UTMB HANDBOOK OF OPERATING PROCEDURES

Section 4 Fiscal Policies Subject 4.5 Cost Accounting Policy 4.5.2 Consistent Treatment of Costs

07/20/98 -Originated -Reviewed w changes 08/29/03 -Reviewed w/o changes Cost Accounting -Author

Consistent Treatment of Costs

Audience

The information in this document is for use by all employees.

Definitions

Direct Costs: Costs that can be identified specifically with a particular sponsored project, and instructional activity, patient care activity, or any other institutional activity, or that can be assigned to such activities relatively easily with a high degree of accuracy. For a cost to be charged directly to an activity there must be a direct benefit to the activity. Indirect Costs: Costs that are ordinary and routine and incurred for common or joint objectives and cannot be readily and specifically identified with a specific activity. These costs are allocated to the direct activities through the use of the indirect cost rate. Consistent Treatment: Charging all costs incurred for the same purpose, in like circumstances, as either direct costs only or indirect costs only. Any cost charged as a direct cost to federal contracts must also be direct charged to other institutional activities. If a cost is identified as an indirect cost, it may be charged as a direct cost only in certain specific circumstances where the characteristics of the cost would unfairly burden the indirect costs. Direct costs that are allocated to sponsored projects or activities must be allocated using a reasonable method that is consistently followed. All departments must treat like costs in the same way.

Policy

This document provides the general guidelines for the consistent treatment of costs for all UTMB departments. This policy and the related procedures must follow the related procedures defined in the Office of Management and Budget (OMB) Circular A-21 entitled “Cost Principles for Educational Institutions.” More detailed explanations, procedures, and a listing of the major expense items can be found in the UTMB costing procedures at the following URL address. http://research.utmb.edu/osp/procedure_cost.shtm

Non-Federal Sponsored Agreements

All project-related costs may be direct charged to non-federal sponsored agreements if they have been approved by the awarding sponsor. Non-federal agreements have been determined to be unlike circumstances.

Federally-Sponsored Agreements

The following chart, not all inclusive, depicts activities/costs that might be charged to federally-sponsored agreements.

Indirect Activities/Costs that should generally not be charged directly to federally-sponsored agreements.

Activities and Costs that may be direct charged if the costs can be identified with a particular sponsored project and if approved by the awarding agency.

• General Departmental Administration -administrative and clerical -office supplies -postage -local telephone & telephone equipment -memberships • Contract and grant administration • Personnel activities • Accounting & budgeting activities • Filing • Processing vouchers • Routine travel planning • Routine data entry • Routine telephone answering • Newsletter/brochure preparation • Correcting and organizing data (non-project related) • Processing and tracking routing purchase orders • Maintaining databases

• Project salaries • Student salaries • Equipment • Insurance • Material costs • Allowable advertising costs • Long distance toll charges • Remodeling costs • Approved travel costs • Subscriptions • Administrative activities that are not routine in nature and that meet the expectations circumstances and criteria (listed in the costing procedures) • Project specific programming • Extensive data entry related specifically to a project • Extensive research data accumulation related specifically to a project • Extensive interviewing related specifically to a project • Conducting a telephone survey required specifically by a project • Creating and maintaining budgets beyond the routine that meet the exceptions circumstances and criteria (e.g., Program Project Grant or Center Grant) • Grant-related transcribing that is not routine in nature and that meets the expectations, circumstances and criteria • Writing manuscripts for publications related specifically to a project • Developing materials for publication or presentation related specifically to a project • Planning and organizing large conferences required by a specific project.