Fiscal Management

Institutions and researchers must comply with externally imposed requirements related to the management of research funds. The objectives of good fiscal management are twofold:

• To make the best use of available funds to achieve research outcomes
• To avoid problems of fraud, waste, and abuse of sponsor support

Formal cost accounting standards as set forth by the federal government and institutional fiscal policy help set the appropriate fiscal protocols for researchers and the University.

Proper Classification of Costs

This is a key component of compliance with federal regulations. Non-compliance may result in financial penalties for NCSU and could affect our ability to qualify for federal funds.

OMB Circular A-21

Anyone authorizing the expenditure of federal funds must have a working understanding of the underlying cost principles as set forth in OMB Circular A-21 (A-21). These principles govern costs that may be charged either directly or indirectly to the government by educational insitutions.

Cost Accounting Standards Board (CASB)

The CASB, an independent legislatively-established board within the executive branch of the federal government, provides guidelines on cost accounting practices, referred to as Cost Accounting Standards (CAS). In 1994, CAS imposed four standards on universities receiving significant awards from federal agencies. In 1996, A-21 was revised to include the four CAS standards and made these standards applicable to all types of federal awards. CASB imposed these standards to:

• Prevent the charging of unallowable costs to federal awards
• Standardize university costing practices
• Standardize requirements for recipients of federal funds

NCSU compliance

NCSU must comply with the CAS requirements to ensure the recovery of direct and indirect (F&A) costs. As a required element of CAS, the University must disclose its cost accounting practices in writing to the federal government. NCSU satisfied this requirement with the disclosure statement (DS-2) submitted to the federal government in 1997.

DS-2

The DS-2 describes the cost accounting practices that NCSU follows. This document lays the groundwork for fiscal policy created to support daily financial operations.

The four cost accounting standards that pertain to NCSU:

• 501 - Consistency in Estimating, Accumulating and Reporting Costs by Educational Institutions

Fundamental Requirement - An educational institution's practices used in estimating costs in pricing a proposal shall be consistent with the educational institution's cost accounting practices used in accumulating and reporting costs.

• 502 - Consistency in Allocating Costs Incurred for the Same Purpose by Educational Institutions

Fundamental Requirement - All costs incurred for the same purpose, in like circumstances, are either direct costs only or F&A costs only with respect to final cost objectives.

• 505 - Accounting for Unallowable Costs

Fundamental Requirement - Costs expressly unallowable or mutually agreed to be unallowable shall be identified and excluded from any billing, claim, application, or proposal applicable to a Sponsored Agreement.

• 506 - Consistency in Using the Same Accounting Period for Purposes of Estimating, Accumulating and Reporting Costs

Fundamental Requirement - Educational institutions shall use their fiscal year as their cost accounting period.

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See Appendix A to Federal Circular A-21 for further clarification of the requirements of these standards.

See the Direct vs. F&A Costs section of this web site for more information on this area.

Questions related to the Cost Accounting Standards should be addressed with your College Business Office.

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Scroll down to view entire document or click on any of the topics below to jump directly to that section:

• CAS APPLICABILITY
• DEFINITION OF COSTS
• GENERAL CRITERIA FOR DETERMINING HOW COSTS ARE CHARGED TO SPONSORED PROJECTS
• RELIANCE ON AGENCY APPROVAL
• UNALLOWABLE COSTS

POLICIES

• ADMINISTRATIVE AND CLERICAL SALARIES/WAGES/FRINGE BENEFITS
• GENERAL OFFICE SUPPLIES
• POSTAGE EXPENSES
• TELEPHONE AND VARIOUS OTHER COMMUNICATION EXPENSES
• MEMBERSHIPS AND SUBSCRIPTIONS
• BOOKS
• PRINTING, BINDING, PUBLICATION AND COPYING
• EQUIPMENT
• SERVICE CENTERS
• LUMP SUM VACATION PAYOUTS
• COST SHARING
• FEDERAL FLOW-THROUGH
• FUNDING DELAYS
• NON-CAS COVERED PROJECTS
• SPONSORED AWARDS NOT SUBJECT TO CAS APPLICABILITY
• FIXED PRICE ACCOUNTS

 

ISSUES REQUIRING PROCEDURAL CLARIFICATIONS TO CAMPUS

COST ACCOUNTING STANDARDS

The following policies have been clarified due to the implementation of Cost Accounting Standards (CAS) by educational institutions. While many of these policies have been in place for some time, it is important to have comprehensive written policies and procedures which address CAS.

CAS APPLICABILITY

CAS will apply to sponsored awards that meet any one of the following criteria:

1. All federal awards (including federal fixed price awards)
2. All awards that contain any federal flow-through money. If you discover the project is being funded with federal flow-through money after the award period has started, any unallowable direct charges need to be removed from the account
3. The terms and conditions of the proposal or award documents reference OMB Circular A-21 or Cost Accounting Standards
4. Any sponsored project whose funds are being used as cost sharing on a CAS covered project. Only the individual cost(s) being used as cost sharing will be subject to the definitions of direct charges and “unlike circumstances”.
5. The sponsor is paying the University's full negotiated facilities and administrative (indirect) cost rate (unless the project meets the University's definition of a non-federal "Fixed Price" project).

Awards not covered under CAS administration are still subject to the requirements listed in the award as well as all University and State guidelines. Just because an award is not under CAS administration does not mean expenditures unrelated to the award can be charged. All expenditures on an award must be reasonable, allocable and allowable.

Awards not covered under CAS administration that are also not "Fixed Price" awards (see PRR website) include either audit clauses and/or financial reporting requirements. These clauses allow for the review of supporting documentation for all expenditures. The supporting documentation should validate the relationship between the expenditure and the purpose of the award.

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DEFINITION OF COSTS

The cost principles as defined in OMB Circular A-21 provide the basis for determining the procedures used to identify direct costs. Costs incurred to support a project are treated as direct costs and are charged to sponsored projects when the costs can be specifically identified to the project with relative ease and with a high degree of accuracy.

F&A costs are general institutional expenditures that are incurred for common or joint objectives benefiting instruction, research, or public service and therefore cannot be readily identified with a particular sponsored project. These costs are allocated to sponsored projects in accordance with OMB circulars through the application of the University's &A Cost Rate.

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GENERAL CRITERIA FOR DETERMINING HOW COSTS ARE CHARGED TO SPONSORED PROJECTS

The proper classification (direct vs. indirect) of any charge should be determined based on a logical thought process. This process can be described in four steps as follows:

1. Review - Regulations, Policies, Procedures applicable to the project. This would include internal or institutional regulations policies and procedures (for example, NC State's Disclosure Statement and the Administrative Policies and Procedures) as well as any external regulations, policies, or procedures (for example, A-21 and other relevant federal circulars, sponsor terms and conditions, and specific award terms and conditions).
2. Judgment - Based on the review of specific facts and circumstances, a judgment is made by the institution's appropriate personnel as to the proper allocation (direct vs. indirect).
3. Justification - Appropriate level of justification disclosed in the proposal narrative or "Narrative Budget Justification" page (or a justification is prepared when the need arises during the life of the project that could not have been anticipated in the proposal process).
4. Agency Approval - Of budget based on justification in the proposal and reliance on the fact that the institution made an informed decision based on the particular facts and circumstances.

There are some cost objectives that can be direct or F&A depending on the facts and circumstances of the individual project. The questions that should be asked to determine if it can be charged direct are:

1. Does the cost provide a direct benefit to the purpose or objective of the project as opposed to a cost that is "needed" to complete the project but is incidental to the purpose?

For example, 10 (ten) three ring binders in Project A are "needed" to organize lab notes. The purpose of the project is to measure the effect of MMX processing on DOS based software. For Project B, 10 (ten) 3 ring binders are needed to organize class materials for a workshop. One of the stated objectives in the project is to present a three month workshop to the top 10 Biology teachers in Wake County on ethics in genetic research.

The ten binders in Project A are needed to complete the project, but do not provide a direct benefit to the purpose or objective of the project. The value is incidental to the purpose of the project, therefore the cost would be classified as indirect. In Project B, the 10 binders provide a direct benefit to the purpose of the project as stated in the proposal. Therefore, the cost would be classified as direct and can be charged to the project in the supplies cost category.

2. Can the cost meet the definition of a direct cost? Can the cost be specifically identified with a project with relative ease and with a high degree of accuracy and allowed by all terms and conditions governing a particular award?
3. For clerical and administrative salaries, do the facts and circumstances meet the criteria to qualify as an exception described by OMB guidelines to the general rule that these costs are an F&A cost?

Cost Accounting Standards require consistent treatment of costs in "like circumstances". Consequently "unlike circumstances" must be demonstrated/justified if a cost will be budgeted, charged, and reported inconsistently. The following arguments cannot be used in and of themselves to demonstrate "unlike circumstances":

1. Sponsor approval of the allocation of a particular cost without proper review by the institution (i.e. steps 1-3 above).
2. Insufficient F&A cost money returned to support the projects
3. Sponsor limits or will not pay F&A costs
4. Sponsor is willing to pay for the cost as a direct charge

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RELIANCE ON AGENCY APPROVAL

Sponsor approval of a budget does not in and of itself constitute approval of the specific line items. The sponsor assumes you have complied with A-21, your Cost Accounting Disclosure Statement, your F&A cost proposal assumptions, and any other regulations cited. A cost that may be allowable at one institution as a direct charge may not be allowable at another because of the differences in the Disclosure Statement and the F&A cost proposal. There would be no way for any sponsor to make a determination of allowability because of these variables; therefore, it is the institution's responsibility to exercise this judgment.

Agency approval can only be relied upon if you have reviewed regulations, policies and procedures; made a judgment based on this review; and disclosed the appropriate justification. Please note that even if the agency approves the expenditure, auditors (Department of Health and Human Services (DHHS), sponsor, state, or internal) could come back at a later time and disallow the expenditure based on their review, judgment, or lack of appropriate documentation.

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UNALLOWABLE COSTS

Costs considered "unallowable" in accordance with various authoritative documents and the individual Sponsors must be identified and accounted for separately. These costs may not be budgeted, charged or reported to a sponsor.

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POLICIES

The following statements should serve as the basis for administering all future CAS covered sponsored projects. The lack of available F&A cost funds is an irrelevant factor in your decision making process.

1. All Proposals, whether solicited or unsolicited, which may result in CAS covered sponsored awards to the University must be reviewed by the appropriate college and university officials prior to being forwarded to a potential Sponsor (except for Memorandums of Agreement written for $15,000 or less that can be approved at the College level).
2. Proposal budgets should be developed utilizing specific items and cost categories which are consistent with the University's Financial Accounting System (FAS) unless the sponsor requires other presentation. For example, the following major cost categories should be used when determining a budget:

• Salaries/Wages
• Fringe Benefits
• Contracted Services
• Supplies and Materials
• Domestic Travel
• Foreign Travel
• Other Travel
• Current Services
• Fixed Charges
• Equipment
• Student Aid
• Subcontractor Costs
• Other Charges
• F&A Costs

It is the responsibility of the college to review these budgets and determine all costs are allowable and allocated correctly between direct and F&A cost categories.

3. There are some costs within the major cost categories (as outlined above) that require additional documentation. A narrative budget justification must be prepared if any of the following costs are budgeted within the major cost categories:
   1. Administrative and clerical salaries (Salaries/Wages)
   2. General office supplies (Supplies and Materials)
   3. Postage (Current Services)
   4. Telephone (Current Services)
   5. Individual memberships and subscriptions (Fixed Charges)

If the need to incur expenses in these categories occurs during the project (i.e. they were not included in the proposed budget) a narrative budget justification must be prepared before the expenses can be re-budgeted or charged as a direct charge.

The justification must explain the purpose of the costs in sufficient detail to enable those responsible for reviewing the proposed budget to make a determination of whether the cost meets the definition of an "unlike circumstance". This justification may be included in the narrative of the proposal, as an attachment to the proposal, or separate from the proposal. However, if the justification is not included as part of the proposal it must be prepared and included with the proposal as it is routed through the review process.

If costs are budgeted in the category of "Current Services" the assumption is made that none of these costs are for postage or telephone charges unless a narrative budget justification is provided to support those costs.

If costs are budgeted in the category of "Supplies and Materials" the assumption is made that none of these costs are for general office supplies unless a narrative budget justification is provided to support these costs.

4. Costs incurred for the same purpose (i.e., specific cost items) in like circumstances must be budgeted and expended consistently. In other words, when similar circumstances exist throughout separate projects, each specific cost item is to be budgeted/expended as either a direct or an F&A cost consistently in each case.

Listed below are additional policy clarifications for several specific cost issues. These policies are to serve as the basis for budgeting and administering all types of future sponsored awards.

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ADMINISTRATIVE AND CLERICAL SALARIES/WAGES/FRINGE BENEFITS

These costs are normally treated as F&A costs and are covered by the negotiated F&A cost rate.

There may be exceptions when the Office of Management and Budget (OMB) permits the direct charging of these costs. Direct budgeting and charging of such costs may be considered where a major project or activity explicitly budgets for administrative or clerical salaries and the individuals

The nature of the work or actual functions performed under a particular project should require an extensive amount of administrative or clerical support which is significantly greater than and in addition to the routine level of such services provided by academic departments.

The following are specific examples of when direct charging of administrative and clerical salaries/wages and fringe benefits might be allowable (with adequate justification in the proposal narrative and upon approval by the sponsor):

• Large complex programs such as centers or other projects that entail assembling and managing teams of PI's from a number of institutions.
• Specific research activities involving extensive data collection, statistical analysis and entry, database management, surveying, tabulation, cataloging and researching literature.
• Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
• Projects whose principal focus is the preparation and production of manuals and large reports or books. (This does not include routine progress and technical reports).
• Projects that are geographically inaccessible to normal departmental administrative services such as seagoing research vessels and other research field sites that are remote from the campus.

All of these circumstances display, with relative ease and a high degree of accuracy, extensive amounts of administrative/clerical effort on a particular project (or in the case of a remote location, inaccessibility to normal departmental services). This effort is considered greater than the routine level of service normally provided by the college or department. However, these examples are not an exhaustive list nor do they imply that direct charging of administrative or clerical salaries would always be appropriate for the situations illustrated in the examples. Projects cannot be grouped together to meet the requirement that there be an extensive amount of support. If the cost does meet the test of extensive amounts of administrative and clerical effort but cannot meet the direct charge criteria stated above the cost must be charged indirect.

The College should provide adequate justification in the proposal narrative for the direct charging of costs in this category, showing that the clerical and administrative salaries met the criteria for unlike circumstances.

Routine account monitoring, proposal processing, typing of general correspondence, manuscripts or technical reports, ordering of supplies and meeting or travel arrangements are not included in the definition for direct charging of administrative and clerical salaries and is covered by the University's F&A cost rate.

Inadequate funds to support these charges as F&A is not adequate justification for charging this support as a direct charge.

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GENERAL OFFICE SUPPLIES

Costs include those incurred in support of routine administrative activities associated with instruction, public service, research and other institutional activities, (i.e., paper, pencils, pens, ink, toner cartridges, etc.). These items of cost are considered readily expendable and are treated as facilities and administrative costs covered by the negotiated F&A cost rate. The only exceptions are those wherein the purchase of the supplies is extensive in nature, can be specifically identified to the project, and meets the definition of a direct charge. The College should provide adequate written justification in the proposal narrative for the direct charging of costs in this category, explaining that the supplies were a direct benefit to the purpose of the project and can be specifically identified with the project. In addition, support documentation must be adequately detailed to pass an audit.

• Computers and Peripherals: The original purchase can either be charged as technical (direct) or general purpose (F&A) depending upon the ACTUAL usage of the items OR more likely, a combination of both (direct and F&A allocation).
• Replacement Parts: Are to be charged/allocated based on their current ACTUAL usage/benefit to various awards/accounts.
• Upgrades and Additions: Are to be charged based on the proportional benefits received to various awards/accounts.

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POSTAGE EXPENSES

Postage expense incurred in support of routine administrative communication activities associated with instruction, public service, research, and other institutional activities should not be charged directly to sponsored accounts. The only exceptions are those cases where extensive postage expense is required in support of the goals and objectives of the sponsored award being charged. For example, if the purpose of your project were to survey 10,000 high school students to determine their attitudes on violence in the school system, the postage for the survey would be an allowable direct charge.

The written justification should demonstrate that the postage provided a direct benefit to the purpose of the project, is extensive, and can be specifically identified with the project. In addition, support documentation must be adequately detailed to pass an audit.

Mailing technical reports and other project deliverables are considered part of normal, routine business expenses and are therefore considered F&A costs. Postage expenses include US Mail, Federal Express, UPS,etc. The difference between postage (F&A) and freight (direct) is driven by the item(s) being sent, not the means by which it is sent.

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TELEPHONE AND VARIOUS OTHER COMMUNICATION EXPENSES

Communication expenses incurred in support of routine administrative activities associated with instruction, public service, research and other institutional activities should not be charged directly against sponsored projects. The only exceptions are those relating to equipment charges (dedicated research/lab lines), long distance calls, telegrams, fax long distance charges, and various other communication expenses specific to a project and incurred for the sole direct benefit of the project. Support documentation must be adequately detailed to pass an audit. Installation charges, monthly use charges, local access calls, pagers, etc. are considered F&A costs and should not be charged directly to sponsored accounts.

Cellular Phones - Per NCSU policy, individuals who require cellular telephone service to conduct University business must obtain approval from the dean or department head of their unit. Orders for cellular services and equipment must be placed through the Telecommunications Services Division, Office of Information Technology Services(ITS). Services and equipment must be requested on the Cellular Phone Service Request Authorization form.

The services paid for by the University are to be used in the conduct of University business. These phones and their charges would require an unlike circumstance in order to be charged to a sponsored award.

Use of Personal Cellular Service for Business - Reimbursement of the employee for cellular telephone usage for business calls will be handled the same as making business calls away from the office. The employee may request reimbursement monthly. A copy of the cellular bill denoting business related calls must be submitted for reimbursement, with personal calls blacked out for privacy. No reimbursement will be made for the instrument, monthly fees, or the portion of "free" minutes. The employee should also provide information on how the call relates to the purpose of the project.

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MEMBERSHIPS AND SUBSCRIPTIONS

Institutional memberships in professional organizations and subscriptions to technical periodicals are normally treated as an F&A cost. They may be charged directly only when related to a specific project and necessary for the successful completion of the goals and objectives of the project. Allocation, when applicable, should be able to be accomplished with relative ease and a high degree of accuracy.

Generally, individual memberships are unallowable. Individual memberships in civic or social organizations are expressly unallowable. An individual membership or subscription to a professional group or periodical may be allowed as a direct charge to a contract or grant only if the following can be demonstrated:

1. An institutional membership is not available or will not meet the needs of the project.
2. The cost has been justified (i.e., provides a direct benefit to the purpose of the project) in the proposal or a justification is in the College file if the need arises after the project was awarded.

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BOOKS

The classification of this cost is broken down into two categories - the types of books normally found in a University library versus those that are not. The cost of the types of books found in a University library is normally a Facilities & Administrative (F&A) cost. The cost of the types of books not normally found in a University library, such as textbooks, is normally a direct charge to a sponsored project. Due to the nature of this cost, specific documentation must be present for the cost to be allowable as a direct charge on a specific sponsored award. The documentation requirements are discussed below.

BOOKS NORMALLY FOUND IN A UNIVERSITY LIBRARY

Since this cost is normally an F&A cost, an unlike circumstance must be justified in order to charge the cost as a direct cost. Factors that must be considered are:

1. The book(s) are deemed inaccessible from the NCSU library due to heavy use or the inability to place a reserve on the book. These situations must be documented.
2. The cost must be allocable to the project(s) with relative ease and high degree of accuracy. Books that will be used to gain an understanding of general knowledge in a field of work would not meet the relative ease/high degree of accuracy test.
3. There is specific information contained in the book(s) purchased that is directly related to a specific goal or outcome of the project. For example, a specific testing protocol that must be followed to validate research results.
4. Support documentation must be adequately detailed to pass an audit.

BOOKS NOT NORMALLY FOUND IN A UNIVERSITY LIBRARY

The cost of this type of book is normally a direct cost. The cost will be allowable as a direct charge if the cost for each book has been adequately justified in the proposal or a justification is in the College file if the need arises after the project was awarded. The important distinction between this type of book and the type of book described above is that the cost does not have to be extensive in nature since no unlike circumstance is required. However, due to the nature of this particular cost it is harder than usual to meet the justification and documentation requirements.

The following factors should be considered when preparing the justification:

The book must be allocable to the sponsored project(s) with relative ease and high degree of accuracy. Books that will be used to gain an understanding of general knowledge in a field of work would not meet the relative ease/high degree of accuracy test. It is often difficult to find a direct correlation/benefit to most sponsored projects with the purchase of general books. The justification must be sufficient to demonstrate compliance with the relative ease/high degree of accuracy test. Examples of supporting statements that are not sufficient to meet this test and would therefore be unacceptable in an audit are "The titles of the various textbooks clearly establish a technical relationship to the project charged" and "The books were needed for the research".

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PRINTING, BINDING, PUBLICATION AND COPYING

These costs are normally direct charges to a contract and grant account as long as you can meet the definition of a direct charge. One important criteria to this definition is that you must be able to specifically identify the charge to a particular project with relative ease and high degree of accuracy and that cost must provide a direct benefit to that project sometime during the life of the award. Charges included in these categories are those normally charged to object code 3400 and any copying costs charged as directed by the definition of object code 2600.

The costs of disseminating research results (i.e. publication costs or page charges) are allowed as a direct charge to the project from which the research was obtained. As with any other direct charge, the cost must meet general A-21 guidelines in that it must be reasonable, necessary, allowable, allocable, timely, non personal and must provide a direct benefit to the project.

With respect to copying costs, if you are using an outside copy service, the invoice should be retained as documentation to support the charge. If you are using a departmental copier, charges must be a per copy charge and must be based on a cost study. In other words, you cannot charge the associated expenses of the copy machine such as toner cartridge, paper, etc. directly to a contract or grant due to allocation problems among the many uses of the machine. The per copy cost must be based on total utilization of all activities (research, instruction, public service and other), not just research usage. In addition you must maintain documentation of the use through a log. Copying of proposals or general correspondence not related to a specific project cannot be charged direct since these costs cannot meet the definition of a direct charge.

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EQUIPMENT

NCSU has defined equipment (versus supplies) for contract and grant accounts with a project begin date of July 1, 1998 or later in the following manner:

Equipment - nonexpendable, tangible, personal property having a useful life of one year or greater and an acquisition cost of $5,000 or greater.

Supplies - expendable property having a useful life of less than one year or an acquisition cost of less than $5,000.

Equipment fabrication - occurs when multiple items which could be classified as supplies (some having acquisition costs of $5,000 or <) are purchased to create/fabricate an integrated unit of equipment having a total value of $5,000 or more. In these instances, the individual purchases should be accounted for as equipment.

For contract and grant accounts with project begin dates prior to July 1, 1998, a unit cost of $500 or more and an expected useful life of one year or greater is the equipment threshold throughout the life of the project.

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SERVICE CENTERS

Costs identified to a particular sponsored project for the use of University-owned labs and other service centers should be budgeted, charged, and reported as direct costs. These charges must be based on actual utilization supported by adequate documentation. These charges must also be based on a usage rate approved by the Office of Contracts and Grants. The rate must be approved before the charge is incurred by the sponsored projects.

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LUMP SUM VACATION PAYOUTS

Terminal leave and severance pay, for contract and grant accounts only, are charged at separation to a reserve account. Funding for the reserve account will come from a component of the contract and grant university benefits charge. For details relating to the actual procedure, please refer to the 12/15/98 memo from Terree Yardley and Karin Wolfe to University Division Level Personnel Contacts.

This procedure allows for the direct charging of the expenditure during the life of the project as a percentage of salary paid under the grant.

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COST SHARING

A cost used to meet the cost sharing commitments of a Sponsored Project will be allowed only to the extent the charge would meet the criteria as a direct charge. In addition to the specific criteria discussed above the charge must be allowable under the particular facts and circumstances of the award. If the cost would be classified as an F&A charge, it will not be allowed to meet the cost sharing commitments of that particular project.

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FEDERAL FLOW-THROUGH

If Federal flow-through dollars are not discovered by the college during the budgeting process and subsequent to the award it is noted that flow-through is a basis for any amount of funding, any unallowable costs (in accordance with CAS) which has been charged against the award would have to be removed.

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FUNDING DELAYS

Direct or F&A costs should only be charged to a particular project if they relate to the project. Delays in receipt of future funding is not justification for charging costs to an unrelated project. If charges are necessary before the receipt of the funding, a request for a pre-award account should be made through established procedures.

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NON-CAS COVERED PROJECTS

There has been considerable concern in regards to charging administrative/clerical salaries, postage and office supplies to non-federal contracts and grants. These costs will be considered allowable as direct charges on non-CAS affected contract and grant accounts.

Please keep in mind that ALL charges to any contract or grant should be necessary, reasonable, allocable and allowable under the terms and conditions of the agreement.

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SPONSORED AWARDS NOT SUBJECT TO CAS APPLICABILITY

Alternative costing policies have been implemented for sponsored awards not subject to CAS. Cost accounting policies followed for sponsored awards not subjected to CAS will be dependent upon the individual terms and conditions of the awards and may include additional state or sponsor guidelines and regulations.

Alternative costing policies could impact the classification of certain cost categories. Expenditures that are not allowed as direct charges on sponsored awards subject to CAS, may be considered allowable as direct charges on those awards not subject to CAS as based on the defined criteria reference above.

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FIXED PRICE ACCOUNTS

Information related to fixed price projects can be found at the following web sites:

• Administration of Fixed Price Projects
• Procedures for Closing a Fixed Price Project

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