Guideline Date: September 2017 Revision: 1 Last Review: August 2017
The University and its principal investigators are jointly responsible for stewardship of sponsored project funds in compliance with federal cost principles established by the Office of Management and Budget in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
Adherence to all cost principles is required to properly and appropriately account for the expenses of conducting sponsored projects at the University. The consequences of failing to comply with cost principles can range from disallowance of specific incurred costs to termination of the award to federal sanctions depending on the particular cost and circumstances in question.
The key concept of cost principles is "allowability." For a cost to be allowable on a sponsored project, it must meet all three of the following criteria:
- Reasonable. It is necessary for the performance of the project, and the cost is what a "prudent person" would pay for the particular goods or services obtained.
- Allocable. The project that pays the cost is the project that benefits from it. Expenses shared across multiple projects benefit all projects proportionately when benefit can be clearly allocated or reasonably allocated when proportionate value cannot be readily determined due to the inter-relationship of the work involved.
- Consistently treated. The University consistently designates that type of cost as either direct or indirect when incurred for the same purpose in like circumstances.
Additionally, the cost must not be explicitly excluded by federal guidelines or the terms and conditions of the award. Some expenses that directly benefit a project may be prohibited by the award sponsor and, thus, are not allowable on the award.
Federal, state and local agencies as well as private sponsors have the right to perform financial and administrative reviews of their awards made to the University. The post-award manager in Sponsored Projects facilitates and supports external audit activities by performing the following duties:
- Acting as a liaison, the main point of contact, for both the campus and the external auditors
- Managing and coordinating financial and administrative information and date requests
- Assisting in resolving questions and issues.Reporting outside audit activities to campus leadership
- Following up on agreed-upon corrective actions
If contacted by an external agency or sponsor with an audit request, contact the Sponsored Projects post-award manager.
Who to Contact
- (775) 784-4040
- (775) 784-6680 Fax