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University of Georgia - Athens

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Title: No Slide Title Author: Gail Robertson Last modified by: Contracts and Grants Created Date: 6/2/1998 1:39:24 PM Document presentation format – PowerPoint PPT presentation

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Title: University of Georgia - Athens


1
University of Georgia - Athens
  • Cost Accounting Disclosure Statement
  • What is the Issue

2
Agenda
  • Brief background why are we doing this?
  • What are we going to do?
  • Who is going to be involved?
  • How will the process move forward?
  • Overview of A-21, Cost Accounting Standards and
    DS-2
  • Conclusion

3
Why - Federal History
  • ONR negotiates first set of cost principles with
    Universities in 1947
  • Original Circular A-21 issued in 1958
  • Many revisions between 1958 and 1994 attempted to
    impose tougher requirements for accounting for
    research effort and established standard indirect
    cost allocation standards. Base changed from SW
    to MTDC. Fixed rates.
  • 1994- CASB consistency standards/disclosure
    statement.
  • Requirement for DS-2 submission
  • Requirement for review and approval by Federal
    agency
  • Document must reflect current activities

4
Federal History contd
  • 1996 - 2003 Additional changes
  • FA cost pools
  • Animal care space
  • Cost sharing
  • Tuition remission
  • 2004 Codification of A-21
  • DCA selects DCAA to complete OIGs role
  • Audit scope to be defined
  • Project teams to be defined
  • DCAA staffed differently than OIG

5
UGA History
  • 1995-96 University prepares and submits DS-2 to
    Federal agency
  • 1996-2001 University awaits OIG review of DS-2
  • National review process moves slowly and
    inconsistently
  • UGA creates training program for A-21
  • Post Sept. 11, 2001 OIG activities redirected
  • 2001 UGA management concerned about 6 year old
    DS-2
  • University hires outside consultant to review
    DS-2
  • Areas of weakness identified
  • Direct cost
  • Inconsistent departmental costing
  • Time and Effort
  • Service centers
  • Cost Transfers

6
UGA History contd
  • 2003 University reviews consultant
    recommendations and action plan
  • 2004 UGA implements process to update DS-2 and
    supporting policies and procedures
  • Retains consultant to provide project training
    and support
  • Creates core committee to provide project
    sponsorship, final document review and approval
  • Reaches agreement with DCA that FY1996 DS-2 will
    be replaced with updated version by December 31,
    2004
  • Creates committees to address consultant review
    issues

7
Who is going to do this?
  • Core team selected based on experience, skills
    and knowledge
  • Core team provides potential candidates for
    project committees
  • Cross-campus committees should include where
    possible faculty participation

8
Who is going to do this? Contd
  • Cross-campus teams supported by personnel from
    Contracts and Grants Sponsored Projects and
    Accounting
  • Teams will have ongoing access to Universitys
    DS-2 consultant
  • Campus members selected based on experience,
    skills and knowledge

9
UGA Committees
  • Core (Res Comm Group)
  • Alan Darvil
  • Joe Crim
  • Steve Beech
  • Clif Pannell
  • Jerry Cherry
  • Jim Sweeney
  • Regina Smith
  • Chad Cleveland
  • Tracy Walters
  • Dale Wetzelberger
  • Effort Reporting/Cost Sharing
  • Mike Padilla
  • Kathy Shelnut
  • Tonia Gantt
  • Paula Tolbert
  • Mike Mispagel
  • Vicki Smith
  • Diana Shelnutt

10
UGA Committees contd
  • Service Centers
  • Chris King
  • Jerry Nesmith
  • Tammy Andros
  • Bill Stauff
  • Karen Barger
  • TBA
  • Direct Cost
  • Ted Gragson
  • Chiki George
  • Anuj Sinha
  • Peggy Peters
  • Kathy Vinson
  • Debra Rucker

11
Major Issues
  • Time and Effort/Cost Sharing
  • Timeliness
  • Accuracy
  • Appropriate signatures
  • Transfers
  • Committed cost sharing vs. uncommitted
  • Service Centers
  • User base
  • Rate discrimination
  • Costing vs. pricing
  • Business plan
  • Rate review and approval
  • UBIT

12
Major Issues contd
  • Direct Costing
  • Clerical salaries
  • General purpose equipment
  • Office supplies (inc computers supplies
  • P-cards
  • JV 90 days/explanations
  • Account close out
  • Exceptions major projects

13
What are we going to do? Contd
  • Modify documents based on campus input
  • Prepare final draft for core committee review
  • Modify policies and procedures based on core
    committee feedback
  • Outline training goals for implementation of new
    policies and procedures

14
What are we going to do? Contd
  • Prepare new DS-2 document reflecting current
    practices
  • Submit DS-2 to DCA by December 31, 2004
  • Prepare campus training programs for rollout of
    new policies and procedures
  • Plan for Federal audit of new DS-2
  • Maintain departmental compliance with UGA
    policies and procedures

15
How will the process move forward?
  • Select project team members
  • Assign committee specific areas of policies and
    procedures to review
  • Provide DS-2 and A-21 training to core and
    project committees
  • Project committees will set timing for initial
    meeting

16
How will the process move forward? Contd
  • Initial team meeting
  • Select team leadership
  • Identify resources
  • Review team objectives
  • Discuss DS-2 review report with UGA consultant
  • Provide team members copies of policies and
    procedures
  • Establish timeline for 12/04 submission
  • Assign member responsibilities

17
How will the process move forward? Contd
  • Team members review policies and procedures
  • Compare current practices to existing policies
    and procedures
  • Draft new policies and procedures to comply with
    Federal and State regulations
  • University consultant will review policy drafts
  • Make changes to draft based on consultant input

18
How will the process move forward? Contd
  • Submit revised draft to core committee for review
    and comment
  • Prepare final post-core committee draft for
    approval and adoption
  • Outline plan for implementation and training of
    campus on new policies and procedures
  • Design ongoing monitoring system to ensure
    compliance with new policies and procedures

19
How will the process move forward? Contd
  • Assemble new policies and procedures
  • Prepare draft DS-2 statement for review by Core
    Committee
  • Finalize DS-2 language
  • Prepare final DS-2 document package
  • Submit DS-2 to cognizant Federal agency
  • Wait for audit and approval

20
A-21 and DS-2 Overview
  • This segment is designed to give project
    committee members a broad look at what drives
    this process of updating University financial
    policies and procedures
  • The Cost Accounting Standards and the DS-2
    requirement are contained in A-21

21
Objectives of OMB Circular A-21
  • Establish standards for cost allocation
  • Establish standards for cost allowability
  • Identify Federal fair share of total costs
  • Require consistent treatment of costs
  • Clarifications
  • Does not supersede limitations imposed by law
  • Does not dictate how funds received should be
    spent
  • Does not dictate organizational form or
    management
  • Does not provide for recovering losses resulting
    from indirect cost reimbursement

22
General Standards for Cost Allowability
  • Reasonable costs
  • Prudent person test
  • Necessary for the operation of institution or
    project
  • Consistent with established policies and
    procedures
  • Allocable costs
  • Benefits sponsored project whole or in part
    (equipment).
  • Direct cost determined without undue effort or on
    any reasonable basis.
  • Consistent treatment - direct only or indirect
    only
  • Conform to limitations or exclusions under A-21
    or NGA

23
A-21 Terms
  • FA facilities and administrative (replaced
    indirect cost)
  • Facilities component calculated share of
    buildings, movable equipment, land improvements,
    interest, operation and maintenance and library.
  • Administrative component share of system,
    central, research, student and departmental
    administrative costs
  • MTDC modified total direct cost base is the
    adjusted direct dollars that the facil. And
    admin. costs are applied to calculate a rate.

24
FA Rate
  • Facilities and Administrative Cost Rate Formula
  • (Facilities and Administrative components)
  • (Sponsored Research MTDC)
  • Equals
  • The Calculated FA (indirect cost) Rate
  • Administrative caps 3.6 on faculty
    administrative salaries (1986) and 26 maximum
    admin. Component (1993)

25
Cost Accounting Standards
  • Nothing New!
  • OMB Circular A-21 requires
  • Consistency
  • Allowability
  • Certification

26
Cost Accounting Standards
  • Standards
  • 501 Consistency in estimating, accumulating and
    reporting costs
  • Are proposal costs consistent with actual cost
    accumulations?
  • 502 Consistency in allocating costs incurred for
    the same purpose
  • How is the expense related to the project?
  • 505 Accounting for unallowable costs
  • Will the sponsor pay for the expense?
  • 506 Cost accounting period
  • Is the full fiscal year used in estimating and
    accounting for costs?

27
What is a Disclosure Statement?
  • Documents cost accounting practices
  • Required to be submitted to cognizant agency and
    cognizant audit agency.
  • Supported by Policies and procedures,
    instructions, and guidelines for individual
    investigators, department heads, and
    administrators need to be made available because
    it is their responsibility to understand and know
    them.

28
What is a Disclosure Statement? Contd
  • A living document that is a timely reflection of
    University operations.
  • Identifies formal guidelines for charging costs
    to sponsored awards
  • Direct and Indirect costs
  • Cost-sharing policies
  • Time and effort reporting policies and procedures
  • Policies for Service Centers

29
Disclosure Statement is a Fiscal Roadmap
A comprehensive description of an organizations
cost accounting practices
General Information
CASB
Deferred Compensation/ Insurance Costs
Indirect Costs
Depreciation and Use Allowances
Leave Costs and Applicable Credits
30
DHHS DS-2 Bulletin!
  • DHHS has recently streamlined the Disclosure
    Statement (CASB Form DS-2) approval process.
  • DHHS has contracted with DCAA.
  • DCAA will soon begin working through the backlog
    and is contacting the colleges to perform audits
    of the DS-2s.
  • UGA is part of the backlog and an audit letter
    was received.
  • UGA DS-2 on hold effective June 8, 2004
    submission January 2005.

31
Major Audit Issues
  • Documentation of time and effort
  • Cost transfers 90 days
  • Cost sharing
  • NIH Cap cost sharing
  • Consistent treatment of clerical and admin.
    Salaries
  • Service/Recharge Centers

32
Cost Sharing
  • January 5, 2001 interpretation-
  • Mandatory and voluntary committed cost sharing is
    specifically pledged in the proposals budget or
    award. Does not include general expressions of
    support in proposal narrative or current and
    pending support pages. Does include of effort
    in NIH modular grant applications. Some level of
    faculty effort is expected and will be imputed,
    if absent.
  • Voluntary uncommitted cost sharing is faculty
    effort that is over and above that which is
    committed and budgeted for in a sponsored
    agreement.

33
Clerical and Administrative Salaries
  • Examples of Clerical and Administrative functions
  • Typing and mailing correspondence
  • Accounting and budgeting
  • Purchasing and tracking purchasing orders
  • Non-scientific software and system development
  • Processing vouchers
  • Routine travel related planning
  • Routine data entry and database maintenance
  • Typing newsletters and brochures
  • Typing applications for awards

34
Work/Project Meetings
  • Kick-off Week 8/16
  • Time and Effort/Cost Sharing
  • Tues. 8/17 3pm
  • Service Center Wed. 8/18 3pm
  • Direct Costing Thurs. 8/19 3pm

35
Work/Project Meetings
  • Initial meeting
  • Web-page
  • DS-2
  • A-21
  • PowerPoint Presentations
  • Meeting minutes
  • Work group specific issues
  • Example policies

36
Conclusion
  • A-21 sets the standards for consistency and
    allowability
  • Cost Accounting Standards require the University
    to certify their processes and be audited to
    those standards
  • Policies and Procedures are the heart of the
    process
  • Policies and Procedures need to reflect
    University operations and regulatory compliance
  • This is an important project that needs to be
    completed on time
  • Questions?
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