OFFICES OF THE VICE CHANCELLORS
- RESEARCH
- BUSINESS AFFAIRS
- RESOURCE MANAGEMENT & PLANNING
August 29, 1996
KEY ADMINISTRATIVE CONTACTS
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 identified and 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.
While the initial imposition applied only to Federal contract awards, the University Costing Principles (A-21) were revised in May, 1996, to impose the same requirements for all Federal awards (grants, cooperative agreements, etc.). These standards 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 complete and submit a cost accounting disclosure statement (DS-2) to the Federal Government by June 30, 1996, in order to continue receiving Federal awards. The same deadline applied to the Berkeley, Los Angeles, and San Francisco campuses. Most of the other UC campuses have submittal deadlines of December 31, 1996, or June 30, 1997. In order to comply with the CAS requirements while retaining as much flexibility as possible, UCSD retained Coopers and Lybrand, an accounting firm with experience and expertise on cost accounting standards, to assist with the development of the DS-2. In addition, two campus workgroups were established. The CAS Implementation Team is composed of staff representatives from each of the academic areas (Academic Affairs, School of Medicine, Scripps Institution of Oceanography), certain administrative areas (Accounting, Contract and Grant Administration, Internal Audit), and the members of the campus Recharge Review Committee. This group has been responsible for reviewing campus costing practices and proposing changes where necessary to attain compliance. The Steering Committee, composed of three vice chancellors and three faculty, have considered the proposed changes and their impact, and provided direction for the campus effort. The members of these two groups are listed on the attachment. As a result, and in spite of the short timetable, the campus DS-2 has been completed, reviewed by the Office of the President, and submitted to the Federal Government. We thank the members of the CAS Implementation Team and the faculty who participated on the Steering Committee for their time and efforts on this project. 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. In order to support the positions taken in the campus DS-2 and to ensure that flexibility in campus costing practices does not result in audit disallowances, the campus needs to develop, revise and clarify policies and procedures to ensure that campus costing practices are in compliance with CAS. The campus then needs to develop training and reference materials, and 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 have scheduled four meetings of the Implementation Team, and two meetings of the Steering Committee, as follows: CAS Implementation Team CAS Steering Committee August 15, 1:30-3:30 pm, September 20, 10:30-noon September 5, 1:30-3:30 pm October 30, 9-10:30 am September 27, 9-11 am,
October 17, 1-3 pm
While the Federal requirements which have been imposed on us are not subject to negotiation, the methods employed by the campus to comply with the requirements, and the level of flexibility and workload resulting from those methods, are important aspects of determination. We encourage all faculty and staff to offer suggestions and alternatives, and offer two ways that your input can be included:
1. CAS Orientation Forums for all interested faculty and staff are scheduled as listed below. You are invited to attend one of these forums, and you are strongly encouraged to bring your key faculty members and staff with you.
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
2. You may channel your suggestions through the CAS Implementation Team members who represent your area, or through members of the other working groups. Please consult the attached listing. 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 campus sponsored projects process reengineering group (SPEAR Team), the Research Administration Council, and through the CAS Orientation Forums. Some of the key CAS compliance issues are summarized below.
COST SHARING
One of the Cost Accounting Standards (CAS 501) requires that any cost sharing which is described and quantified in a proposal must be accounted for in campus records as part of project costs/value, and must be subsequently included in the calculation of overhead rates for sponsored activities. A number of steps are underway to enable the campus to comply with these requirements. 1. The Request for Extramural Support (RES) form, which is used to route proposals for campus approvals, has been redesigned. It identifies three categories of cost sharing: Equipment Funding, Expenditure, and Non-Expenditure. Each has a yes/no indicator and will require certain information and approval. The revised RES form and an instruction memo for the revised form has been distributed to departments. It is also available on the OCGA website and at the UCSD Storehouse. 2. The Cost Sharing team has designed two alternative mechanisms for tracking cost sharing in compliance with CAS, and is developing cost estimates for these alternatives. The members of this team are listed in the attachment. A decision on the preferred mechanism should be made by the end of August. The team is also drafting the implementing procedures for Extramural Funds Accounting and departments. 3. When this process has been completed, PPM 150-45, Cost Sharing in Federal Contracts and Grants will be revised to reflect these changes, to redefine cost sharing under CAS, and to describe strategies to minimize the requirements for formal cost sharing.
NETWORK COSTING
As information was collected for the DS-2, the charging of network costs to Federal awards was found to vary by department, building, and academic area, as well as by cost type. To meet the disclosure deadline, the DS-2 summarily disclosed that Computer and Networking Services are charged direct, and Computing Network Infrastructure costs are treated as indirect costs. Prior to the anticipated fall Federal site visit, the campus must now define what is meant by these two categories (what is included in each), and decide where variations are allowable due to unlike circumstances.
A group of campus personnel has been asked to develop the definitions needed, and to arrive at a consensus on which variations in costing are defensible. In addition, this group will make some recommendations on how the campus should handle the increasing cost of networking, and whether the current campus standards for telecommunications/networking specifications in new buildings need to be revised. The first meeting took place on August 16, at 1 pm. The members of this group, called the Network Costing Group, are listed in the attachment.
OTHER POLICY CHANGES New policy will need to be developed to attain CAS compliance regarding Cost Accounting Standards Criteria for Costing on Federal Awards (Direct versus Indirect, Basis for Proposing/Estimating versus Reporting/Invoicing ). We are expecting a status letter from Coopers & Lybrand with suggestions on other policies we may want to establish to support our DS-2.
Besides our Cost Sharing Policy (PPM 150-45), the following campus policies will also need to be revised to attain CAS compliance or to incorporate other changes:
PPM 130-3 Machine shops - Recharge Operations
PPM 150-14 Indirect Cost Rates Applicable to Research, Instruction, and other Sponsored Projects
PPM 150-35 Classification, Acceptance, and Administration of Awards PPM 300-40 Recharge and Other Income Producing Activities
The CAS Implementation Team will also review other existing campus policies, make inquiries to their respective departments/units, and consult with Administrative Records, to identify any other campus policies which will be affected by CAS. Where policy revisions are required, interim guidelines will be issued as a first step, to attain campus CAS compliance during the formal policy development process. TRAINING
One of the tasks for the CAS Implementation Team/Steering Committee is to develop a CAS training strategy. This is anticipated to involve the following components:
Initial Orientations/Open Forums
Development of Training and Reference Materials Initiation of a variety of training mediums such as Campus Notifications, Staff Development Programs, Academic Area Meetings, Middle Management Briefings, Website information, and Consultation Access
In conjunction with and as a result of the CAS implementation efforts, the campus will develop and schedule training/orientation for campus staff, and produce reference materials to guide and assist units in their efforts to comply with the standards. As much as possible, these materials and updated information will be added to the website listed earlier, which currently houses the campus DS-2.
Currently, the UCSD Medical Center, Managed Care Services, and Medical Practice and Ambulatory Care Services are excluded from the campus disclosure process, for two reasons:
1. The costing practices of these units are substantially different from those of the campus, and this would require a separate disclosure.
2. At the time the campus DS-2 was developed, these units had not received any Federal CAS-covered awards, and therefore could be excluded from the process.
However, these units have submitted at least two funding proposals which, if awarded, would require the development and submittal of a second DS-2.
It is clear that the Federal imposition of Cost Accounting Standards on universities is resulting in major changes for us, and will require a significant 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.
Sincerely,
David D. Sworder Steven W. Relyea John A. Woods Acting Vice Chancellor Vice Chancellor Vice Chancellor
for Research Business Affairs Resource Management and Planning
Attachment
CAS STEERING COMMITTEE
Dr. Richard Attiyeh, Interim Senior Vice Chancellor, Academic Affairs X43130
rattiyeh@ucsd.edu
Dr. William Chang, Professor/Chair Emrts, ECE X42737
wchang@ucsd.edu
Dr. Michael Criqui, Professor, Family/Prevent. Medicine X43723
mcriqui@ucsd.edu
Dr. Bernard Minster, Chair/Professor, IGPP X45650
jbminster@ucsd.edu
Steve Relyea, Vice Chancellor, Business Affairs X43390
relyeas@ucsd.edu
Dr. Nicholas Spitzer, Professor, Biology X42456
nspitzer@ucsd.edu
Dr. David Sworder, Acting Vice Chancellor for Research X46654
Sworderd@ucsd.edu
John Woods, Vice Chancellor, Resource Management and Planning X46280
jwoods@ucsd.edu
CAS IMPLEMENTATION TEAM
Dennis Beeson, Accountant, Accounting X44502
dbeeson@ucsd.edu
Bill Brophy, Director of Financial Analysis, Resource Management X46517
bbrophy@ucsd.edu
Bill Cherom, Financial Officer, Academic Affairs X41289
bcherom@ucsd.edu
Paul Croft, Asst Dean, Engineering X46207
pcroft@ucsd.edu
Tom Collins, Deputy Director, SIO X42832
tcollins@ucsd.edu
Linda Dale, Director, Contracts and Grants X43333
ldale@ucsd.edu
Clayton Egan, Accountant, Accounting X44673
cegan@ucsd.edu
Thyra Fleming, Administrative Analyst, SIO X47238
tfleming@ucsd.edu
Bob Hogan, Director of Corporate Finan. Svc., UCSDMC X32173
rhogan@ucsd.edu
Teresa Hsiao, Financial Analyst, School of Medicine X47885
thsiao@ucsd.edu
Nick Johnston, General Accounting Manager, Accounting X44736
njohnston@ucsd.edu
Pat Jordan, Management Services Officer, MPL X41802
pjordan@ucsd.edu
Lyle Kafader, Dir./Adm. Computer Analysis, Sch. Engineering X46087
Lkafader@ucsd.edu
Don Larson, Assistant Vice Chancellor, Business and Financial Svcs. X40386
dlarson@ucsd.edu
Joanna Mancusi, Administrative Analyst, CSE X43712
jmancusi@ucsd.edu
Charlena McElveen, Admin Analyst, Extramural Funds Accounting X45945
cmcelveen@ucsd.edu
Debbie McGraw, Assistant Dean/Fiscal Affairs, School of Medicine X43705
dmcgraw@ucsd.edu
Agnes Nishikawa, Director of Budget/Finance, Auxiliary/Plant Svcs. X40306
anishikawa@ucsd.edu
Stephanie Peterson, Director, Internal Audit X43617
svpeterson@ucsd.edu
Stephanie Rea, Admin Analyst, School of Engineering X46797
srea@ucsd.edu
Gail Robotta, Manager, Resc. Ops., University Relations X48159
grobotta@ucsd.edu
RB Smith, Executive Officer, CASS X43933
rb@ucsd.edu
Leon Snoberger, Director, Resc. Analysis, Student Affairs X42390
lsnoberger@ucsd.edu
Jan Specht, Senior Administrative Analyst, Chemistry/Biochemistry X44616
jspecht@ucsd.edu
Steve Ste. Marie, Accountant, Accounting X44562
sstemarie@ucsd.edu
COST SHARING TEAM
Bill Brophy, Director of Financial Analysis, Resource Management X45617
bbrophy@ucsd.edu Barbara Connolly, Programmer, ACT/Systems X49777
bconnolly@ucsd.edu
Thyra Fleming, Administrative Analyst, SIO X47238
tfleming@ucsd.edu
Marianne Generales, Sr. Admin Analyst, OGSR X46636
mgenerales@ucsd.edu
Gene Hasegawa, Assistant Director, Contracts/Grants, Sch. Medicine X43203
ghasegawa@ucsd.edu
Nick Johnston, General Accounting Manager, Accounting X44736
njohnston@ucsd.edu
Pat Jordan, Management Services Officer, MPL X41802
pjordan@ucsd.edu
Lyle Kafader, Dir./Adm. Computer Analysis, Sch. Engineering X46087
lkafader@ucsd.edu
Charlena McElveen, Admin Analyst, Extramural Funds Accounting X45945
cmcelveen@ucsd.edu
Emma Reyes, Manager, Extramural Funds Accounting X41110
ereyes@ucsd.edu
Carol Ring, Administrative Analyst, Medicine 622-2121
cring@ucsd.edu
RB Smith, Executive Officer, CASS X43933
rb@ucsd.edu
Jan Specht, Senior Administrative Analyst, Chemistry/Biochemistry X44616
jspecht@ucsd.edu
NETWORK COSTING GROUP
Dennis Beeson, Accountant, Accounting X44502
dbeeson@ucsd.edu
Bill Brophy, Director of Financial Analysis, Resource Management X45617
bbrophy@ucsd.edu Edward Dinkins, Programmer/Analyst, BFS X43089
edinkins@ucsd.edu
Ron Espiritu, Principal Administrative Analyst, School of Medicine X41512
respiritu@ucsd.edu
Ann Hanson, Assistant Director, Customer Services, ACT X47447
ahanson@ucsd.edu
Lyle Kafader, Dir./Adm. Computer Analysis, Sch. Engineering X46087
lkafader@ucsd.edu
Mick Laver, Programmer Analyst, SIO X42040
mlaver@ucsd.edu
Tony Wood, Director, ACS X44050
twood@ucsd.edu