The Cost Accounting Standards Board (CASB) within the Office of Management and Budget (OMB) issued four cost accounting standards for educational institutions. In April 1996, OMB Circular A-21 incorporated these four cost accounting standards. Appendix of A-21 provides details on the CAS, which are codified in part 99905 of 48 CFR 99. Since the CAS are now part of A-21, awards subject to A-21 are also subject to the CAS (see A-21, section A.3 "Application").
The following table lists the title and purpose of each cost accounting standard:
CAS |
Title |
Purpose |
501 |
Consistency in estimating, accumulating and reporting costs by educational institutions |
To ensure that cost accounting practices for estimating costs in a proposal are consistent with cost accounting practices for accumulating and reporting costs. |
502 |
Consistency in allocating costs incurred for the same purpose by educational institutions |
To ensure that each type of cost is allocated only once and on only one basis to any sponsored project or other cost objective. |
505 |
Accounting for unallowable costs - educational institutions |
To facilitate all aspects of sponsored projects by establishing guidelines covering the identification and treatment of unallowable costs. |
506 |
Cost accounting period - educational institutions |
To provide criteria for the selection of the time periods to be used as cost accounting periods for sponsored project cost estimating, accumulating, and reporting. |
The objectives of the CAS are to:
The CAS are concerned with consistency in cost accounting with respect to the:
Since sponsored program management practices need to comply with the CAS, operating locations should:
Each requirement is described in the blocks that follow.
Note: When implementing the above requirements, Research Foundation staff may need to collaborate with corresponding State University of New York (SUNY) staff at operating locations.
Since practices used in estimating costs in proposals should be consistent with the practices used in accumulating and reporting costs, operating locations should establish written policies that identify their cost accounting practices (regardless of the requirement to provide a written disclosure statement.
Note: Due to the complexity of establishing cost accounting policies, operating locations can contact the Treasurer's Office for assistance.
These cost accounting policies should include the operating location's treatment of direct and indirect costs. The following block describes some direct and indirect cost treatment issues. (Refer to "Guidelines for Determining Direct and Facilities & Administration (F&A) Costs" for definitions and additional information on direct and indirect costs.)
When establishing their treatment of costs, operating locations should pay close attention to costs "normally treated" as indirect. The following list (from A-21, section F6b) includes specific examples of these costs:
For further details and examples refer to Exhibit A.
Due to federal government scrutiny of these costs, operating locations should ensure that their cost sharing and recharge rates for service centers are appropriate and properly documented.
For more information on cost sharing, refer to the procedures on cost sharing under the Grants Management business area.
For more information on recharge rates, refer to "Service Center Guidelines."
Operating locations should communicate their cost accounting policies to appropriate campus personnel and establish a process to monitor their cost accounting practices to ensure compliance with the policies they have established based on the CAS. "Appropriate campus personnel" includes, but is not limited to:
Educational institutions are required to prepare a disclosure statement (CASB-DS-2) when the institution receives
The purpose of the CASB-DS-2 is to provide an adequate written disclosure of the institution's accounting practices, cost accounting practices, treatment of direct and indirect costs, and the basis for their indirect cost allocations. In this context, adequate disclosure means the accounting practices are current, complete, and accurate.
CAS requirements flow down to subrecipients of CAS-covered awards. The clause "Compliance with Laws and Regulations: General Obligations" in the Research Foundation's standard cost reimbursable subcontract and subgrant agreement serves as the flowdown mechanism.
This exhibit further describes costs listed in A-21, section F6b, that are "normally treated" as indirect costs.
Although normally treated as indirect, these costs can be charged directly. Operating locations who charge these costs directly must consider if each cost:
The following blocks include examples of costs normally treated as indirect, and, where applicable, instances when they may be directly charged.
The costs of general office supplies such as pencils, pens, paper clips, memo pads, and file folders, are normally treated as indirect costs.
The direct charging of office supply costs may be appropriate for such costs as research notebooks and computer paper used for a specific project.
The costs of postage for routine correspondence are normally treated as indirect costs.
The direct charging of postage cost may be appropriate for such costs as the shipment of materials, bulk mailings, and mailing of deliverables.
The costs of basic service and local calls are normally treated as indirect costs.
The direct charging of local telephone costs may be appropriate for such costs as a separate telephone line dedicated solely for the performance of a sponsored project.
Note: Long distance toll charges that are reasonable and necessary to the perfomance of a project may be charged directly either by identifying them individually to the project they benefit, or on a proportional basis using documented, reasonable methods.
The costs of an institution's memberships in or subscriptions to business, technical, and professional organizations or periodicals are normally treated as indirect.
The direct charging of institutional and individual memberships or subscriptions costs is rarely appropriate. Operating locations who want to charge these costs directly should ensure that all criteria for direct charging are met.
The salaries of administrative and clerical staff are normally treated as indirect costs.
Direct charging of these costs would only be appropriate where a major project or activity explicitly budgets for administrative or clerical services and persons involved can be specifically identified with the project or activity. The following examples illustrate circumstances where direct charging the salaries of administrative or clerical staff may be appropriate.
These examples are not exhaustive nor are they intended to imply that direct charging of administrative or clerical salaries would always be appropriate for the situations illustrated in the examples.
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