Predetermined formula related to direct project costs


Why would a grantor not permit general municipal overhead to be charged to a capital project financed by its grant or insist that allowable (reimbursable) overhead be calculated by means of a predetermined formula related to direct project costs?

Use the following as a source:

Weekly reading/text is accessible at the following site (E.-Book – Governmental and Non-Profit Accounting, 10th Edition Chapters 7 & 8): 

https://online.vitalsource.com/signin?return=/books

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Other Subject: Predetermined formula related to direct project costs
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