- (a) Interest shall be an allowable cost subject to (b) through (e) below.
- (b) Necessary interest and proper interest as defined in He-E 806.01 on both current and capital indebtedness shall be an allowed cost.
- (c) To be allowable, interest expense shall be incurred on indebtedness to lenders or lending organizations not related through control, ownership, affiliation, or any personal relationship to the borrower.
- (d) Interest expense shall be reduced by interest income.
- (e) With respect to loans receivable from an officer, related person, or organization, interest income shall include interest earned on such loan imputed at a rate equal to the highest rate payable on loans payable by the NF.
- (f) The imputed interest described in (e) above shall not be calculated on disallowed borrowing.
Source. #8547, eff 1-24-06 (formerly He-W 593.12); ss by #10474, eff 1-24-14; ss by #14020, eff 7-10-24