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the proceeds to offset the cost of the replacement property. <br />16.Fines and penalties. Fines, penalties, damages, and other settlements resulting from <br />violations (or alleged violations) of, or failure of the governmental unit to comply with, Federal, <br />State, local, or Indian tribal laws and regulations are unallowable except when incurred as a <br />result of compliance with specific provisions of the Federal award or written instructions by the <br />awarding agency authorizing in advance such payments. <br />17.Fund raising and investment management costs. <br />a. Costs of organized fund raising, including financial campaigns, solicitation of gifts and <br />bequests, and similar expenses incurred to raise capital or obtain contributions are unallowable, <br />regardless of the purpose for which the funds will be used. <br />b. Costs of investment counsel and staff and similar expenses incurred to enhance income from <br />investments are unallowable. However, such costs associated with investments covering pension, <br />self-insurance, or other funds which include Federal participation allowed by this Circular are <br />allowable. <br />c. Fund raising and investment activities shall be allocated an appropriate share of indirect costs <br />under the conditions described in subsection C.3.b. of Attachment A. <br />18.Gains and losses on disposition of depreciable property and other capital assets and <br />substantial relocation of Federal programs. <br />a. (1) Gains and losses on the sale, retirement, or other disposition of depreciable property shall <br />be included in the year in which they occur as credits or charges to the asset cost grouping(s) in <br />which the property was included. The amount of the gain or loss to be included as a credit or <br />charge to the appropriate asset cost grouping(s) shall be the difference between the amount <br />realized on the property and the undepreciated basis of the property. <br />(2) Gains and losses on the disposition of depreciable property shall not be recognized as a <br />separate credit or charge under the following conditions: <br />(a) The gain or loss is processed through a depreciation account and is reflected in the <br />depreciation allowable under sections 11 and 15. <br />(b) The property is given in exchange as part of the purchase price of a similar item and the gain <br />or loss is taken into account in determining the depreciation cost basis of the new item. <br />(c) A loss results from the failure to maintain permissible insurance, except as otherwise <br />provided in subsection 22.d. <br />(d) Compensation for the use of the property was provided through use allowances in lieu of <br />depreciation. <br />b. Substantial relocation of Federal awards from a facility where the Federal Government <br />27 <br /> <br />