Download presentation title - OSEP Ideas That Work

2015 Leadership Conference
“All In: Achieving Results Together”
Cost Principles
Part C
Charlie Kniseley, Debra Jennings, Hillary Tabor
U.S. Department of Education, OSEP, MSIP
Uniform Guidance
•
•
•
•
Purpose
What it is replacing
Organization of the guidance
Where to find the cost principles
(2 CFR §§200.400-200.475)
Cost Principles: Agenda
• Identify types of monitoring activities and grant
issues related to cost principles.
• Examine effective use of the OMB uniform guidance
to research cost principles.
• Evaluate and apply concepts to determine
allowability in real world examples.
Cost Principles:
Fundamental Assumptions
IDEA Grantees assume responsibility for:
• Administering IDEA grant funds efficiently and
effectively.
• Managing IDEA funds according to agreements,
objectives, and terms of the award.
• Using accounting practices that are consistent with
Uniform Guidance cost principles.
• Providing adequate documentation for costs
charged to the award.
Cost Principles: Purpose
To provide clarification about how Federal funds may
be used to help to ensure that Federal funds are used
in a manner that is compliant with Federal
requirements
Cost Principles:
Small Group Discussion
• What costs do you typically charge under the IDEA
Part C grant?
• How do you determine whether a specific cost is
allowable under the IDEA Part C grant?
• What do you do when you have questions about the
allowability of a cost under the IDEA Part C grant?
Cost Principles:
General Considerations
•
•
•
•
•
Allowability:
Is the cost reasonable and necessary for the program?
Do sound business practices support the expenditure?
Is the expense in compliance with laws, regulations
and grant terms?
To what extent is the expense allocable to the grant?
Is the price comparable to that of similar goods or
services in the geographic area?
Cost Principles:
What is “reasonable”?
The OMB Uniform Guidance says:
“A cost is reasonable if, in its nature and amount, it
does not exceed that which would be incurred by a
prudent person under the circumstances prevailing at
the time the decision was made to incur the cost.”
(2 CFR §200.404)
Cost Principles:
Brainstorming Activity
• What characteristics do you associate with a
“prudent” person?
• What are some circumstances that might affect the
price of a given item or service?
Cost Principles: Allocability
• In addition to considerations of reasonableness
and necessity, the Uniform Guidance also examines
the allocability of expenditures.
“If a cost benefits two or more projects or activities in
proportions that can be determined without undue
effort or cost, the cost should be allocated to the
projects based on the proportional benefit.”
(2 CFR §200.405(d))
Cost Principles:
Allocability (cont’d)
Allocability is the degree to which a given cost is an
allowable expenditure for the grant award.
Can range from:
• 0%, if the program receives no benefit from the
good/service.
to
• 100%, if the program receives all the benefit from
the good/service.
Cost Principles:
Small Group Activity
• Discuss the concept of allocability at your table.
• Discuss an example, either from work or personal
experience, in which the concept of allocability was
an important consideration.
Cost Principles: Considerations
• Is the cost generally an allowable expense (not
prohibited in the cost principles)?
• Is the cost necessary for the performance of the
grant project?
• To what extent is the expense allocable to the grant?
Cost Principles:
Considerations (cont’d)
• Is the cost reflected/aligned in the program’s
approved grant budget?
• For equipment and supplies, does it exist elsewhere
in the grantee’s inventory?
• Is there a less expensive alternative (or justification
for selecting the more expensive option)?
Cost Principles
(2 CFR §§200.421-200.430)
Provisions for (55) Specific Items of Cost






Advertising and Public
Relations
Advisory Councils*
Alcoholic Beverages
Alumni Activities
Audit Services*
Bad Debt




Bonding Costs
Collections of Improper
Payments
Commencement and
Convocation Costs
Compensation for
Personnel Services*
Cost Principles
(2 CFR §§200.431-200.440)





Compensation for Fringe
Benefits*
Conferences*
Contingency Provisions*
Contributions and
Donations
Defense and Prosecution of
Criminal and Civil
Proceedings, Claims,
Appeals, and Patent





Infringements.*
Depreciation
Employee Health and
Welfare Costs
Entertainment*
Equipment and Other
Capital Expenditures*
Exchange Rates
Cost Principles
(2 CFR §§200.441-200.450)




Fines, Penalties and Other
Settlements*
Fund Raising and
Investment Costs
Gains and Losses on
Disposition of Depreciable
Assets
General Costs of
Government*






Goods or Services for
Personal Use
Idle Facilities and Idle
Capacity
Insurance and
Indemnification
Intellectual Property*
Interest
Lobbying
Cost Principles
(2 CFR §§200.451-200.460)




Losses on Other Awards or
Contracts
Maintenance and Repair
Costs*
Materials and Supplies
Costs, Including Costs of
Computing Devices
Memberships,
Subscriptions, and






Professional Activities
Costs*
Organization Costs
Participant Support Costs
Plant and Security Costs
Pre-Award Costs*
Professional Service Costs*
Proposal Costs
Cost Principles
(2 CFR §§200.461-200.470)





Publication and Printing
Costs
Rearrangement and
Reconversion Costs*
Recruiting Costs*
Relocation Costs of
Employees
Rental Costs of Real
Property and Equipment*





Scholarships and Student
Aid Costs
Selling and Marketing
Costs
Specialized Service
Facilities
Student Activities Costs*
Taxes
Cost Principles
(2 CFR §§200.471-200.475)





Termination Costs
Training and Education
Costs*
Transportation Costs
Travel Costs*
Trustees
Cost Principles:
Small Group Activity
Given examples of requests related to the cost
principles, determine the allowability of the respective
costs using these guiding questions:
• Which selected item(s) applies to the example?
• Is the cost in the example allowable, unallowable,
or allowable under certain circumstances?
• Do you need more information in order to make a
determination (and if so, what information would
be helpful)?
Cost Principles: Types of Costs
Direct Costs are costs that can be identified specifically with a
program or cost objective:
• Personnel working directly on a program objective
• Supplies purchased for a specific program/project
• Service contract supporting program/project goals
Indirect Costs are those costs are typically not readily assignable
to a specific program or project:
• Facility operations/maintenance expenditures
• Costs for general administrative services
• Shared data and telecommunications expenses
Cost Principles:
Cognizant Agency (CA)
The agency that provides the most Federal funding to a
grantee is the Cognizant Agency.
• Grantees negotiate indirect cost rates with the CA.
• All Federal awarding agencies accept these
negotiated rates.
• ED is usually the CA for State grantees.
• ED is usually NOT the CA for most colleges and
discretionary grants
Cost Principles:
Indirect Cost Rates
Types of Indirect Cost Rates
• Provisional
• Final
• Predetermined
• Fixed
Use of Rates
• Unrestricted
• Restricted
Cost Principles: Key Concepts
•
•
•
•
•
Reasonable and Necessary
Allocability
Selected Items of Cost
State Contact Considerations
Direct v. Indirect
Cost Principles: Questions
• Questions?