University of California, San Diego


August 10, 2001


SUBJECT:  Cost Accounting Standards

As a recipient of federal awards, UCSD is required to comply with various federal regulations in the administration of its sponsored projects. Significant changes in these regulations resulted in the formation of a campus workgroup. Comprised of representatives from Vice Chancellors' offices, the Controller's Office, and other administrative offices working with consultants from PriceWaterhouseCoopers, this workgroup has completed work on updating campus policy and procedures related to these standards.

A number of policy changes were necessary for UCSD to be responsive to the change in regulations. One element of new policy, which may vary from some past practice, is that inclusion of administrative or clerical costs in an award budget DOES NOT necessarily mean those costs are acceptable under federal regulations. For more details on this and other policy changes, please review the following PPMs on line:

PPM 150-40 - Cost Accounting Standards Compliance (NEW)
PPM 150-42 - Classification of Costs as Direct or Facilities and Administrative (Indirect) (NEW)
PPM 150-43 - Accounting for Unallowable Costs (NEW)
PPM 150-45 - Cost Sharing on Sponsored Projects (Issued in 1999)

It is important for all individuals having contract and grant management and administrative responsibility to be familiar with these policies. In addition to the policies on the web noted above, the following information resources are now, or soon will be, available to you to support the transition of your accounting practices:

1. A brief summary of PPM 150-40, 150-42, and 150-43 Significant Points is available at:
(http://www-bfs.ucsd.edu/gen/cas/cassigpts.htm), as is an abbreviated Quick Summary at:
2. Additional summary information is under development on the UCSD Blink web site (http://blink.ucsd.edu/go/cas).
3. CAS Training sessions will be offered beginning mid-September (watch for future announcements).
4. In anticipation of an approaching federal audit, CAS Audit orientation sessions will be offered later this fall (watch for future announcements).
5. Other forums such as ABA, SOM, and SIO business officer meetings will include policy discussion.
6. If you have any questions or require clarification of policy, contact the CAS Compliance Officer for UCSD, Dan M. Gilbreath, Director of the Office of Post Award Financial Services, at extension 41110 or dgilbreath@ucsd.edu.

Please avail yourself of these resources. Thank you for your diligence as we work together to ensure that UCSD's accounting practices meet sponsor expectations.

                                                Don Larson