient while being allowable for another type of recipient . As a general rule , any assistance used inappropriately , such as incurring unallowable costs , requires reimbursement to the federal government . 
