University Administrative Policies

 

UNM_Policy_Office-L communicates important policy announcements (such as policy approvals, revisions, or campus review-and-comment periods).




UNM Policy Office

MSC05 3357
1 University of New Mexico
Albuquerque, NM 87131

Physical Location:
Scholes Hall
114 A and B

Phone: (505) 277-2069

Administrative Policies and Procedures Manual - Policy 2400: Cost Accounting Standards

Date Originally Issued: 07-15-1998
Revised: 07-01-2015

Authorized by RPM 5.9 ("Sponsored Research")
Process Owners:  University Controller and HSC Senior Executive Officer for Finance and Administration

1. General

The Office of Management and Budget through 2 CFR Part 200 ("Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards") (Uniform Guidance) requires the University to comply with applicable cost accounting standards published by the Cost Accounting Standards Board (CASB) and to submit a CASB Disclosure Statement Form DS-2 (Form DS-2) to the University's cognizant audit agency. The DS-2 describes the University's cost accounting practices. These cost accounting practices must be followed by all University units, departments, and programs that use University funds.

2. Cost Accounting Standards

Section 200.419 ("Cost Accounting Standards and Disclosure Statement") of the Uniform Guidance identifies four (4) cost accounting standards that apply to educational institutions, which are described below.

2.1. Cost Accounting Standard 501

This standard requires that costs be estimated, accumulated, and reported consistently. A cost that is included in a contract or grant proposal as a direct cost must be accumulated as a direct charge in the accounting records. The same rule applies to indirect charges.

2.2. Cost Accounting Standard 502

This standard requires that costs incurred for the same purpose be accounted for in the same manner. A department cannot account for such costs in one manner while another department accounts for them differently. Therefore, this standard requires that the University have established cost accounting practices that are applied consistently throughout the campus.

2.3. Cost Accounting Standard 505

This standard requires that unallowable costs be identified and excluded from any costs charged to federal contracts and grants. The University's policies and procedures for complying with this standard are described in UAP 2410 ("Accounting for Federally Defined Allowable and Unallowable Costs").

2.4. Cost Accounting Standard 506

This standard requires that the University's cost accounting period be the same as the University's fiscal year.

3. Form DS-2

The University Controller is responsible for submitting the Form DS-2 to the cognizant agency. The Form DS-2 discloses the University's cost accounting practices, which must comply with the Uniform Guidance and applicable cost accounting standards. The Controller is also responsible for maintaining the accuracy of the Form DS-2 and filing amendments when disclosed practices are changed to comply with new or modified standards, or are changed for other reasons. Costs will be disallowed if the University fails to comply with the Uniform Guidance or fails to consistently follow its established or disclosed cost accounting practices (Form DS-2) when estimating, accumulating, or reporting the costs of sponsored agreements.