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 DEVELOPMENT 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

CONTACT BFO FOR ASSISTANCE 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

EXPENDITURES ON SPONSORED PROJECTS 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 pre-award 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 Normally Extension units use off-campus rate (22.3%) 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 ADMINISTRATIVE 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.

COSTS NORMALLY CLASSIFIED AS ADMINSTRATIVE 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.

COSTS NORMALLY CLASSIFIED AS ADMINSTRATIVE 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.

APPROPRIATED FUNDS (Programs 01A thru 10Z) 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

SERVICE CENTERS (Programs 07 and 15) 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