Subpart E: Cost principles 2024 Uniform Guidance · effective Oct 1, 2024

2 CFR 200.407: Prior written approval (prior approval)

2 CFR 200.407 sets 2 requirements for organizations that receive federal grants and cooperative agreements. Applies when you build your application and budget, and to every cost you charge after award.

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What 2 CFR 200.407 requires

1. Allowable costs

What you must do

Where one of the sixteen enumerated sections conditions allowability on prior written approval, obtain that approval from the Federal agency (or, for indirect costs, the cognizant agency for indirect costs) before incurring the cost; for other special or unusual costs, seeking advance written approval is the mechanism to avoid later disallowance or dispute.

When it applies

Budget includes any cost category on the § 200.407(a)-(p) list: cost sharing (200.306), program income (200.307), budget/program plan revisions (200.308), fixed amount subawards (200.333), compensation—personal services para (h) (200.430), compensation—fringe benefits (200.431), equipment and other capital expenditures (200.439), exchange rates (200.440), fines/penalties/damages/settlements (200.441), fund raising and investment management (200.442), goods or services for personal use (200.445), insurance and indemnification (200.447), organization costs (200.455), pre-award costs (200.458), rearrangement and reconversion (200.462), travel costs (200.475)

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2. General

What you must do

The absence of prior written approval on an element of cost does not, in itself, affect that cost's reasonableness or allocability unless prior approval is specifically required for allowability by one of the enumerated sections.

When it applies

A reviewer or checker questions a cost solely for lacking prior approval

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Sections 2 CFR 200.407 refers to

Sections that refer to 2 CFR 200.407

Regulation text of 2 CFR 200.407

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The reasonableness and allocability of certain costs under Federal awards may be difficult to determine. To avoid subsequent disallowance or dispute based on unreasonableness or nonallocability, the recipient may seek the prior written approval of the Federal agency (or, for indirect costs, the cognizant agency for indirect costs) before incurring the cost. The absence of prior written approval on any element of cost will not, in itself, affect the reasonableness or allocability of that cost unless prior approval is specifically required for allowability as described under certain circumstances in the following sections:

(a) Section 200.306 Cost sharing;

(b) Section 200.307 Program income;

(c) Section 200.308 Revision of budget and program plans;

(d) Section 200.333 Fixed amount subawards;

(e) Section 200.430 Compensation—personal services, paragraph (h);

(f) Section 200.431 Compensation—fringe benefits;

(g) Section 200.439 Equipment and other capital expenditures;

(h) Section 200.440 Exchange rates;

(i) Section 200.441 Fines, penalties, damages and other settlements;

(j) Section 200.442 Fund raising and investment management costs;

(k) Section 200.445 Goods or services for personal use;

(l) Section 200.447 Insurance and indemnification;

(m) Section 200.455 Organization costs;

(n) Section 200.458 Pre-award costs;

(o) Section 200.462 Rearrangement and reconversion costs;

(p) Section 200.475 Travel costs.

Source: eCFR · checked Sep 17, 2026

Questions about 2 CFR 200.407

What does 2 CFR 200.407 require?

Where one of the sixteen enumerated sections conditions allowability on prior written approval, obtain that approval from the Federal agency (or, for indirect costs, the cognizant agency for indirect costs) before incurring the cost; for other special or unusual costs, seeking advance written approval is the mechanism to avoid later disallowance or dispute. The absence of prior written approval on an element of cost does not, in itself, affect that cost's reasonableness or allocability unless prior approval is specifically required for allowability by one of the enumerated sections.

When does 2 CFR 200.407 apply?

Budget includes any cost category on the § 200.407(a)-(p) list: cost sharing (200.306), program income (200.307), budget/program plan revisions (200.308), fixed amount subawards (200.333), compensation—personal services para (h) (200.430), compensation—fringe benefits (200.431), equipment and other capital expenditures (200.439), exchange rates (200.440), fines/penalties/damages/settlements (200.441), fund raising and investment management (200.442), goods or services for personal use (200.445), insurance and indemnification (200.447), organization costs (200.455), pre-award costs (200.458), rearrangement and reconversion (200.462), travel costs (200.475). A reviewer or checker questions a cost solely for lacking prior approval.

Plain-English summaries for information only, not legal advice. Always check the regulation text, your award terms and your agency’s guidance.