(a) Advance understandings. Under any given grant award, the reasonableness and allocability of certain cost items may be difficult to determine. To avoid subsequent disallowance or dispute based on unreasonableness or nonallocability, a recipient may seek a written understanding from LSC in advance of incurring special or unusual costs. If a recipient elects not to seek an advance understanding from LSC, the absence of an advance understanding on any element of a cost will not affect the reasonableness or allocability of the cost.

(b) Costs requiring prior approval.

(1) Without LSC's prior written approval, a recipient may not expend $25,000 or more of LSC funds on any of the following:

(i) A single purchase or single lease of personal property;

(ii) A single contract for services;

(iii) A single combined purchase or lease of personal property and contract for services; and

(iv) Capital improvements.

(2) Without LSC's prior written approval, a recipient may not expend LSC funds on a purchase of real estate.

(3) For costs apportioned between LSC funds and one or more other funding sources, this requirement applies when the cost allocable to LSC funds is $25,000 or greater.

(4) The process and substantive requirements for requests for prior approval are in 45 CFR part 1631—Purchasing and Property Management.

(c) Duration. LSC's advance understanding or approval shall be valid for one year, or for a greater period of time which LSC may specify in its approval or advance understanding.

[82 FR 37337, Aug. 10, 2017; 82 FR 55053, Nov. 20, 2017]