Federal Awards: Cost Allocations

1.0    Purpose

This policy establishes guidelines for allocating program, staff, general, and administrative costs for federal awards.

2.0    Revision History

3.0    Persons Affected

3.1    Project manager or principal investigator and project staff of a program supported by a federal award

3.2    Casper College Financial and Accounting Management employees

4.0    Policy

The policy of Casper College is to ensure the following.

4.1    The college complies with federal regulations and requirements regarding cost allocation for federal awards.

4.2    The college receives funding due per the award agreement.

5.0    Definitions

5.1    Federal Award. Federal funding provided to support a specified project or goals. The award can be in the form of a grant, contract, cooperative agreement, or pass through federal funding from another entity.

5.2    Uniform Grant Guidance (UGG). A governmental-wide framework for grants management. An authoritative set of rules and requirements for federal awards that synthesizes and supersedes guidance from earlier Office and Management Budget circulars.

6.0    Responsibilities

6.1    The project manager or primary investigator, project staff, and the associate controller are responsible for providing accurate information, documenting cost, and allocating cost appropriately per the award agreement.

6.2    The vice president of administrative services is responsible for maintaining compliance with this policy.

7.0    Procedures

Employee Costs

7.1    Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:

7.1.1    Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated;

7.1.2    Be incorporated into the official records of the college;

7.1.3    Reasonably reflect the total activity for which the employee is compensated by the college, not exceeding 100% of compensated activities;

7.1.4    Encompass both federally assisted and all other activities compensated by the college on an integrated basis, but may include the use of subsidiary records as defined in the college’s written policy;

7.1.5    Comply with the college’s established accounting policies and practices; and

7.1.6    Support the distribution among specific activities or cost objectives.

7.2    Employees whose salary and wages are paid, in whole or in part, with federal award funds or whose compensation is used as matching funds for a federal award must complete monthly (or as stipulated in the award agreement) time and effort reports documenting hours worked.

7.3    The employee signs the report, secures the supervisor’s signature, and submits the report to the associated controller.

7.4    The associate controller records the information as appropriate and notifies the project manager or principle investigator of any discrepancies between the time and effort report and payroll.

Other Allocable Costs

7.5    A cost is allocable to a particular federal award if the goods or services involved are chargeable or assignable to the federal award in accordance with the relative benefits received. This standard is met if the cost:

7.5.1    Is incurred specifically for the award;

7.5.2    Benefits both the federal award and other work at the college and the cost can be proportionally distributed based on approximate use;

7.5.3    Is necessary to the overall operation of the college and is assignable in part to the federal award.

All activities that benefit from the college’s indirect cost, including unallowable activities and donated services by the college or third parties, will receive an appropriate allocation of indirect costs.

The college may not charge any cost allocable to a particular federal award  to other federal awards to overcome fund deficiencies, avoid restrictions imposed by federal statutes, regulations, or terms and conditions of the federal awards, or for other reasons. However, this prohibition does not preclude the college from shifting costs that are allowable under two or more federal awards in accordance with existing federal statues, regulations, or the terms and conditions of the federal award.

Direct cost allocation principles. If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the college should allocate the cost to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the college may allocate or transfer the cost to benefitted projects on any reasonable documented basis. Where the purchase of equipment or other capital asset is specifically authorized under a federal award, the costs are assignable to the federal award regardless of the use that may be made of the equipment or other capital asset involved when no longer needed for the purpose for which it was originally required.

If the contract is subject to cost accounting standards (CAS), the college must allocate the cost to the contract under the CAS. To the extent that CAS is applicable, the allocation of costs in accordance with CAS takes precedence over the allocation provision.