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(3) Costs that are unallowable under subsection (1) of this section are allowable using state funds <br />if all of the following conditions are met: <br />(a) The contract includes state funds at least equal to the total amount of all items of <br />cost under consideration; <br />(b) If the costs are incurred by a subcontractor, the subcontract document clearly indicates <br />only state funds are included in the subcontract; and <br />(c) The cost is otherwise allowed. <br />Washington State Page 85 HCA Contract No. K3924 <br />Health Care Authority <br />