The Cost Accounting policies and procedures of the University of South Alabama are governed by OMB Circular A-21 (May 1996 Revision). Circular A-21 outlines five basic standards, upon which USA's standards are based. Those standards are summarized as follows:
Consistency in estimating, accumulating and reporting costs
by educational institutions
The purpose of this standard is to ensure that each educational institution's practices used in estimating cost for a facilities and administrative (indirect) cost proposal are consistent with cost accounting practices used by the education institution in accumulating and reporting costs. The fundamental requirement of this standard is the institution apply consistency in accounting procedures and applications between federal programs and non-federal programs.
Consistency in allocating costs incurred for the same
purpose by educational institutions
This standard requires that each type of cost be allocated only once and only one basis to any sponsored agreement or other cost objective. The standard requires that all classifications of cost must either be classified as and direct or an indirect. Additionally, their treatment should be consistent in all situations.
Accounting for unallowable costs by education institutions
The purpose of this standard is to facilitate the negotiation, audit, administration and settlement of sponsored agreements by establishing guidelines covering identification of cost specifically described as unallowable. The standard specifically requires that unallowable costs be identified and excluded from any charge (direct and indirect) to sponsored programs.
Cost accounting period of education institutions
This standard requires the institution to provide criteria for the selection of the time periods to be used as cost accounting periods for sponsored agreement cost estimating, accumulating, and reporting. It further requires that educational institutions shall use their fiscal year as their cost accounting period
Disclosure Statement for educational institutions
The final standard requires that education institutions that received aggregate sponsored agreement totaling $25 million or more in a fiscal period disclose their cost accounting practices by filing a Disclosure Statement (DS-2) with their cognizant agency. The University filed the DS-2 with the Department of Health and Human Services on June 29, 2007.In order to meeting the requirements of the Cost Accounting Standards as promulgated by OMB Circular 21, the University has developed and implemented the following Cost accounting policies and procedures:
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