Transcript A-21 and CASB - University of Georgia

Disclosure Statement Training:
Departmental Administrators & Business Managers
Basic Understanding of A-21, CASB,
and DS2
Disclosure Statement Training:
Departmental Administrators & Business Managers
Presentor:
Carolyn B. Taylor, Contracts and Grants Division
([email protected])
Disclosure Web Site:
www.busfin.uga.edu/disclosure
All Policies and Procedures related to the University Disclosure Statement
may be found under the Disclosure Policies and Disclosure Procedure links
Policies are effective January 1, 2006
Training Offered
 Beginning in March 2006
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Basic Understanding of A-21, CASB, and DS2
Cost Transfers, Program Income, & Cost Share
Direct and F&A Costs
Time and Effort Reporting
Service Centers
Account Maintenance & Close-out
You are Here
 Beginning in March 2006
 Basic Understanding of A-21, CASB, and DS2
Why are you here?
What you should gain?
 A better communication between C&G
and departmental
administrators/business managers
concerning the new policies.
 A better understanding of how A-21
and CASB effects what we do.
Course Objectives
 1. What is A-21, CASB, and DS2?
 2. Provide a basic understanding of DS2, CASB, and
OMB A-21 and how they fit together.
 3. Will I ever use this in my Job?
 4. Why are they important to me?
 5. How can I ensure financial compliance?
 6. Understanding the roles of OSP, Principle
Investigators, Departments Administrators and Business
Managers and Contract & Grants.
Definitions
 What is A-21, CASB, and DS2?
 A-21 is the cost principles for higher
institutions as defined by the Office of
Management and Budgets (OMB).
 CASB is the Cost Accounting Standard
Board.
 DS2 is required for institutions of higher
education and it states UGA’s policy and
procedures regarding cost accounting
practices.
What is DS2(Disclosure Stmt 2)?
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Documents and discloses the University cost accounting
practices
Required to be submitted to cognizant agency and
cognizant audit agency.
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.
Provides Guidelines for “charging costs to sponsored
awards”
 Defines University direct costing policies and procedures
 Cost-sharing policies
 Time and effort reporting policies and procedures
 Policies on “Service Centers”
How was it Developed?
 Three working group committees
were formed comprised of College
and Departmental Business Managers
and Faculty representatives
 Steering Committee comprised of
Associate/Assistant Deans,
Department Head, and Center
Director representatives
What does it do?
 New Policies
 Cost Transfer
 Program Income
 Service Center
 Existing Policies – Revised
 Cost Share
 Direct Cost
 Personnel Activity Report
What brought about the DS2?
 A-21, A Federal Policy Document issued
by OMB (Office of Management and
Budget) which all Universities nationwide must follow.
 I thought it was just UGA?
Governing Body
 Federal funding is appropriated by
Congress, and it is allocated by the
Office of Management and Budget
(OMB).
 The office of Management and Budget
ensures proper stewardship of federal
funding through prescribed cost
principles, and administrative and
audit requirements. (A-21, A-110,
and A-133)
What is OMB Circular A-21?
 Issued in 1958 by Office of
Management and Budget
 Federal effort to establish government
wide cost principles
 Applicable to research and
development grants, contracts and
other funding agreements with
educational institutions.
 It has undergone numerous revisions
in 44 years.
May,1994 A-21 Revisions
 “Facilities & Administrative costs”
replaced the phrase “indirect costs”
 Four Cost Accounting Standards
(CAS) applicable to educational
institutions incorporated into A-21
 Institutions receiving more than $25
million in federal sponsored
agreements must submit a Disclosure
Statement.
What is the purpose of the A-21?
 The A-21 tells us what we need to do.
It tells us we must be consistent.
 Defines allowable and unallowable
costs
 Defines methods of F&A cost rate
identification and calculation.
 http://www.whitehouse.gov/omb/circulars/index.html
Who cares?
 Will I Ever Use this in my job?
 Each of us are fiscal agents of the
University
 It is everyone’s responsibility to be
knowledgeable of University Policies and
Procedures
 Ignorance of the policies and procedures
is not an excuse for not following them.
Why do I care about the rules?
 University of Alabama - $3.4 million in fines
for applying resources from an existing
grant toward a new project
 Harvard University- $3.3 million settlement.
Improper Accounting on Federal Grant for
“effort reporting” or “salary accounting”
 Northwestern University - $5.5 million
settlement
 Johns Hopkins University - $2.6 Million
Settlement
What does the A-21 Cost Principles
do?
Requires a cost
 Be allowable
 Be allocable
 Be reasonable (prudent person test)
 Be treated consistently
 Be necessary to perform the aims of
the project
 Be permissible under the law
Specific Rules on Cost Allowability
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Section J of Circular A-21 (hand out)
Currently describes 54 types of costs
Alphabetical order
For some costs, also specifies
approval requirements,
documentation and other provisions.
What can I do to ensure financial
compliance for federally funded
projects?
Ask yourself the following questions:
 Are you direct charging costs that are
facility and administrative (F&A)?
Toner or paper for the printer, General
office supplies or equipment
 Are you shifting costs from grant to
grant to use up the balance?
 Are you charging salaries of individuals
who do not work on the project?
Questions to ask (con’t)
 Do you have adequate internal
control procedures to avoid errors in
charging the Federal government?
 Are you charging costs without
authorization?
 Are you maintaining properly
authorized timesheets for Biweekly
and Salaried?
Questions to ask (con’t)
 Are you reviewing status reports on a
regular basis?
 Are you removing encumbrances
within four – six months after the
project is completed?
 Are you documenting adequately for
cost transfers?
Questions to ask (con’t)
 Are you reimbursing subcontractors
and consultants with verifying if the
service is completed?
 Are you tracking the cost sharing
committed?
Questions to ask (con’t)
 Are you managing federally funded
equipment properly?
 What happens if we are not in
compliance?
Audits
 What types of Audits are there:
 Departmental Audits (Internal Audit)
 Compliance Audits (Internal Audit, State
Audits, Regents Audits, Sponsoring
Agency Audits, and Federal Audits)
 Annual OMB A-133 Audits
 Project Specific Programmatic and
Financial Audits (Office of Inspector
General, OIG)
Audits
 The purpose of an audit is to verify
that we are doing what we say we are
doing.
 The auditors are testing our controls
and detail transaction. They will
request financial supporting
documents such as time sheets,
invoices, purchase orders and
receipts.
Responsibilities
OSP –
 Review and approve proposal
packages and provide final approval
on CAS exceptions and justifications.
 Provide necessary assistance
 Provide CAS Exception approval when
appropriately justified by PI and
Department
Responsibilities
Principal Investigator
 Prepares the proposal and complies with
the requirements.
 If need for subcontracts he collects
authorized budget and work statements
from each subcontractor.
 Prepares the budget and justification in
accordance with allowable cost principles
and applies the appropriate F&A rate.
 If matching funds or in-kind contributions,
secures written approval from each
contributor.
Responsibilities
Principal Investigator (con’t)
 If any financial conflict of interest,
discloses existence.
 Routes completed information to
Office for Sponsored Programs (OSP)
 Pre-award spending or extensions of
time
 Scope of work and any modifications
and approval
Responsibilities
Principal Investigator (con’t)
 initiation of programmatic changes to the project
 initiation of hiring or assignment process and approval
of personnel assigned to the project
 assurance of integrity and safeguarding of notebooks
and scientific data
 compliance with timely submission of accurate interim
programmatic (technical) reports
 assurance of quality, timeliness, and programmatic
performance of subcontracts
 initiation of materials transfer agreement when
receiving biological materials from an outside source.
Responsibilities
Principal Investigator (con’t)
 Initiates expenditure of funds
 Initiates allocation of cost sharing
dollars if applicable
 Reviews invoices from and approves
payments to subcontractors
 Initiates request for rebudgeting
 Requests for cost transfers – if
greater than 90 days, must sign
Responsibilities
Principal Investigator (con’t)
 Reviews restricted account status reports
and resolves errors in timely manner
 When appropriated, request access to
residual balances
 Complies with requirements of the
personnel activity reports
 Prepares final programmatic narrative
report
Responsibilities
Department Administration and
Business Managers:
 Monthly reconciliation of project costs
 PAR forms
 Cost transfers
 Following UGA policy and procedures
Responsibilities
Contract & Grants:
 Monthly, Quarterly, Predetermined
and Final reports/billings
 Budget Amendment Reviews
 Establish Projects
 Establish Account Numbers
Responsibilities
Contract & Grants (con’t):
 Approve Cost Transfers
 Approve PAR’s
 Available to answer questions
www.busfin.uga.edu/disclosure
Summary
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DS2
CASB
OMB A-21
Training classes
Any Questions?
Contact Information
Carolyn Taylor
Accountant
Contracts & Grants Division
706-227-7209
[email protected]