ALLOWABLE EXPENDITURES BY PROGRAM

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ALLOWABLE EXPENDITURES BY PROGRAM

• DAN NORDQUIST, OGRD
• MARY HOFFMAN, CAHNRS
• SEPT. 30, 2004

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WHAT IS A PROGRAM?

• The various operating functions within the
  University (e.g., instruction, administration,
  and plant operation)
• The 3rd set of numbers/letters in an account code
• Fund-subfund-program-budget-project
• 148-01-09A-4100-4101

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EXPENDITURE GROUPS

• APPROPRIATED FUNDS
• 01A THRU 10Z
• SPONSORED PROJECTS
• 11A THRU 14Z
• OTHER ENTEPRISES
• 15A THRU 15Z
• ASSOCIATED STUDENTS
• 16A THRU 16Z

• DEVELOPMENT FUNDS
• 17A
• AGENCY ACCOUNTS
• 17C
• SERVICE FUNDS
• 19
• COMPUTING SERVICES
• 19B

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CAN I ???

• When evaluating an expenditure for
  appropriateness
• Make sure purchase is allowable within the
  program. For purchases in programs 11-14,
  review the sponsors restrictions
• Review pertinent WSU procedures
• CONTACT BFO FOR ASSISTANCE

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PURCHASES ON SPONSORED PROJECTS
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PROGRAMS 11A THRU 14Z

• Federal research and Federal other (11 and 12)
• Non-federal research and non-federal other (13
  and 14)

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EXPENDITURES ON SPONSORED PROJECTS

• Must conform to budget approved by sponsor.
• Most federal budgets, especially for grants, are
  broad, some dont even require submission of
  categorical budgets to agency.
• They will refer to terms and conditions
• May provide for rebudgeting

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EXPENDITURES ON SPONSORED PROJECTS

• Non-federal budgets vary.
• May include terms and conditions or can be a
  letter
• Often dont address rebudgeting

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CREATING FLEXIBILITY

• Planning is the key know what you need to do at
  pre-award to make life easier at post award.
  This is time well spent.
• Understand what the sponsor will allow
• Do specific types of expenditures require
  justification? (FA costs on federal awards)
• What changes does the sponsor allow after making
  an award? Is it clear? Can I make it more
  clear?
• GET IT IN THE PROPOSAL

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RESOURCES

• OGRD MEMORANDUM 24 Cost Determination
  Guidelines for Sponsored Agreements
• Award Letter
• BFO
• SPS

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COST DETERMINATION GUIDELINES FOR SPONSORED
AGREEMENTS

• OMB Circular A-21 Cost Principals for
  Educational Institutions
• Cost Accounting Standards
• OMB Circular A110 Uniform Administrative
  Requirements for Grants and Agreements with
  Institutions of Higher Education

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COST DETERMINATION GUIDELINES FOR SPONSORED
AGREEMENTS

• University delegates authority for fiscal
  compliance to PIs and Departments (OGRD Memo 20)
• Requires development of significant expertise at
  all levels.

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ALLOWABLE COSTS

• Reasonable
• Allocable
• Consistent
• Direct and FA costs treated like in like
  circumstances
• Within limitations specifically defined in
  Circular A-21 and the particular contract or
  agreement in terms of cost and amount charged

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DISTRIBUTION OF COSTS BETWEEN SPONSORED PROJECTS

• Proportional Benefit Rule
• Interrelationship Rule

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DIRECT COSTS

• Costs that can be identified specifically with a
  particular sponsored project.
• The specific grant or contract gains explicit
  benefit from the cost for a specific programmatic
  purpose.
• Direct costs require an action for expense to
  show (i.e. purchase order, appointments, tevs,
  etc).

16
FACILITIES AND ADMINISTRATIVE COSTS

• Costs incurred for common or joint objectives
• Can not be identified readily and specifically
  with a particular sponsored project
• FA costs require no action, they are attached
  to direct charges. Go to the FA pool.

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CONSISTENT TREATMENT

• Required by OMB Circular A-21
• Assure that same types of costs no charged to
  grants and contracts as both Direct and FA
• Government doesnt want to pay twice
• Reinforced by CAS 502
• Cost Accounting Standards requires institutions
  to complete a disclosure statement to document
  policies regarding classification of a cost as
  direct or FA.

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SPECIAL CIRCUMSTANCES

• Costs normally considered FA costs may be
  charged directly to sponsored projects when
• Project has special need for item or service
• Costs can be specifically identified to the work
• Costs are specified in the proposed budget and
  the circumstances are described in proposal
• Sponsoring agency accepts the costs as part of
  the projects direct cost budget.

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EXTENSION SPONSORED PROJECTS

• Normally Extension units use off-campus rate
  (22.3) which represents the A or
  administrative portion of FA.
• Means that facilities charges may be directly
  charged to sponsored programs.
• Must find way to determine proportional benefit.
• Can charge directly (pay vendor directly from
  award)
• Use service center (Energy Program)

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COSTS NORMALLY CONSIDERED DIRECT

• See OGRD Memo 24
• Salaries, wages, fringe benefits
• Supplies and Materials
• Other

21
COSTS NORMALLY CONSIDERED ADMINISTRATIVE

• Administrative and Clerical Salaries
• Office supplies, postage, basic telephone
  services, memberships.

22
COSTS NORMALLY CLASSIFIED AS ADMINSTRATIVE

• May be treated as direct costs under certain
  exceptional and unlike circumstances if the
  circumstances meet definition of a major project.

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COSTS NORMALLY CLASSIFIED AS ADMINSTRATIVE

• Large, complex programs such s General Clinical
  Research Centers, Primate Centers, environmental
  research centers
• Projects that involve extensive data
  accumulation, analysis and entry, etc.
• Projects that require making travel and meeting
  arrangements for large numbers of participants
  such as conferences and seminars.

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COSTS NORMALLY CLASSIFIED AS ADMINSTRATIVE

• Projects whose principal focus is the preparation
  and production of manuals and large reports.
• Projects that are geographically inaccessible to
  normal departmental administrative services such
  as seagoing research vessels, astronomy projects,
  other remote sites.

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COSTS NORMALLY CLASSIFIED AS FACILITIES

• Building Depreciation
• Electricity
• Basic Phone Service
• Custodial Services

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COSTS NORMALLY CLASSIFIED AS FACILITIES

• May be treated as direct costs under certain
  circumstances.
• If the off-campus rate is applied to the award.
• Situations described in previous Special
  Circumstances slide.

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• QUESTIONS?

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PURCHASES ON STATE AND FEDERALLY APPROPRIATED
FUNDS
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APPROPRIATED FUNDS(Programs 01A thru 10Z)

• Allowable Purchases
• Goods and services which are necessary for
  completion of official university duties.
• Job related supplies, services and equipment,
  special protective clothing, uniforms, travel,
  relocation costs.

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APPROPRIATED FUNDS(Programs 01A thru 10Z)

• Special Licenses, documents, etc. which are
  required to complete job IF not notified of the
  need for such documents prior to hiring.
• Special driver licenses, passports, ID cards

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APPROPRIATED FUNDS (cont.)

• Non-allowable expenditures
• Any purchase not for official WSU business
• Grocery items, flowers, coffee makers, alcoholic
  beverages
• Transactions which result in economic benefit to
  a state employee.
• Purchases for the employees personal use.

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EXPENDITURES ON SERVICE CENTERS
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SERVICE CENTERS(Programs 07 and 15)

• Programs 07 vs. 15
• Allowable expenditures same as programs 01A thru
  10Z

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SERVICE CENTERS(Programs 07 and 15)

• Available funds should be first used to pay
  expenses defined in budget provided in
  application.
• Salaries, wages, benefits for service center
  personnel
• Goods and services related to activity
• Equipment depreciation
• Balances can be used to support other programs in
  area.

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EXPENDITURES ON WORKSHOP/CONFERENCE ACCOUNTS
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WORKSHOPS CONFERENCES(Programs 09G and 14_)

• Available funds should be first used to pay
  expenses defined in budget provided in
  application.
• Salaries for conference facilitators,
  administrators
• Goods and services related to conference
  including food, alcohol, items for personal use
  (t-shirts)
• Balances can be used to support other programs in
  area.

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EXPENDITURES ON DEVELOPMENT FUNDS
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DEVELOPMENT FUNDS (17A)

• Expenditures from discretionary accounts must
  benefit WSU, supporting one or more of the
  University's missions of research, education, and
  public service. The use must conform with the
  donor's intent for the gift. Additionally, such
  expenditures must meet the test of public
  scrutiny for appropriateness.

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GENERAL PROVISIONS FOR SELECTED ITEMS OF COST

• Refer to handout