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b. Donated services received: <br />(1) Donated or volunteer services may be furnished to a governmental unit by professional and <br />technical personnel, consultants, and other skilled and unskilled labor. The value of these <br />services is not reimbursable either as a direct or indirect cost. However, the value of donated <br />services may be used to meet cost sharing or matching requirements in accordance with the <br />Federal Grants Management Common Rule. <br />(2) The value of donated services utilized in the performance of a direct cost activity shall, when <br />material in amount, be considered in the determination of the governmental unit's indirect costs <br />or rate(s) and, accordingly, shall be allocated a proportionate share of applicable indirect costs. <br />(3) To the extent feasible, donated services will be supported by the same methods used by the <br />governmental unit to support the allocability of regular personnel services. <br />13.Employee morale, health, and welfare costs. <br />a. The costs of employee information publications, health or first-aid clinics and/or infirmaries, <br />recreational activities, employee counseling services, and any other expenses incurred in <br />accordance with the governmental unit's established practice or custom for the improvement of <br />working conditions, employer-employee relations, employee morale, and employee performance <br />are allowable. <br />b. Such costs will be equitably apportioned to all activities of the governmental unit. Income <br />generated from any of these activities will be offset against expenses. <br />14.Entertainment. Costs of entertainment, including amusement, diversion, and social activities <br />and any costs directly associated with such costs (such as tickets to shows or sports events, <br />meals, lodging, rentals, transportation, and gratuities) are unallowable. <br />15.Equipment and other capital expenditures. <br />a. For purposes of this subsection 15, the following definitions apply: <br />(1) "Capital Expenditures” means expenditures for the acquisition cost of capital assets <br />(equipment, buildings, land), or expenditures to make improvements to capital assets that <br />materially increase their value or useful life. Acquisition cost means the cost of the asset <br />including the cost to put it in place. Acquisition cost for equipment, for example, means the net <br />invoice price of the equipment, including the cost of any modifications, attachments, accessories, <br />or auxiliary apparatus necessary to make it usable for the purpose for which it is acquired. <br />Ancillary charges, such as taxes, duty, protective in transit insurance, freight, and installation <br />may be included in, or excluded from the acquisition cost in accordance with the governmental <br />25 <br /> <br />