University of California, San Diego

September 5, 1996
SUBJECT: Federal Cost Accounting Standards (CAS) Implementation
The Federal Government has imposed four Cost Accounting Standards (CAS) on universities. THIS WILL HAVE A MAJOR IMPACT ON OUR COST REIMBURSEMENT PRACTICES. Briefly, these Standards require that:
1. Practices used in estimating costs for Federal contract and grant proposals are consistent with cost accounting practices used in accumulating and reporting costs on awards,
2. All costs incurred on Federal contracts and grants for the same purpose, in like circumstances, are direct costs only or indirect costs only,
3. Unallowable costs shall be excluded from any Federal billing, claim, application, or proposal, and 4. The same cost accounting period shall be used for Federal sponsored agreement cost estimating, accumulating, and reporting.
These standards apply for all Federal awards, and apply to all universities which have an annual Federal volume of $25 million or more. Because of its large Federal volume, UCSD is required to comply with these standards, and was required to submit a cost accounting disclosure statement (DS-2) to the Federal Government by June 30, 1996. In order to comply with these CAS requirements, UCSD retained Coopers and Lybrand, an accounting firm with experience and expertise on cost accounting standards. In addition, two campus workgroups were established: the CAS Implementation Team, composed of staff representatives from each of the academic areas, certain administrative areas, and the members of the campus Recharge Review Committee; and the Steering Committee, composed of three vice chancellors and four faculty. As a result of their efforts, the campus DS-2 has been completed, reviewed by the Office of the President, and submitted to the Federal Government. The campus DS-2 has been installed on the Business and Financial Services Website; the URL is: http://www-bfs.ucsd.edu/emf/cas/casbds2\dsindex.htm. However, the CAS compliance process is not finished. The campus now needs to develop and clarify policies and procedures, and to provide orientation and training for all affected personnel. In order to accomplish this and to enable input from the campus on these developments, the CAS Implementation Team and Steering Committee are being reactivated. We will continue to seek input on CAS compliance and policy/procedure revisions from all affected campus personnel, through their representatives on the CAS Implementation Team, the CAS Steering Committee, and through three campus CAS Orientation Forums, scheduled as follows: October 1, 1996 noon-2 pm SIO Sumner Auditorium October 1, 1996 4-6 pm SOM Garren Auditorium October 9, 1996 10 am-noon Price Center Ballroom A
A more detailed recapitulation of this information has been sent to all campus MSO's/DBO's. The more detailed version includes a listing of the members of the CAS workgroups. This document is also available on the CAS Website listed above.
It is clear that the Federal imposition of Cost Accounting Standards on universities is resulting in major changes for us, and will require a large amount of effort to ensure compliance. We hope that all at UCSD will take the time to learn and understand the changes, and will cooperate to ensure that costing practices at UCSD comply with the CAS requirements. Please feel free to contact Bill Brophy, CAS Project Director, at x46517, or by email at bbrophy@ucsd.edu if you have any questions or comments on these efforts, or if you need guidance on costing practices pending policy development/revision and campus orientation.
David D. Sworder Steven W. Relyea John A. Woods Acting Vice Chancellor Vice Chancellor Vice Chancellor
for Research Business Affairs Resource Management
and Planning