cost policy training sponsored project training program april 30, 2012 beverly blakeney &...

Cost Policy Training

Sponsored Project Training ProgramApril 30, 2012

Beverly Blakeney & Jennifer Gagnon

April 30, 2012 Sponsored Project Training Program 1

Learning ObjectivesParticipants will review key concepts

from March cost policy trainingParticipants will learn important

processes to enable the direct charging of normally indirect costs (F&A)

Participants will learn key implementation tools

Participants will become aware of available resources

Participants will review important implementation dates

Sponsored Project Training ProgramApril 30, 2012 2

What is the cost policy?It provides guidance, using Four Cost

Principles, for directly charging costs.It clarifies what are normally direct costs

and indirect costs (F&A). It defines what is meant by “unlike

circumstances.”It sets out criteria for reasonable

methods for allocating direct costs across more than one project.

It describes a clear process and circumstances for charging indirect costs as a direct cost.


What is an unlike circumstance?Activity or use of a cost item which is

substantially greater in amount or different in purpose than the normal use


Unlike Circumstances CriteriaThe sponsored agreement has an

extraordinary need for the item or service that is beyond the level of services normally provided by departmental administration.

The cost can be specifically identified to the work conducted under the sponsored agreement and is appropriately documented.

The cost is allowable within the context of the University’s cost accounting standards.


What is an allocation method?If a cost benefits two or more

projects/activities in proportions that can be determined without undue effort or cost, the cost should be charged to the projects/activities based on the proportional benefit.

If proportions cannot be determined due to the interrelationship of the work, then costs may be charged on any reasonable basis.


Allocation Methods

Examples of acceptable methods:Usage based – the cost of lab

supplies is allocated to each sponsored agreement based on quantity used

Time based – the cost of scientific equipment is allocated to each sponsored agreement based on number of hours used for each


Allocation Methods

Examples of unacceptable methods:“Spending down”Rotating charges without

establishing relative benefit

See http://www.uvm.edu/~

cntrllrs/cas/Allocation_Examples.pdf for additional examples


http://www.uvm.edu/~cntrllrs/cas/Allocation_Examples.pdf

http://www.uvm.edu/~cntrllrs/cas/Allocation_Examples.pdf

What’s up nextExpense categoriesDecision pointsKey questionsJustification formProcessPeopleSoft changesResources


Expense categories requiring justificationAdministrative & clerical salariesGeneral supplies & servicesComputer supplies & servicesUtilitiesMemberships & subscriptionsEquipment maintenanceWork OrdersTelephone and

telecommunications servicesSponsored Project Training ProgramApril 30, 2012 10

Decision PointsDoes PI wish to direct charge

items that are typically considered indirect?

Is proposal to federal sponsor or for a federal subaward?

Does proposal have an Extension or Experiment Station purpose?


Key Questions1. Because all projects require a certain amount of

account reconciliation, correspondence, phone calling, office supplies, etc., how will the proposed charge(s) differ from the standard level of support expected for all projects?

2. How will the nature of the work differ from departmental administrative work conducted for all projects, and why are the charges necessary to conduct the work of the award?

3. The cost category (e.g., office supplies) may imply that the items are being used for administrative purposes. How will these items be used to conduct the specific work of the project, and what is their relevance to the methods used in conducting the project?


Key Questions4. How will the proposed charges be

accurately documented and assigned to the project with a high degree of accuracy? For example, an administrator who is working on five or more projects including normal department administration work will be difficult to document accurately the relative benefit to any specific project.

5. How does the charge meet a specific need of the project and what is the derived benefit?


Justification FormClearly identifies the “unlike

circumstances”Part of routing form & on SPA websiteRequired for any federal or federal

subaward in order to direct charge an expense that is typically considered an indirect charge◦Excluding Experiment Station, Extension,

and Federal Formula Fund proposals


Proposal ProcessPilot in May 2012Effective June 1, 2012


Is this extension

or experiment station

PI must complete justification form and include as many details as possible about the costs in budget justification.

Yes or Unknown

Yes

No

What should a PI do if they want to direct charge items that are typically indirect at the time of proposal submission?

No form necessary but budgeted expenses must follow sponsor and university rules.

SPA will review justification form and budget justification for completeness, accuracy, and appropriateness.

Approved?

Proceed with proposal submission

Remove references to direct charging of indirect costs from budget narrative prior to proposal submission

Is it a federal funding source?

YesNo form necessary but budgeted expenses must follow sponsor and university rules.

No


After Award AcceptanceEffective June 1 for award

processEffective July 1 for expenses


What should a PI do if he/she wants to direct charge items that are typically indirect when an award is processed (for proposals submitted prior to May 1)?

Is this extension


PI must complete justification form.

Yes

Yes

No


SPA will review justification form for completeness, accuracy, and appropriateness.

Approved?

SPA will enter approved admin salaries in PS project team page & create appropriate F levels after July 1 so charging of the requested items can occur.

Direct charging of requested items is not allowed.


Yes



What should a PI do if they want to direct charge items that are typically indirect after award acceptance?

Is this extension


PI must complete justification form.

Yes

Yes

No


SPA will review justification form for completeness, accuracy, and appropriateness.

Approved?

SPA will enter approved admin salaries in PS project team page & create appropriate F levels so charging of the requested items can occur.

Direct charging of requested items is not allowed.


Yes



Process for non-federal awardsCost principles applySponsor guidelines and university

policy must be followedJustification form is not required

to direct charge costs that are typically considered indirect


Other Implementation Tool: PeopleSoftProject team page, DA DC role

◦Grants > Awards > Project


PeopleSoft◦New budget accounts (F level),

effective 7/1/2012 General supplies & services Agricultural supplies & services Lab & research supplies Utilities Memberships & subscriptions Work orders Telephones & telecommunications services

◦Expense account changes, effective 7/1/2012


PeopleSoftThe following expense types are typically charged as an indirect cost to sponsored projects but in unlike circumstances, may be direct charged. These expense categories correspond with F level budget accounts and will be set up on an as-needed, award-specific basis for federal and federal flow through awards after all steps of the cost policy justification process taken place: General supplies & services Computer supplies & services Utilities Memberships & subscriptions Equipment maintenance Work Orders Telephone and telecommunications services


Key DatesMay 1

◦Pilot for proposalsJune 1

◦Proposals will start using new form to justify budgeting normally classified indirect costs as direct costs

July 1◦ Policy goes into effect◦ Key date for expenses◦ PeopleSoft account changes


Reference materials & resourcesAvailable now!

◦Cost Accounting Services web site: http://www.uvm.edu/~cntrllrs/cas/ Direct cost allocation examples Additional details about direct vs. F&A

costs and unlike circumstances Cost policy FAQs

◦Justification form◦Invite SPA & CAS to faculty meetings

to help spread the word


http://www.uvm.edu/~cntrllrs/cas/



Reference materials & resourcesComing soon

◦Matrix of PeopleSoft budget & account changes

◦Closeout report changes – project team page information

◦List of administrative/clerical job titles

◦Memo to faculty members


Questions?


Learning ObjectivesParticipants will review key concepts

from March cost policy trainingParticipants will learn important

processes to enable the direct charging of normally indirect costs (F&A)

Participants will learn key implementation tools

Participants will become aware of available resources

Participants will review important implementation dates


cost policy training sponsored project training program april 30, 2012 beverly blakeney &...

Documents

cost item

cost benefits

cost principles

cost of lab supplies

cost of scientific equipment

direct charging

indirect costs faparticipants

unlike circumstances