Policy Title
Policy Number
Version
Contact
Effective Date
Approved By
Cost Policies
312
DRAFT 0
Candy Shin, Chief Financial Officer
Cost Policies
Policy
It is the goal of IRIS to cover the full costs of each individual sponsored project where permitted
by the established policies of the funding agency.
Purpose
The purpose of this cost policy statement is to summarize the methods and procedures that this
organization will use to allocate costs to various programs, grants, contracts and agreements.
OMB Circular A-122, “Cost Principles for Non-Profit Organizations,” establishes the principles
for determining costs of grants, contracts and other agreements with the Federal Government.
Direct costs are those that can be identified specifically with a particular final cost objective.
Indirect costs are those that have been incurred for common or joint objectives and cannot be
readily identified with a particular final cost objective.
IRIS policies for indirect costs are based on the multiple allocation base method described in
OMB Circular A-122. The multiple allocation base method accumulates indirect costs into
separate cost groupings, which are allocated to different functions by means of a base, which
measures the relative degree of benefit.
Only costs that are allowable, in accordance with the cost principles, will be allocated to
benefiting programs.
Scope
Responsibilities
Definitions
Procedures
1
General Accounting Policies
A.
Basis of Accounting – Accrual Basis
B.
Fiscal Period – July 1 through June 30
C.
All allowable direct costs are charged directly to programs, grants, activity, etc.
D.
Allowable direct costs that can be identified to more than one program are prorated
individually as direct costs using a base most appropriate to the particular cost being
prorated.
E.
Office Overhead Pools – IRIS office expenses are aggregated into two indirect cost pools
which primarily benefit the programs whose personnel physically work at the two office
locations.
1)
Washington, DC Office Overhead – General expenses associated with the
headquarters DC office are allocated to benefitting functions on the basis of the
salaries and wages of personnel working at the DC office.
Data Management Center (DMC) Office Overhead – General expenses associated
with the Seattle, WA, data management center are allocated to benefitting functions
on the basis of the salaries and wages of personnel working at the DMC offices.
General & Administrative (G&A) Pool - All other allowable general and administrative
costs (costs that benefit all programs and cannot be identified to a specific program) are
allocated to programs, grants, etc. using a base that consists of total costs less equipment,
participant support costs and subaward costs exceeding $25,000 per subaward per year.
2)
F.
2
General Ledger Expense Accounts
The IRIS General Ledger account code is a 7-character (non-award) or 11-character
(award accounts) structure.
01xx-xxx
Asset Accounts
02xx-xxx
Liability Accounts
03xx-xxx
Equity Accounts
04xx-xxx
Revenue Accounts
Fringe Benefits:
06xx-xxx
Fringe Benefits expenses
0620-000
Pension - SEP/IRA
0630-000
Health Insurance
0640-000
Life Insurance
0645-000
Disability Insurance
0650-000
Parking
0655-000
Commuting
0660-000
Paid Time-Off (PTO)
0670-000
Education
0680-000
Misc. *
* Benefits provided through a professional employer organization (PEO), such as
Administaff, are expensed to the fringe benefits pool based on the allocation of service
fees associated with the fringe benefits.
Indirect Expenses:
07xx-A01
0710-A01
0715-A01
0720-A01
0725- A01
0726-A01
0727-A01
0728-A01
0750-A01
0755-A01
0756-A01
0760-A01
0770-A01
0780-A01
0781-A01
0782-A01
0783-A01
0784-A01
0785-A01
Washington, DC (Headquarters) Office Overhead pool expenses
Salaries
Fringe Benefits
Computer equipment
Equipment Leases
Small equipment (other)
Furniture
Software
Maintenance and Repair
Consultant Services
Professional Services
Rent
Office Supplies
Internet
Miscellaneous
Postage
Publications
Shipping
Telephone
3
07xx-A01
0786-A01
0787-A01
0788-A01
Washington, DC (Headquarters) Office Overhead pool expenses
Temporary help
Training
Water
07xx-DMC
0710-DMC
0715-DMC
0720-DMC
0725-DMC
0726-DMC
0727-DMC
0728-DMC
0750-DMC
0755-DMC
0756-DMC
0760-DMC
0770-DMC
0780-DMC
0781-DMC
0782-DMC
0783-DMC
0784-DMC
0785-DMC
0786-DMC
0787-DMC
0788-DMC
Seattle, WA (Data Management Center) Office Overhead pool expenses
Salaries
Fringe Benefits
Computer equipment
Equipment Leases
Small equipment (other)
Furniture
Software
Maintenance and Repair
Consultant Services
Professional Services
Rent
Office Supplies
Internet
Miscellaneous
Postage
Publications
Shipping
Telephone
Temporary help
Training
Water
08xx-000
0810-000
0810-100
0815-000
0820-000
0826-000
0827-000
0828-000
0830-000
0831-000
0832-000
0833-000
0834-000
0835-000
0840-000
0850-000
General & Administrative (G&A) pool expenses
Salaries
Business Office Salaries
Fringe Benefits
Computer equipment
Small equipment (other)
Furniture
Software
Staff Travel – Domestic
Staff Travel – Foreign
Committee Travel - Domestic
Committee Travel - Foreign
Misc. Travel - Domestic
Misc. Travel - Foreign
Meetings & Conferences
Maintenance and Repair
4
08xx-000
0855-000
0856-000
0857-000
0858-000
0865-000
0870-000
0880-000
0881-000
0882-000
0883-000
0884-000
0885-000
0886-000
0887-000
General & Administrative (G&A) pool expenses
Consultant Services
Professional Services
Audit/Accounting
Legal Services
Insurance
Office Supplies
Communications
Miscellaneous
Printing
Memberships/Subscriptions/Professional Activity
Shipping
Bank Fees
Temporary help
Training
Unallowable Expenses:
0999-000
0999-000
0999-001
0999-002
0999-003
0999-004
0999-005
0999-006
0999-007
0999-099
0999-100
0999-102
Unallowable expenses
Miscellaneous/other
Promotional items
Donations/Contributions
Gifts (non-IRIS staff)
Travel – misc.
Penalties/Fines
Alcohol
Staff
Lobbying
Bank/investment fees
Workshop/Entertainment/Social Activities
5
Award Expenses:
XXXX - XXX - XX - XX
a
b
- c
- d
Award Segment – Activity Segment – Suffix Code – Transaction Code
a
b.
c.
d.
The first 4 numbers represent an award or funding source.
The next 3 characters represent a task or program budget under the award
(level at which expenditures are budgeted and tracked).
The next 2 numbers (suffix code) represent an expense category.
The last 2 characters (transaction code) represent an expense sub-category.
Award Code
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
Task Code Suffix Code
XXX
39
XXX
40
XXX
43
XXX
44
XXX
45
XXX
46
XXX
47
XXX
48
XXX
49
XXX
50
XXX
51
XXX
52
XXX
53
XXX
54
XXX
55
XXX
56
Description
Salaries Expense (HQ DC Office)
Salaries Expense (non-HQ)
Office Overhead
Equipment
Travel
Participant Support Costs
Materials & Supplies
Publications & Printing
Consultant Services
Subawards
Subawards
Subawards
Subawards
<inactive>
Misc. Subawards
Other Direct Costs
Allocation of Costs
A.
Compensation for Personal Services - Employee salaries are either charged
directly to an award or are charged to an indirect cost pool, based on whether the
function performed by the employee benefits a particular program (direct charged)
or whether it has more general benefit to all programs and the organization as a
whole.
All compensation charges are supported by monthly or weekly (non-exempt)
employee timesheets, which reflect the total time worked by each employee, and
allocation of that time to specific awards, where appropriate, or to the applicable
indirect cost pool. Supervisors review and approve employee timesheets. IRIS
maintains auditable labor distribution records that reflect the actual activities of
employees to support direct and indirect charges.
6

Direct Costs – Most IRIS employees’ salaries are charged directly to awards,
particularly those employees who are dedicated to a particular project.

Indirect Costs – Where employees’ work cannot be specifically allocated to a
given grant or award, salary expenses are charged indirectly.
The following employees charge 100% of their salary costs indirectly to the office
overhead pools:
o
Data Management Center (DMC) Office Manager
o
Headquarters (DC) Office Manager
The following employees charge 100% of their salary costs indirectly to the G&A
pool:
o
President
o
Executive Assistant
o
Director of Planning
o
Director of Program Support and Special Projects
o
Financial Services staff
o
Sponsored Projects Office staff
o
Human Resources staff
The following employees may charge their salary costs to both direct and indirect
activities:
o
Meeting Planner
o
Media & Graphics Specialist
o
Web Developer
o
Public Outreach Manager
B.
Fringe Benefits – Fringe benefits expenses are budgeted and expensed as a
percentage of actual salary or wage expenses.
The fringe benefits pool includes:
1.
payroll taxes (FICA)*
2.
unemployment insurance*
3.
workers compensation*
4.
retirement plan
5.
health insurance*
6.
life insurance*
7.
disability insurance*
8.
parking/commuting
9.
education/tuition reimbursement*
10. accrued paid-time off
11. employee recognition program
12. other – as may be approved by management and the benefits committee
* Benefits provided through a professional employer organization (PEO) are
expensed to the fringe benefits pool based on the allocation of service fees
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associated with the fringe benefits.
Release time costs (paid-time off (PTO), holiday pay, etc.) are included in salaries
expense. PTO leave earned but not used during each fiscal period is accrued at
fiscal year-end in the fringe benefits pool.
The employee recognition program provides gifts to employees for years of service,
at five, ten, fifteen, twenty, and twenty-five year milestones. The costs of such gifts
(e.g., tangible non-cash gifts, gift certificates) are included in the fringe benefits
pool.
C.
Board Expenses – Expenses for Board of Directors' travel and meetings are
charged as indirect costs in the G&A pool.
D.
Travel Costs - Allocated based on purpose of travel. Travel costs (local and outof-town) may be charged as either direct or indirect costs depending on the purpose
of the trip and/or the functional designation of the traveler. For example, travel of
the IRIS management or business office staff is charged as indirect costs. Travel of
direct-charge personnel to perform a specific task for an award would be considered
a direct cost.
E.
Participant Support Costs – Direct costs for items such as stipends or subsistence
allowances, travel allowances and registration fees paid to or on behalf of
participants or trainees (but not employees) in connection with meetings,
conferences, symposia or training projects.
1. Costs must be budgeted as participant support in the program or activity
budget specifically for the purpose of supporting the cost of attendance at
these events.
2. Travel expenses specifically identifiable for staff, consultants and/or other
participants who are receiving compensation (directly or indirectly) from IRIS
will be charged as travel expenses and not participant support.
3. Participant support costs may include general catering expenses for
workshops and meetings where meals and break refreshments are provided to
everyone, even though some participants' meals might normally be charged as
travel expenses.
4. Participant support does not include general meeting expenses, such as room
and audiovisual rentals or facility internet expenses.
F.
Professional Services Costs (such as consultants, software development and legal
services) - Allocated to the program benefiting from the service. Professional
service costs are charged directly to the program for which the service was incurred.
Costs that benefit all programs or are not identifiable to specific direct programs
will be allocated to G&A.
1. The cost of the annual audit is charged indirectly.
2. Legal fees incurred specifically for a (direct or indirect) program or activity
are charged to the program or activity that benefits from the service.
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G.
Occupancy/Rent – IRIS office lease expenses (Washington, DC and Seattle, WA),
including utilities, are charged indirectly to an office overhead pool. The cost of
other space and temporary rentals will be allocated to the program benefiting from
the space.
H.
Office Expense and Supplies (including office supplies and postage) - Allocated
based on usage. Expenses used for a specific program will be charged directly to
that program. Postage expenses are charged directly to programs to the extent
possible. Office supplies and postage purchased for general office use will be
allocated to an office overhead pool.
I.
Equipment – Equipment consists of all tangible nonexpendable personal property
with a unit cost of $5,000 or more and a minimum life expectancy of more than one
year. The cost of equipment includes the purchase price, transportation costs,
installation costs and other direct costs of readying for use. As NSF retains title to
equipment purchased under the cooperative agreements, IRIS expenses equipment
in the period purchased, charged directly to the programs authorized for such
charges. No equipment item is charged indirectly. Items below $5,000 are
reflected in the supplies category and expensed in the current year.
J.
Printing - Expenses are charged directly to programs that benefit from the service.
Expenses that relate to IRIS activities in general that cannot be identified to a
specific program will be charged to G&A.
K.
Insurance - Insurance needed for a particular program is charged directly to the
program requiring the coverage. Corporate and other organizational insurance
coverage that benefits all programs is allocated to G&A.
L.
Telephone/Communications – Office local and long-distance telephone expenses
are charged to the office overhead pool. Communication expenses that relate to
IRIS activities in general that cannot be identified to a specific program will be
charged to G&A. Other communication expenses are charged to programs if
readily identifiable.
M.
Training/Conferences/Seminars – Allocated to the program or activity benefiting
from the training, conferences or seminars.
N.
Other Costs (including dues, licenses, fees, etc.) - Other costs will be allocated to
the program or activity incurring the expense. Expenses that relate to IRIS
activities in general that cannot be identified to a specific program will be charged
to G&A.
O.
Unallowable Costs – IRIS recognizes costs that are unallowable in accordance with
OMB Circular A-122, including alcoholic beverages, bad debts, advertising (other
than help-wanted ads), contributions, entertainment, fines and penalties, lobbying
and fundraising costs, may not be charged to Federal awards. Unallowable
expenses are charged to IRIS unrestricted funds.
9