Disclosure Statement Training: Departmental Administrators

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Disclosure Statement Training Departmental
Administrators Business Managers

• Basic Understanding of A-21, CASB, and DS2

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Disclosure Statement Training Departmental
Administrators Business Managers

• Presentor
• Carolyn B. Taylor, Contracts and Grants
  Division(cbtaylor_at_uga.edu)
• 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

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Training Offered

• Beginning in March 2006
• Basic Understanding of A-21, CASB, and DS2
• Cost Transfers, Program Income, Cost Share
• Direct and FA Costs
• Time and Effort Reporting
• Service Centers
• Account Maintenance Close-out

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You are Here

• Beginning in March 2006
• Basic Understanding of A-21, CASB, and DS2
• Why are you here?

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What you should gain?

• A better communication between CG and
  departmental administrators/business managers
  concerning the new policies.
• A better understanding of how A-21 and CASB
  effects what we do.

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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.

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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 UGAs policy and
  procedures regarding cost accounting practices.
  

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What is DS2(Disclosure Stmt 2)?

• 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

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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

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What does it do?

• New Policies
• Cost Transfer
• Program Income
• Service Center
• Existing Policies Revised
• Cost Share
• Direct Cost
• Personnel Activity Report

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What brought about the DS2?

• A-21, A Federal Policy Document issued by OMB
  (Office of Management and Budget) which all
  Universities nation-wide must follow.
• I thought it was just UGA?

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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)

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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.

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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.

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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 FA cost rate identification
  and calculation.
• http//www.whitehouse.gov/omb/circulars/index.html
  

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Who cares?

• Will I Ever Use this in my job?
• Each of us are fiscal agents of the University
• It is everyones responsibility to be
  knowledgeable of University Policies and
  Procedures
• Ignorance of the policies and procedures is not
  an excuse for not following them.

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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

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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

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Specific Rules on Cost Allowability

• 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.

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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 (FA)? 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?

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Questions to ask (cont)

• 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?

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Questions to ask (cont)

• 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?

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Questions to ask (cont)

• Are you reimbursing subcontractors and
  consultants with verifying if the service is
  completed?
• Are you tracking the cost sharing committed?

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Questions to ask (cont)

• Are you managing federally funded equipment
  properly?
• What happens if we are not in compliance?

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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)

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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.

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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

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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 FA rate.
• If matching funds or in-kind contributions,
  secures written approval from each contributor.

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Responsibilities

• Principal Investigator (cont)
• 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

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Responsibilities

• Principal Investigator (cont)
• 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.

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Responsibilities

• Principal Investigator (cont)
• 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

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Responsibilities

• Principal Investigator (cont)
• 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

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Responsibilities

• Department Administration and Business Managers
• Monthly reconciliation of project costs
• PAR forms
• Cost transfers
• Following UGA policy and procedures

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Responsibilities

• Contract Grants
• Monthly, Quarterly, Predetermined and Final
  reports/billings
• Budget Amendment Reviews
• Establish Projects
• Establish Account Numbers

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Responsibilities

• Contract Grants (cont)
• Approve Cost Transfers
• Approve PARs
• Available to answer questions

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www.busfin.uga.edu/disclosure
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Summary

• DS2
• CASB
• OMB A-21
• Training classes

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Any Questions?
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Contact Information

• Carolyn Taylor
• Accountant
• Contracts Grants Division
• 706-227-7209
• cbtaylor_at_uga.edu