Advanced Studies in Cost Accounting Standards CAS

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Advanced Studies in Cost Accounting Standards
(CAS)
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Course Objectives

• Review of the Introductory Course Knowing CAS
  Basics and Important Definitions
• A Glimpse into the UVa CAS Disclosure Statement
  Costing Guidance
• Activity Specific Cost Items and Their Normal
  Classification
• Challenges in Direct Costing Gray Costs and the
  Big Five
• Key Elements of Sound Documentation and What
  Documentation is Required in Unlike
  Circumstances
• Key Points in the Decision Making Process
• Activity What Is Wrong or Right With These
  Examples?
• Positions That Will Not Help in Documenting
  Unlike Circumstances
• Roles and Responsibilities in the Process Where
  Do We All Fit In?
• Talking with Principal Investigators About
  Costing Decisions
• External Reviews Audit Approach and Success
• Activity Summary Case Study

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Direct Charging Computers and
Peripherals

• Scientific, technical computers are allowable as
  direct charges to the specific project receiving
  the scientific benefits.
• Academic faculty computers must be allocated
  based upon usage to research, instruction, and
  departmental activities (not a 100 allocation to
  research).

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A Look Back at CAS Basics The Big 5 Costs

• There are (5) cost items that often present
  challenges in decisions to direct charge. What
  are they?
• 1) Clerical/Administrative Salaries
• 2) Office Supplies
• 3) Postage
• 4) Professional Memberships
• 5) Communication Costs
• Give an example of when each of these costs might
  be an allowable DIRECT charge

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A Look Back at CAS Basics Facilities and
Administrative Costs

• 07/01/08-06/30/09 RESEARCH
• RATE COMPONENTS ON GROUNDS OFF GROUNDS
• FACILITIES
• Building Depreciation
  4.0
• Equipment Depreciation 4.3
• Interest 1.2
• Operations Maintenance 12.7
• Utility Cost Adjustment 1.3
• Libraries 2.0
• Total FACILITIES 25.5
• ADMINISTRATION
• General Administrative 6.4
  6.4
• Departmental Administration 17.1
  17.1
• Sponsored Projects Admin 2.5
  2.5
• Total ADMINISTRATION 26.0
  26.0
• TOTAL 51.5 26.0
• Capped by the government.

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A Look Back at CAS Basics Facilities and
Administrative Costs

• FA COSTS
• Building Allowance
• Operations Maintenance
• General Administration
• Research Administration
• Library Support
• Equipment Use Allowance
• Departmental Administration

• DIRECT COSTS
• Research Salaries Fringe
• Contracted Services
• Travel
• Fixed Charges
• Research/Education Supplies
• Current Services
• Subcontracts
• Cost Sharing

FA Costs Direct Costs
515,000
1,000,000
.515
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Time for a Breather! OSP Education Opportunities

• Workshops
• Effort Reporting An Introduction to the
  Concepts and U.Va. Practices
• Introduction to Cost Accounting Standards (CAS)
• Advanced Cost Accounting Standards (CAS)
• The ABCs and Ds of Cost Transfers Involving
  Sponsored Programs
• Working Successfully with Grants.gov
• Educational Outreach
• OSP Resource Library
• Introduction to Export Controls - Web PowerPoint
  presentation
• Certified Research Administrators (CRA) Study
  Sessions
• NCURA Video Teleconferences
• A Primer on Sponsored Programs Administration
• Monthly Brown Bag Discussions
• Under Construction
• Comprehensive Education Program - Certification

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Key Elements of Sound Documentation

• Documentation Should
• Tell a Story
• Quantify the Circumstance (, , )
• Be Complete
• Be Adequate
• Be Timely
• Be in Support of Other Documents
• Be Available Upon Request

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CAS Documentation UVa Required Forms

• Part Three of the Internal Proposal Routing Form
  (Goldenrod) Cost Accounting Standards Exception
  Request Form
• Supplemental Cost Accounting Standards Exception
  Request Form

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Key Points in the Decision Making Process

• Consult and understand all applicable terms and
  conditions (regulations, laws, UVa practices,
  etc)
• Be clear on PURPOSE vs. NEED
• Make judgments on any questionable costs based
  upon key definitions (direct allowable
  reasonable allocable)
• Document your decisions and when necessary,
  complete required UVA documentation ensuring
  written justification/approval of the decision
• PROVIDES for 1) a sound budget and 2) support of
  what are considered by the Institution as
  allowable costs

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Group Activity and Discussion

• Consider each of the following situations. Use
  only the information that is present and
  determine what is right and what is wrong with
  each circumstance.
• Would you approve for a CAS exception as
  presented?

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Positions That Will Not Help in Documenting
Unlike Circumstances

• The Sponsor will not pay FA
• Counter Point
• Sponsor is willing to pay for this item as a
  direct charge
• Counter Point
• We really need (fill in the blank).
• Counter Point
• FA recoveries are not returned to me or my
  Department so I am not double billing the sponsor
• Counter Point

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CAS Documentation Statements That Alone Do Not
Add Relevance or Support

• The cost item is needed for the research at hand
  or to meet the aims of the research
• The cost item was previously budgeted and
  approved by the Sponsor
• The item will be solely dedicated to research
• The cost directly benefits the technical goals
• The item will allow greater flexibility for the
  work to occur and meet technical goals
• The item will ensure safety and provide
  conveniences in communication for research
  personnel

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Talking with the PI About Costing Decisions

• Be prepared to discuss FA costs
• - Partial recovery for costs that have already
  been incurred by the University
• - Not an imputed tax for doing research
  Supportable costs from University and
  Departmental funds
• - Quote A-21 F.6(b) when necessary
• CAS did not change costing issues only
  heightened awareness and increased audit risks
• Need versus purpose of the award and related costs

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Talking with the PI About Costing Decisions

• When discussing potential gray costs ask, what
  technical objectives could not be accomplished
  without those costs being incurred
• Talk about usage and allocation (with every cost)
• Be sympathetic to reality.but separate funding
  issues from costing issues
• Even the smallest charge can become a significant
  audit finding if charged inaccurately
• Documentation of unlike circumstances should be
  easy to achieve

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Funding Issues Should Not Be Confused with
Costing Issues !!
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External Reviews Audit Approach
Audits can be done on individual awards or take
on a more global approach as would occur during a
CAS consistency review. Auditors would perform
judgmental sampling on select high risk
costs Any findings would be noted and
extrapolated over the entire research expenditure
base Finding in audit report would read that
the University was not in compliance with
Circular A-21 or the approved DS-2 in the direct
charging of costs to Federal awards
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External Reviews A Successful Experience

• Knowledge and application of sponsor regulations
  and University policies/procedures
• Documentation for charges
• Appropriate reviews/approvals
• Clear and complete audit trails
• Organized and complete project files

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External Reviews Audit Approach
Who You Gonna Call? OSP.. Vonda Durrer or
Sharon Boyd
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Course Objectives

• Review of the Introductory Course Knowing CAS
  Basics and Important Definitions
• A Glimpse into the UVa CAS Disclosure Statement
  Costing Guidance
• Activity Specific Cost Items and Their Normal
  Classification
• Challenges in Direct Costing Gray Costs and the
  Big Five
• Key Elements of Sound Documentation and What
  Documentation is Required in Unlike
  Circumstances
• Key Points in the Decision Making Process
• Activity What Is Wrong or Right With These
  Examples?
• Positions That Will Not Help in Documenting
  Unlike Circumstances
• Roles and Responsibilities in the Process Where
  Do We All Fit In?
• Talking with Principal Investigators About
  Costing Decisions
• External Reviews Audit Approach and Success
• Activity Summary Case Study

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QUESTIONS?