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What Every Departmental Administrator Needs to Know about F&A Proposals

What Every Departmental Administrator Needs to Know about F&A Proposals. Diane Winter, University of Michigan Julie Jarvis, University of Illinois. Overview of Cost Accounting Standards (CAS ) CAS 501 – Consistency in estimating, accumulating and reporting costs

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What Every Departmental Administrator Needs to Know about F&A Proposals

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  1. What Every Departmental Administrator Needs to Know about F&A Proposals Diane Winter, University of Michigan Julie Jarvis, University of Illinois

  2. Overview of Cost Accounting Standards (CAS) • CAS 501 – Consistency in estimating, accumulating and reporting costs • Consistent application of cost accounting practices; comparable transactions treated alike; facilitates reliable proposal budgets; important basis for reliable financial control… • CAS 502 – Consistency in allocating costs incurred for the same purpose • …in like circumstances; each type of cost allocated once and only on one basis; same criteria for all cost objectives; guards against overcharging and double counting… • CAS 505 – Accounting for unallowable costs • Costs expressly unallowable or mutually agreed to be unallowable shall be identified and excluded from any federal billing or claim… • CAS 506 – Cost Accounting Period • Educational institutions should generally use their fiscal year as their cost accounting period; reduces the effect of variations in the flow of costs within each cost accounting period; enhances objectivity, consistency, and verifiability; promotes uniformity and comparability …

  3. FACILITIES AND ADMINISTRATION (F&A) COST CALCULATION DIRECT COST BASES These become the denominator (base) in the rate calculations MODIFIED TOTAL COSTS Depreciation of Building & Equipment Operations & Maintenance(e.g. utilities, janitorial, repairs, security, grounds) Instruction (e.g. Prof. Salaries, TA, Training) Library (e.g. purchase of books & materials, librarian salaries) Organized Research (e.g. R&D costs separately budgeted & accounted for) General & Administrative (e.g. President’s Office, Controller, HR, Payroll, Legal) Student Services Administration (e.g. Admissions, bursar, Registrar, Student Health Other SponsoredProjects (e.g. community service projects, workshops, non- federal drug studies) Departmental Administration (e.g. Academic Dean’s Offices, Dept Chairs, admin & clerical staff, office supplies) Sponsored Project Administration (e.g. Pre-award office, Post-award office) Other Institutional Activities (e.g. athletics, dining halls, dorms, theaters) F&A COST POOLS After cross-allocations – these become the numerator in the rate calculations

  4. Overview of F&A Components Facilities • Utilities • Equipment • Buildings • Debt • Space Administration • Central • Departmental Unallowables F & A Costs = Rate Research Base

  5. Calculation of Research F&A Rate F&ACosts(overhead) = F&A Rate Organized Research Base (includes University Research) Committed Cost Sharing Sponsored project costs Overdrafts Salaries Over the Cap All direct expenses (MTDC) related to Organized Research University-funded competitive awards

  6. Fiscal Year 2012 Rate Schedule - Research

  7. What Every Administrator Needs to Know About F&A Rates & Calculations • F&A are real costs to the institution • To waive IC on grants/contracts is giving money away • It is NOT a tax • Space Survey is the major driver to allocate Facility Costs (uncapped) • Impact of Cost Sharing on the F&A Rate • Allowable vs. Unallowable (2 CFR, Part 220 / OMB Circular A-21, Section J) • Consistency • Optimizing institutional financial structure – object codes, functions • Impact of organization decisions on F&A

  8. What Every Administrator Needs to Know About F&A Rates & Calculations • Dept Admin’s are a valuable institutional resource • Dept Admin’s are key component of internal controls • Dept Admin’s are key part of internal control systems • Help drive institutional standards like separation of duties, integrity, objectivity, consistency • IC is essential to the partnership, strength of compliance and F&A proposal quality • In decentralized environments well structured accounting systems is an element of good IC • Dept Admin’scan positively or negatively impact institutional risk/exposure • Dept Admin’swith F&A knowledge can take federal cost reimbursement to a higher level • Institutions who look for Dept Admin’swith F&A knowledge for key leadership positions have a strategic advantage to institutions who do not

  9. QUESTIONS

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