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Cost Accounting Standards (CAS)

CASThe Cost Accounting Standards (CAS) applicable to educational institutions are defined in OMB Circular A21, Cost Principles for Educational Institutions.  It is a set of 19 standards issues by the United States Government to achieve uniformity and consistency in the cost accounting practices governing the measurement, assignment and allocation of costs to contracts with the United States.   One of the 19 is 9905.502, consistency in allocating costs incurred for the same purposes.  The purpose of this standard is to require that each type of cost is allocated only once and on only one basis (direct and F&A costs) to any sponsored agreement.  Exceptions to 9905.502 are commonly referred to as CAS exceptions.

What are the Cost Accounting Standards (CAS)?

The Cost Accounting Standards (CAS) applicable to educational institutions are defined in OMB Circular A-21 (http://www.whitehouse.gov/omb/circulars_a021_2004 ).  This Circular establishes principles for determining costs applicable to grants, contracts, and other agreements with educational institutions.  The principles are designed to provide that the Federal Government bear its fair share of total costs, determined in accordance with generally accepted accounting principles, except where restricted or prohibited by law.  A primary purpose is to require that each type of cost is allocated consistently, only once and on only one basis (direct or F&A) to any sponsored agreement.  Exceptions to this regulation are commonly called CAS exceptions.

What is the difference between direct and F&A costs?

Facilities and Administration (F&A) – sometimes referred to as indirect costs, or overhead   are real costs incurred in support of sponsored programs.  They represent the costs of doing business that are not easily identifiable with any single project.  Examples of F&A costs include buildings, electricity, utilities, and administrative research support.

Direct costs can be assigned fully to a specific project with a high degree of accuracy.  Direct costs include: salaries for faculty, technicians and students; fringe benefits; human subject incentives; animal costs; consultant pay and scientific supplies.

Who decided which costs will be charged to direct and which are F&A?

The decision is based on Emory’s approved F&A rate proposal as well as the Disclosure Statement (DS-2) that outlines and explains which costs will be consistently charged to direct and F&A categories.  

My former university allowed this cost to be charged as a direct cost, why won¿t Emory?

Each university must abide by its own approved DS-2 and F&A rate agreements.  Therefore, what may be allowed at one university is not necessarily allowable at another.

Is it possible for a cost normally charged as F&A to be charged as a direct cost to a project?

Yes, in certain circumstances expenditures normally charged to F&A may be charged as a direct cost to a project.  For the cost to be directly charged there must be circumstances that are different that those which normally classify the charge as F&A.  When an unlike circumstance meets this criteria it is called a CAS exception.

Examples of activities that might have unlike circumstances are:

  • Large, complex programs such as General Clinical Research Centers, Primate Centers, Program Projects, environmental research centers, engineering research centers, and other grants and contracts that entail assembling and managing teams of investigators from a number of institutions.
  • Projects which involve extensive data accumulation, analysis and entry, surveying, tabulation, cataloging, searching literature, and reporting (such as epidemiological studies, clinical trials, and retrospective clinical records studies).
  • Projects that require making travel and meeting arrangements for large numbers of participants, such as conferences and seminars.
  • Projects whose principal focus is the preparation and production of manuals and large reports, books and monographs (excluding routine progress and technical reports).
  • Projects which are geographically inaccessible to normal departmental administrative services, such as research vessels, radio astronomy projects, and other research field sites that are remote from campus.
  • Individual projects requiring project-specific database management; individualized graphics or manuscript preparation; human or animal protocols; and multiple project-related investigator coordination and communications.

What are examples of acceptable/unacceptable CAS exceptions?

  • CAS EXCEPTION-APPROPRIATE:  A proposal to develop and deliver 100 copies of a training manual needs $800 in paper, $400 in toner cartridges and $800 for a printer in order to produce the manual.  The development of a training manual is not standard activity and present significant and unusual cost not normally incurred by the department.
  • CAS EXCEPTION-APPROPRIATE:  A proposal to study malaria in a remote area outside of the US where data will be collected and entered into a database using a dedicated laptop.  These kinds of projects involve the accumulation of data in a field site which is far removed from campus and therefore geographically inaccessible to normal departmental services.
  • CAS EXCEPTION-NOT APPORPRIATE:  Staff will be off campus performing interviews and will need a cell phone to stay in communication with PI or with other patients.  Communication devices are very rarely allowable because it is impossible to prove that they were only used for the grant supporting the expense

What information is important when preparing a CAS exception?

  • A clear explanation of how the circumstance of this expense differs from those normally expected to be charged to F&A.  Never just list the items without a justification.
  • When in doubt call the School of Medicine Research office at 404-727-3774 to discuss.

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