Presentation on theme: "Basic Understanding of A-21, CASB, and DS2"— Presentation transcript:
1Basic Understanding of A-21, CASB, and DS2 Disclosure Statement Training: Departmental Administrators & Business ManagersBasic Understanding of A-21, CASB, and DS2Welcome!
2Disclosure Statement Training: Departmental Administrators & Business Managers Presentor:Carolyn B. Taylor, Contracts and Grants DivisionDisclosure Web Site:All Policies and Procedures related to the University Disclosure Statement may be found under the Disclosure Policies and Disclosure Procedure linksPolicies are effective January 1, 2006My name is Carolyn Taylor. I am in the Contracts and Grants Division. Today I will be giving you an overview of the A-21, CASB, and Disclosure Statement (DS2) and what brought it about.
3Training Offered Beginning in March 2006 Basic Understanding of A-21, CASB, and DS2Cost Transfers, Program Income, & Cost ShareDirect and F&A CostsTime and Effort ReportingService CentersAccount Maintenance & Close-outBeginning in March 2006, we began offering training classes that cover the new DS2 policy.Because you are the fiscal agents of the University it is crucial that you understand the new policies. We will provide the training but you are responsible for this policy. From the time an item leaves your desk, you are responsible. Some people say that they thought someone would catch it down the line if it was not okay. NO! Because we all are fiscal agents of the University, grant administration needs to be performed accurately and in accordance with policy/procedure from the start or initiation.
4You are Here Beginning in March 2006 Basic Understanding of A-21, CASB, and DS2Why are you here?So, today, you are here. Why are all these training sessions? What do you hope to gain? Why do you think you are here?Go around and ask each participate why they are here. Personalize it.
5What you should gain?A better communication between C&G and departmental administrators/business managers concerning the new policies.A better understanding of how A-21 and CASB effects what we do.A lot of you are here because you are required to be here but you have a lot to gain by being here.- Better communications and a forum to ask questions- A better understanding of how the new policies effect what you are doing.How are we going to gain this?
6Course 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.We will gain this by meeting our objectives.
7Definitions 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 UGA’s policy and procedures regarding cost accounting practices.Jim Vitale did a review of UGA’s cost accounting practices and showed us where our risk were so we revised our original DS2 to minimize these risk.Go through DefinitionsTie them together – How university should treat cost cost account standards applied to university. We had to tell government how we were applying the CAS principle and disclose in a document (DS2)Let’s look at the DS2 now…
8What is DS2(Disclosure Stmt 2)? Documents and discloses the University cost accounting practicesRequired 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 proceduresCost-sharing policiesTime and effort reporting policies and proceduresPolicies on “Service Centers”DHHS is our Cognizant Agency. Departnt of Health and Human ServicesDS1= is required of corporate non profit corps – example Georgia Tech Research Corp – it is a arms lengthDS2 – required of Institutions of higher learning.DS2 Update:UGA submitted its revised DS2 – July 1, 2005DCAA (Defense Contract Audit Agency) has performed an adequacy review of UGA’s Revised DS2DCAA will soon be on campus doing a compliance review.
9How was it Developed?Three working group committees were formed comprised of College and Departmental Business Managers and Faculty representativesSteering Committee comprised of Associate/Assistant Deans, Department Head, and Center Director representatives
10What does it do? New Policies Existing Policies – Revised Cost TransferProgram IncomeService CenterExisting Policies – RevisedCost ShareDirect CostPersonnel Activity ReportThe Cost Transfer Policy, Program Income and Cost Share will be covered by LaKeiya Keese.Service Centers and PARS will be covered by Celise Elder.Direct Cost will be covered in Tara’s class.
11What 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?Some of your faculty think it is just UGA. We are consistent with other universities
12Governing BodyFederal 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)
13What is OMB Circular A-21?Issued in 1958 by Office of Management and BudgetFederal effort to establish government wide cost principlesApplicable to research and development grants, contracts and other funding agreements with educational institutions.It has undergone numerous revisions in 44 years.
14May,1994 A-21 Revisions“Facilities & Administrative costs” replaced the phrase “indirect costs”Four Cost Accounting Standards (CAS) applicable to educational institutions incorporated into A-21Institutions receiving more than $25 million in federal sponsored agreements must submit a Disclosure Statement.No one probably has a thourgh understanding but some things you should know about it.
15What 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 costsDefines methods of F&A cost rate identification and calculation.We cannot charge to a grant if we can not charge to regular university account.To see the full A-21, this is the web site.
16Who cares? Will I Ever Use this in my job? Each of us are fiscal agents of the UniversityIt is everyone’s responsibility to be knowledgeable of University Policies and ProceduresIgnorance of the policies and procedures is not an excuse for not following them.Disallowed charges and penalties dept responsibilities.Northwestern – agreed to settle government claims that its scientists had spent less time than promised on federally funded research.Federal agencies are now less willing to treat universities differently than a defense contractor with regard to documenting costs and time spent on projects
17Why do I care about the rules? University of Alabama - $3.4 million in fines for applying resources from an existing grant toward a new projectHarvard University- $3.3 million settlement. Improper Accounting on Federal Grant for “effort reporting” or “salary accounting”Northwestern University - $5.5 million settlementJohns Hopkins University - $2.6 Million SettlementExample – Moving expenses. Our university does not pay moving. A grant might agree to it. But, since univ doesn’t pay, then can not charge grant. Not our rule, it is there’s.Northwestern – agreed to settle government claims that its scientists had spent less time than promised on federally funded research.Federal agencies are now less willing to treat universities differently than a defense contractor with regard to documenting costs and time spent on projects
18What does the A-21 Cost Principles do? Requires a costBe allowableBe allocableBe reasonable (prudent person test)Be treated consistentlyBe necessary to perform the aims of the projectBe permissible under the lawTara’s class on Direct and F&A cost will go into this in more detail.
19Specific Rules on Cost Allowability Section J of Circular A-21 (hand out)Currently describes 54 types of costsAlphabetical orderFor some costs, also specifies approval requirements, documentation and other provisions.This is a brief summary of Section J. For the full document , see the web site.
20What 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 (F&A)? Toner or paper for the printer, General office supplies or equipmentAre 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?
21Questions to ask (con’t) 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?Departmental Internal audit findings have found that some departments are completing e-payroll but not maintaining the paper copy signed/authorized by the employee.Secondly and most importantly, is the employee being charged to the correct accounts?Request log, or sheet, .
22Questions to ask (con’t) 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?Brad’s class will cover the close out procedures for an account.
23Questions to ask (con’t) Are you reimbursing subcontractors and consultants with verifying if the service is completed?Are you tracking the cost sharing committed?PI needs to sign off on subcontracts
24Questions to ask (con’t) Are you managing federally funded equipment properly?What happens if we are not in compliance?Does anyone know when we are not doing what we are suppose to be? How does the Government know? Because they come back and audit us.
25Audits 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 AuditsProject Specific Programmatic and Financial Audits (Office of Inspector General, OIG)6 – 7 months a yearWith money flowing through now – will increase instead of decrease. The repercussion of these audits - non compliance.
26AuditsThe 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.
27Responsibilities OSP – Review and approve proposal packages and provide final approval on CAS exceptions and justifications.Provide necessary assistanceProvide CAS Exception approval when appropriately justified by PI and Department
28Responsibilities 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 F&A rate.If matching funds or in-kind contributions, secures written approval from each contributor.The role of the Principal Investigator (PI) is to direct the performance of research, instructional, and public service activities in compliance with both the terms of the agreement (contract, grant, or cooperative agreement) and all University policies and procedures governing institutional stewardship and oversight of sponsored projects.While the performance of many of the roles described below may be delegated, the responsibility remains with the Principal Investigator.
29Responsibilities Principal Investigator (con’t) If any financial conflict of interest, discloses existence.Routes completed information to Office for Sponsored Programs (OSP)Pre-award spending or extensions of timeScope of work and any modifications and approval
30Responsibilities Principal Investigator (con’t) initiation of programmatic changes to the projectinitiation of hiring or assignment process and approval of personnel assigned to the projectassurance of integrity and safeguarding of notebooks and scientific datacompliance with timely submission of accurate interim programmatic (technical) reportsassurance of quality, timeliness, and programmatic performance of subcontractsinitiation of materials transfer agreement when receiving biological materials from an outside source.
31Responsibilities Principal Investigator (con’t) Initiates expenditure of fundsInitiates allocation of cost sharing dollars if applicableReviews invoices from and approves payments to subcontractorsInitiates request for rebudgetingRequests for cost transfers – if greater than 90 days, must sign
32Responsibilities Principal Investigator (con’t) Reviews restricted account status reports and resolves errors in timely mannerWhen appropriated, request access to residual balancesComplies with requirements of the personnel activity reportsPrepares final programmatic narrative report
33Responsibilities Department Administration and Business Managers: Monthly reconciliation of project costsPAR formsCost transfersFollowing UGA policy and proceduresBesides doing everything that the faculty ask you to do, which is 99 % of your job, keep these in mind.
34Responsibilities Contract & Grants: Monthly, Quarterly, Predetermined and Final reports/billingsBudget Amendment ReviewsEstablish ProjectsEstablish Account Numbers