Eligible Project Costs

(1) Costs which the Department determines are necessary for the completion of the project are eligible for financing in the loan and to receive a subsidy under the loan. (2) Costs which the Department determines are not necessary for completion of the project are ineligible for financing in the loan. (3) The Department will base its eligible project cost determinations on its "Policy on Eligible Project Costs", which identifies the specific types of costs that are within the two categories under 310 CMR 44.08(1) and (2). (4) Project costs incurred by an applicant prior to the date of issuance of the Department's project approval certificate are not eligible for a subsidy under the loan, except as follows: (a) Preliminary engineering, comprehensive wastewater management planning, design or related professional services and construction work, may be approved by the Department prior to the issuance of a project approval certificate as project costs eligible for subsidy if: 1. the applicant has submitted a written and adequately substantiated request for approval; 2. written approval by the Department is obtained before initiation of the project and award of any loan for the project; and 3. the project is included and maintains its status on the current calendar year priority list. (b) The Department's prior approval of costs in accordance with 310 CMR 44.08(4)(a) does not constitute a commitment to approve financial assistance for any project. Instead, such costs will be considered eligible project costs only if a loan is made by the Trust for the project. Accordingly, an applicant receiving the Department's prior approval of costs in accordance with 310 CMR 44.08(4)(a) proceeds at its own risk. (5) Costs incurred in excess of the approved project costs are not eligible for financing by the loan, unless the project approval certificate and the loan are both amended to include the cost increase. (6) A loan recipient shall exercise its best efforts to accomplish the work program set forth in the loan within the loan amount. Whenever a loan recipient reasonably believes that its project costs will exceed or be substantially less than the approved loan amount, it must promptly notify the Department in writing. The loan recipient must submit revised cost estimates for the project to the Department as soon thereafter as practicable. Neither the Department, nor the Trust, is under any obligation to approve costs in excess of the amount previously approved in the project approval certificate and loan. (7) The final eligible project costs shall be the eligible costs approved by the Department upon completion of the project, unless audited. If such project costs are audited, the final eligible costs shall be the eligible costs approved by the Department at the completion of the audit.