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Departmental Cost Activities

Departmental Cost Activities. Certified Approver Program Continuing Education Event Tuesday, October 11, 2005 11:00am – 12:00pm in 655 McNamara. Creating An Allocation & Documentation Standard.

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Departmental Cost Activities

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  1. Departmental Cost Activities Certified Approver Program Continuing Education Event Tuesday, October 11, 2005 11:00am – 12:00pm in 655 McNamara

  2. Creating An Allocation & Documentation Standard • The July 15, 1993, changes to A-21 severely limited the flexibility of departmental costing alternatives. • At the same time, however, A-21 has been constructed in a way that departments are bound to read as enhancing their flexibility. • Recommended: Universities have a sound set of costing policies, consistently applied.

  3. General Costing Policy Principles • Define direct and indirect costs • U of M Policy: Charging of Direct and Facilities and Administrative (Indirect) Costs http://www.fpd.finop.umn.edu/groups/ppd/documents/policy/Cost.cfm • U of M Training Job Aids: http://training.finop.umn.edu/materials-spa.html • Guidance for budgeting and rebudgeting • Treatment of Administrative salaries • Treatment of other Administrative costs • Consistency of costing process And…Guidance for allocation of costs across two or more projects

  4. A-21 section: C.4.d requires that: • The institution be responsible for assuring that costs charged to a sponsored agreement are reasonable, allowable, and allocable under the cost principles; • No one person should have complete control over all aspects of a financial transaction;

  5. A-21 section: C.4.d requires that (cont.): • Costs should be allocated among projects based on a benefit that can be determined without undue effort or cost; or, if the interrelationship of the projects precludes easy allocation of the costs, they may be allocated or transferred to benefited projects on any reasonable basis; and

  6. A-21 section: C.4.d requires that (cont.): • Generally, the manual or electronic signature of the investigator or his or her designee will be considered sufficient to document the reason for a charge or transfer under (#3) above.”

  7. Standards – cont. Business officers who are concerned about departmental costing practices should be mindful of the first two paragraphs of this new section, which place overall responsibility on the school and require checks and balances within the administrative process.

  8. Standards – cont. • Two flowcharts for assigning individual costs in compliance with both the “departmental administration” and “allocation and documentation” sections of revised A-21 follow.

  9. Questions? Lisa Carlson, OAR – carls044@umn.edu Kevin McKoskey, SPA – kevin@umn.edu Denise Seck, Controller’s Office – seckx001@umn.edu Al Willie, Audits – a-will@umn.edu

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