Accounting for Federal Grants and Contracts

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Accounting for Federal Grants and Contracts

Presented by Hilarie Connolly Healthcare Life
Sciences Practice
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Pre Post Accounting

• Importance of Pre-Award Accounting
• Budget SBIR or grant application project
• Need to request for all available types of award
• Direct Costs
• Indirect Cost Rate
• Unique to each organization
• Indirect Cost Proposal must be approved by
• Division of Financial Advisory Services (DFAS)
• Office of Acquisition Management and Policy
• Grant award amount is different from indirect
  cost submission
• Problematic for DFAS

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Project Costs
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Initial for Procedures for Post Award

• Review the information in the contract document
• Regulations
• Funding arrangement
• Indirect Cost Request
• Potential refunds
• Audit clauses
• Reporting Requirements
• Tracking SBIR costs

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Regulations

• Federal acquisition regulations (FAR)
• NIH NIAID
• DFARS
• Other agency supplements
• OMB A122 Not for Profit Organizations
• OMB A-21 Universities
• OASC-3 - Guide for hospital research
• Cost Accounting Standards (CAS)
• GAAP

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Cost Accounting Systems

• Record cost of transaction
• Cash received spent
• Distribute to cost objectives
• Amount utilized for each project
• Integrate production into accounting records
• Ability to report usage to government

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Labor Material Costs

• What did you do with your time ?
• Are you working on more than one grant ?
• How do you track your administrative time ?
• Need to report administrative time
• Billing, proposals, managerial tasks
• What materials equipment are needed for your
  project ?
• Are they purchased to be used on one project ?

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Direct Costs

• Identified with a particular final cost objective
• Labor cost
• Material
• Other Direct Costs
• Travel
• Special Purchases

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Supporting Documents

• Labor costs - time report
• Identify productive non-productive time
• Record direct costs to project Indirect cost to
  overhead
• Used to justify amount billed
• Integrity of labor charge resides with employee
• Other direct costs - invoice from vendor
• Transactions identified to project or overhead
  group
• Identify purpose of item or service purchased

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Indirect Costs

• Identified with
• Two or more final cost objectives, or
• At least one intermediate cost objective
• Indirect costs
• Labor administrative time
• Benefits health plans, vacation, holidays,
  payroll taxes
• Other - rent, utilities, equipment depreciation

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Accounting For Indirect Costs

• Cost pools
• Homogeneous groupings
• Allocation Base
• TCI
• Value-added
• Single element
• Resource consumption

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Indirect Cost Rate

• Rate structure alternatives
• Single rate
• Two indirect rates
• Multiple rates, including service centers
• Service Center Rate

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Project /Job Order Costing

• Distinct final cost objectives
• Labor
• Material
• Other direct costs charged by item
• Indirect costs allocated

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Project Costing