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Compliance with Federal Cost Accounting

Effective December 26th, 2014, OMB Circulars A-21, A-110 and A-133 will be replaced by regulations under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (also known as the Uniform Guidance).  Please refer to the University’s Uniform Guidance website http://spa.columbia.edu/uniform-guidance for further details that may supersede information outlined in this policy.  Revised policies will be posted once they are available.

 

Executive Summary

OMB Circular A-21 requires that Universities comply with a certain regulations, including four Cost Accounting Standards. These Standards are:

1. CAS 501: Consistency in Estimating, Accumulating and Reporting Costs2. CAS 502: Consistency in Allocating Costs Incurred for the Same Purpose3. CAS 505: Accounting for Unallowable Costs4. CAS 506: Cost Accounting Period

The Policy describes each of these requirements, the individuals responsible for compliance and how that compliance is to be carried out.

It should be noted that while this Policy is now being formally published in the Administrative Policy Library, the underlying provisions of the policy have been in effect for many years

Reason(s) for the Policy

To formalize guidance to Principal Investigators and others responsible for the administration of Sponsored Projects on the University's requirements for complying with Federal Cost Accounting Standards. Primary Guidance to Which This Policy RespondsCost Accounting Standards 501, 502, 505 and 506, as set forth in Appendix A of OMB Circular A-21: Principles for Determining Costs Applicable to Grants, Contracts and Other Agreements with Educational Institutions.

Responsible University Office & Officer

Office of the Controller

Jim Kemp, Associate Vice President

Revision History

Previous version dated January 1, 2008Latest revision dated July 9, 2012

Who is Governed by This Policy

Faculty and staff responsible for the administration of sponsored projects Controller's Office staff engaged in sponsored projects oversight

Who Should Know This Policy• All persons governed by this Policy {see above} • Departmental Administrators and other departmental staff • Deans and Departmental Chairs • Office of Research Administration staff • Office of the Controller staff

Exclusions & Special SituationsNone. Policy Text

Educational institutions that receive Federal grants and contracts must comply with certain Federal rules and regulations. OMB Circular A-21, entitled "Principles for Determining Costs Applicable to Grants, Contracts and Other Agreements with Educational Institutions", sets forth the governing rules for determining the various costs that can be charged to grants and contracts, and for establishing whether those costs may be charged directly, or charged through the application of the institution's Facilities and Administration (Indirect Cost) rate. Incorporated in the Circular specifically, and by reference as well, are four Cost Accounting Standards (CAS) which universities are required to comply with. These standards and the University's requirements for complying with those standards are as follows:

1. CAS 501: Consistency in Estimating, Accumulating and Reporting Costs

Principal Investigators and administrative support personnel must ensure compliance with this standard by maintaining consistency in the manner in which budgets are prepared during the proposal submission period, and how those funds are budgeted and expenses accounted for upon receipt and during the life of an award.

2. CAS 502: Consistency in Allocating Costs Incurred for the Same Purpose

The University must ensure compliance with this standard by ensuring that costs incurred for the same purposes, in like circumstances, must be given consistent treatment in the accounting system. For Principal Investigators and administrative support personnel, this requirement directly relates to the University's Policies on "Charging Administration & Clerical Salaries, Federal Grants & Contracts" and "Charging Office Supplies & other Administrative Expenses (other than Salaries) to Federal Awards". 3. CAS 505: Accounting for Unallowable CostsPrincipal Investigators and administrative support personnel must ensure compliance with this standard by insuring that those costs defined as "unallowable" are not directly charged to Federal projects, and when incurred in accordance with university policy, are charged to other funding sources and identified as "unallowable" so that those costs are excluded as well from the University's Facilities and Administration (Indirect Cost) rate. Specific guidance on this requirement is set forth in the University's Policy on "Project Administration - Unallowable Costs."4. CAS 506: Cost Accounting PeriodThis standard requires that the University comply with a number of rules governing how costs are treated for the purpose of calculating and negotiating the University's Facilities and Administration (Indirect Cost) and other institutional rates. Compliance with this Standard rests with the Controller's Office.