Code of Federal Regulations Title 2. Grants and Agreements § 2.2900.3 Questioned cost

(a) Which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds;

(b) Where the costs, at the time of the audit, are not supported by adequate documentation;  or

(c) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.