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of a false certification). <br />(2) Costs incurred by a contractor in connection with any criminal, civil or administrative <br />proceedings commenced by the United States or a State to the extent provided in 10 U.S.C. <br />2324(k). <br />b. Legal expenses required in the administration of Federal programs are allowable. Legal <br />expenses for prosecution of claims against the Federal Government are unallowable. <br />11.Depreciation and use allowances. <br />. Depreciation and use allowances are means of allocating the cost of fixed assets to periods <br />a <br />benefiting from asset use. Compensation for the use of fixed assets on hand may be made <br />through depreciation or use allowances. A combination of the two methods may not be used in <br />connection with a single class of fixed assets (e.g., buildings, office equipment, computer <br />equipment, etc.) except as provided for in subsection g. Except for enterprise funds and internal <br />service funds that are included as part of a State/local cost allocation plan, classes of assets shall <br />be determined on the same basis used for the government-wide financial statements. <br />b. The computation of depreciation or use allowances shall be based on the acquisition cost of <br />the assets involved. Where actual cost records have not been maintained, a reasonable estimate <br />of the original acquisition cost may be used. The value of an asset donated to the governmental <br />unit by an unrelated third party shall be its fair market value at the time of donation. <br />Governmental or quasi-governmental organizations located within the same State shall not be <br />considered unrelated third parties for this purpose. <br />c. The computation of depreciation or use allowances will exclude: <br /> (1) The cost of land; <br /> (2) Any portion of the cost of buildings and equipment borne by or donated by the Federal <br />Government irrespective of where title was originally vested or where it presently resides; and <br /> (3) Any portion of the cost of buildings and equipment contributed by or for the governmental <br />unit, or a related donor organization, in satisfaction of a matching requirement. <br />d. Where the depreciation method is followed, the period of useful service (useful life) <br />established in each case for usable capital assets must take into consideration such factors as type <br />of construction, nature of the equipment used, historical usage patterns, technological <br />developments, and the renewal and replacement policies of the governmental unit followed for <br />the individual items or classes of assets involved. In the absence of clear evidence indicating that <br />the expected consumption of the asset will be significantly greater in the early portions than in <br />the later portions of its useful life, the straight line method of depreciation shall be used. <br />Depreciation methods once used shall not be changed unless approved by the Federal cognizant <br />or awarding agency. When the depreciation method is introduced for application to an asset <br />23 <br /> <br />