The Basics of Cost Allowability Training 2011 - National Optical

100 Pages·2011·10.5 MB·English

by  Karen Wilson

Presented by
Karen M. Wilson, CRA CCEP
Chief Compliance Officer
NOAO
The information presented in these slides including any opinions, findings, and conclusions or
recommendations are the expressed views and opinions of Karen Wilson as the NOAO Chief Compliance
Officer and as a compliance representative of the Association of Universities for Research in Astronomy
(AURA) and do not necessarily reflect the views of the National Science Foundation (NSF).
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Why?
 
Allowable, Unallowable, Reasonable and
 
Necessary Costs
History
 
Difference between award types – grants,
 
contracts and cooperative agreements and some
general terminology
2 CFR Part 230 (OMB A-122)
 
Allowable Costs and specifics for Indirect Cost
 
Rate Determination (will include some short
discussion but not work through a submission)
True False Questions
 
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As PIs, Directors, Managers, Procurement
 
Officers and Supervisors
◦  Authorize Expenditures/Commit AURA
◦  Approve Time and Effort Reporting
◦  Set Policy and Procedures
◦  Involved with Audit and or Risk
◦  Delegate Responsibility
◦  Budget Allocation
◦  Fraud
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RESOURCE
  Code of Federal Regulations (CFR)
  Office of Management and Budget (OMB)
  National Science Foundation (NSF)
  Federal Acquisition Regulations (FARs)
  Cooperative Agreement (CA)
  Cooperative Support Agreements (CSA)
  Cooperative Agreement Financial & Administrative Terms and
Conditions (CA-FATCs)
  Federally Funded Research and Development Centers (FFRDCs)
  Indirect Cost Rates (IDC)
  Facilities and Administration Rates (F&A)
  General and Administrative Rates (G&A)
  Modified Total Direct Cost Rate (MTDC)
  Society of Research Administrators (SRA)
  Research Administrators (RA)
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RESOURCE
  Address the legitimacy of the cost charged against a specific award
  Based on specific guidelines of the sponsor and according to the cost
principles and established policies and practice
◦  2 CFR Part 230 (OMB A122)
◦  NSF Administrative and Award Guide
◦  NSF CA-FATC
◦  Program Specific
◦  Cooperative Agreement or Award Document
◦  Aura Policies and Procedures
  How you procure items and services
◦  2 CFR Part 215 (OMB A110)
◦  AURA Procurement Policies
  How costs are audited
◦  OMB A133 Guide to Singular Audits
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Time and Effort
 
Risk Assessment
 
Internal Controls and Approvals
 
Access to Information Systems
 
ARRA Compliance
 
Conflict of Interest
 
Reasonable and Necessary
 
Sub-recipient monitoring
 
sub-award files and other large procurements
documented for compliance
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Costs must be reasonable
 
Costs must be given consistent treatment
 
through applications of generally accepted cost
principles appropriate to the circumstance (in
other words – classified the same throughout
the financial system)
Cost must conform to limitations or exclusions
 
set forth in the sponsored agreement or the
Federal Cost principals A-122
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Costs must withstand public scrutiny
 
?
What would a reasonable person pay
 
◦  Procurement validity – Price Analysis
◦  Conform to the budget or Program Plan?
◦  Customary
Necessary to perform the research or project
 
◦  “Not just that we have always allowed it”
◦  Transparency is important
◦  Public Documentation – Websites
◦  Stewardship of Public Funds
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First it must be allowable.
 
◦  Allowable under the cost principles of 2 CFR Part 230
(OMB A-122) and under the terms of the specific award;
Evaluated against the criteria –
 
Incurred solely to support or advance the work of
 
a specific award.
◦  Allocable in that the cost can be associated with a high
degree of accuracy to the sponsored project
;
◦  Must be a means for assessing the cost to one or more
cost objectives in a reasonable and realistic proportion to
the benefit provided.
  Direct or Indirect Cost
  Written documentation for treatment of cost – financial systems
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How are Allowable Costs
RESOURCE
Determined?
Allowable:
Under
the
agreement,
regulations
and
public
laws

Reasonable:
A
prudent
person
would
have
purchased
this
item
and
paid
this
price.



Recognized
as
ordinary
and
necessary
Reasonable
in
nature
and
amount



Competition
policy
(3
quotes
etc.)

Allocable:

They
can
be
assigned
to
the
activity
on
some
reasonable
basis

Consistently
Treated:

Like
costs
must
be
treated
the
same
in
like
circumstances,


as
either
direct
or
F&A
costs

Be
consistent
with
policies
and
procedures:
applied
uniformly
to
both
federally‐Iinanced


and
other
activities
of
the
organization


Conform:
to
any
limitations
or
exclusions
set
forth
in
the
cost
principles
or
the
award

Necessary
:
to
the
overall
operation
of
the
organization
and
or
award

Documented!!!!


If
a
cost
cannot
meet
the
above
criteria,
it
is
NOT
ALLOWABLE,
no
matter
what
it
is
for.

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