ALLOWABLE EXPENDITURES
BY PROGRAM
DAN NORDQUIST, OGRD
MARY HOFFMAN, CAHNRS
SEPT. 30, 2004
WHAT IS A PROGRAM?
• The various operating functions within the
University (e.g., instruction, administration,
and plant operation)
• The 3rd set of numbers/letters in an
account code
• Fund-subfund-program-budget-project
– 148-01-09A-4100-4101
EXPENDITURE GROUPS
• APPROPRIATED
FUNDS
• 01A THRU 10Z
• SPONSORED
PROJECTS
• 11A THRU 14Z
• OTHER ENTEPRISES
• 15A THRU 15Z
• ASSOCIATED
STUDENTS
• 16A THRU 16Z
• DEVELOPMENT FUNDS
• 17A
• AGENCY ACCOUNTS
• 17C
• SERVICE FUNDS
• 19
• COMPUTING SERVICES
• 19B
CAN I ???
• When evaluating an expenditure for
appropriateness:
– Make sure purchase is allowable within the
program. For purchases in programs 11-14,
review the sponsors restrictions
– Review pertinent WSU procedures
CONTACT BFO FOR ASSISTANCE
PURCHASES ON SPONSORED
PROJECTS
PROGRAMS 11A THRU 14Z
• Federal research and Federal “other” (11
and 12)
• Non-federal research and non-federal
“other” (13 and 14)
EXPENDITURES ON SPONSORED
PROJECTS
• Must conform to budget approved by sponsor.
– Most federal budgets, especially for grants, are
broad, some don’t even require submission of
categorical budgets to agency.
– They will refer to terms and conditions
– May provide for rebudgeting
– Non-federal budgets vary.
– May include terms and conditions or can be a
letter
– Often don’t address rebudgeting
CREATING FLEXIBILITY
Planning is the key – know what you need to do at preaward to make life easier at post award. This is time
well spent.
– Understand what the sponsor will allow
• Do specific types of expenditures require
justification? (F&A costs on federal awards)
• What changes does the sponsor allow after
making an award? Is it clear? Can I make it more
clear?
GET IT IN THE PROPOSAL
RESOURCES
• OGRD MEMORANDUM #24: Cost
Determination Guidelines for Sponsored
Agreements”
• Award Letter
• BFO
• SPS
COST DETERMINATION GUIDELINES
FOR SPONSORED AGREEMENTS
• OMB Circular A-21: Cost Principals for Educational
Institutions
• Cost Accounting Standards
• OMB Circular A110: Uniform Administrative
Requirements for Grants and Agreements with
Institutions of Higher Education
COST DETERMINATION GUIDELINES
FOR SPONSORED AGREEMENTS
• University delegates authority for fiscal compliance to
PIs and Departments (OGRD Memo #20)
• Requires development of significant expertise at all
levels.
ALLOWABLE COSTS
• Reasonable
• Allocable
• Consistent
– Direct and F&A costs treated like in like
circumstances
• Within limitations specifically defined in Circular
A-21 and the particular contract or agreement in
terms of cost and amount charged
DISTRIBUTION OF COSTS BETWEEN
SPONSORED PROJECTS
• Proportional Benefit Rule
• Interrelationship Rule
DIRECT COSTS
• Costs that can be identified specifically with a particular
sponsored project.
• The specific grant or contract gains explicit benefit from
the cost for a specific programmatic purpose.
• Direct costs require an action for expense to show (i.e.
purchase order, appointments, tevs, etc).
FACILITIES AND ADMINISTRATIVE
COSTS
• Costs incurred for common or joint objectives
• Can not be identified readily and specifically with a
particular sponsored project
• F&A costs require no action, they are “attached” to direct
charges. Go to the F&A pool.
CONSISTENT TREATMENT
• Required by OMB Circular A-21
– Assure that same types of costs no charged to
grants and contracts as both Direct and F&A
– Government doesn’t want to pay twice
• Reinforced by CAS 502
– Cost Accounting Standards requires institutions to
complete a disclosure statement to document
policies regarding classification of a cost as direct or
F&A.
SPECIAL CIRCUMSTANCES
• Costs normally considered F&A costs may be charged
directly to sponsored projects when:
– Project has special need for item or service
– Costs can be specifically identified to the work
– Costs are specified in the proposed budget and the
circumstances are described in proposal
– Sponsoring agency accepts the costs as part of the
projects direct cost budget.
EXTENSION SPONSORED PROJECTS
• Extension units use off-campus rate (26%) which
represents the “A” or administrative portion of F&A.
• Means that facilities charges may be directly charged to
sponsored programs.
• Must find way to determine proportional benefit.
– Can charge directly (pay vendor directly from
award)
– Use service center (Energy Program)
COSTS NORMALLY CONSIDERED
DIRECT
See OGRD Memo #24
•
Salaries, wages, fringe benefits
•
Supplies and Materials
•
Other
COSTS NORMALLY CONSIDERED
ADMINSTRATIVE
• Administrative and Clerical Salaries
• Office supplies, postage, basic telephone services,
memberships.
COSTS NORMALLY CLASSIFIED AS
ADMINSTRATIVE
• May be treated as direct costs under certain exceptional and unlike
circumstances if the circumstances meet definition of a major
project.
• Large, complex programs such s General Clinical Research
Centers, Primate Centers, environmental research centers
• Projects that involve extensive data accumulation, analysis
and entry, etc.
• Projects that require making travel and meeting
arrangements for large numbers of participants such as
conferences and seminars.
• Projects whose principal focus is the preparation and
production of manuals and large reports.
• Projects that are geographically inaccessible to normal
departmental administrative services such as seagoing
research vessels, astronomy projects, other remote sites.
COSTS NORMALLY CLASSIFIED AS
FACILITIES
• Building Depreciation
• Electricity
• Basic Phone Service
• Custodial Services
COSTS NORMALLY CLASSIFIED AS
FACILITIES
• May be treated as direct costs under certain
circumstances.
– If the off-campus rate is applied to the award.
• Situations described in previous “Special Circumstances”
slide
.
QUESTIONS?
PURCHASES ON STATE AND
FEDERALLY APPROPRIATED
FUNDS
APPROPRIATED FUNDS
(Programs 01A thru 10Z)
• Allowable Purchases:
– Goods and services which are necessary for
completion of official university duties.
– Job related supplies, services and
equipment, special protective clothing,
uniforms, travel, relocation costs.
– Special Licenses, documents etc. which are
required to complete job IF not notified of the need
for such documents prior to hiring.
– Special driver licenses, passports, ID cards
APPROPRIATED FUNDS (cont.)
• Non-allowable expenditures
– Any purchase not for official WSU business
• Grocery items, flowers, coffee makers, alcoholic
beverages
– Transactions which result in economic benefit to a
state employee.
– Purchases for the employee’s personal use.
EXPENDITURES ON SERVICE
CENTERS
SERVICE CENTERS
(Programs 07 and 15)
• Programs 07 vs. 15
• Allowable expenditures same as programs 01A thru 10Z
• Available funds should be first used to pay expenses
defined in budget provided in application.
• Salaries, wages, benefits for service center
personnel
• Goods and services related to activity
• Equipment depreciation
• Balances can be used to support other programs in area.
EXPENDITURES ON
WORKSHOP/CONFERENCE
ACCOUNTS
WORKSHOPS & CONFERENCES
(Programs 09G and 14_)
• Available funds should be first used to pay expenses
defined in budget provided in application.
• Salaries for conference facilitators,
administrators
• Goods and services related to conference
including food, alcohol, items for personal use
(t-shirts)
• Balances can be used to support other programs in
area.
EXPENDITURES ON
DEVELOPMENT FUNDS
DEVELOPMENT FUNDS (17A)
• Expenditures from discretionary accounts must
benefit WSU, supporting one or more of the
University's missions of research, education, and
public service. The use must conform with the
donor's intent for the gift. Additionally, such
expenditures must meet the test of public scrutiny
for appropriateness.
GENERAL PROVISIONS FOR
SELECTED ITEMS OF COST
Refer to handout