Contracts and Grants Accounting Cost Share: Procedures and Challenges
Cost sharing in contracts and grants accounting involves committing designated costs to be covered by the University, not the sponsor. Effective July 1, 2014, new procedures were implemented to address challenges such as inconsistent processes, lack of tracking methods, and insufficient monitoring of commitments. The process includes defining budget allocations based on award commitments, submitting budgets to CGA, and managing transactions through proper coding and monitoring throughout the award period.
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Contracts and Grants Accounting Cost Share: Budgeting, Spending and Reporting Procedures Effective July 1, 2014 C&G Training Presentation May 21, 2014
Cost Share Commitment Cost sharing committed on a award means designated costs are covered by the University, not by the sponsor. Commitment may include salaries, equipment/supply purchases, waived F&A, etc., as defined in the award documentation and allowable Cost sharing can be funded by donations/gifts, in-kind contributions, start-up or retention funds, or non-federally sponsored funding source (provided it has been approved) Once a cost sharing commitment is made, cost share becomes mandatory and the University is required to measure, track, report on, and meet that commitment. UCOP requires a centralized tracking system to capture committed cost sharing amounts New C&G functionality facilitates the identification of cost share transactions throughout the life of the award 2
Effective July 1, 2014 Current Challenges System and Process to Address Challenges Inconsistent processes across campus for meeting, reporting on cost share commitments New procedures for budget set up, coding and monitoring spending, and closeout/final report CGA knows only the $ amount of the commitment, not how the department plans to fund that commitment PI s plan when committing cost sharing $ in the proposal will be used by the RA to create a cost share budget; provide budget to CGA at set-up Lack of consistent tracking method (which can result in a single expense being used to meet cost sharing commitments on multiple awards) Each award has a unique cost share CF1 value that is used on all transactions, including salary and F&A (overhead rate auto-calculated, applied) Lack of a consistent recording methodology means there is no way to produce a cross- campus cost share report Project Costing module in BFS captures all cost sharing transactions (including those not in BAIRS reports) using analysis type and PC ChartFields Cost sharing treated as an afterthought at the end of the award -- no method to ensure commitment is monitored/met during award Initial budget establishes how commitment will be met, coding expenses as they are incurred identifies cost sharing transactions in GL 3
Cost Sharing Process Summary AWARD SET UP Define budget allocations, amounts based on commitments made in award docs Submit budget to CGA using new CF1 in ChartStrings (within 48 hours of NOA) Transfer budgeted allocations via 7xxxx transfer, use the CF1 Request ongoing payroll costs (or percentage of payroll costs) be coded with the cost share CF1 ChartString MANAGING TRANSACTIONS THROUGHOUT AWARD Code cost shared expenses, purchases using CF1 Throughout the life of the award, department monitors spending against the budget If budget revision required, submit one to CGA using budget submission process CLOSE OUT REPORT Submit Cost Share Contribution Report and supporting documentation to C&G along with Closeout Certification (within 70 days of award expiration) CGA analyst does a final review to ensure that cost share commitments have been met, prepares final report for Sponsor as required, CGA certifies the final report 4
Award Setup Timeline Award Setup Process Day 4 Day 0 Day 2 Day 3 Spending Authorized (email from CGA) Validate Budget, setup award Notice of Award Email from SPO Submit Complete Budget 2 Days 2 Days At NOA, the CSS-RA/Department has 2 days to submit complete budget information, including cost sharing, to CGA. When the budget is received, CGA has 2 days to verify accuracy and completeness, setup the award in BFS, then notify CSS-RA/Department. If the submitted budget is inaccurate or noncompliant, the award setup will be delayed. 5
Budget at Award Set up NOA alerts CGA that a new award has cost sharing, and the total committed amount. CGA will create a specific CF1 value in BFS to use on cost share transactions (CF1 associates these transactions with the award). A CF1 value in the 20000-29999 range identifies transactions as cost share when used in a ChartString with a non-grant fund* RA/Department creates the award budget, determining BUDSUM categories (for personnel effort, equipment, travel, unrecovered IDC, etc.) as well as specific $ amounts that meet the cost share commitment defined in NOA Look up the new CF1 in BFS (use the SPO award number) to use in Cost Share rows in award budget, due to CGA within 48 hours of the NOA Each Cost Share row has a F&A row in the budget Once the award is activated, unit providing the cost share transfers designated budget in BFS using 7xxxx Unit providing the cost share requests recharge units and payroll use cost share ChartString with CF1 retention fund, using a CF1 from the 2 range in combination with that fund trumps the Management Code 3 series CF1 requirement. *When the fund source for cost sharing is a faculty start-up or 6
Example Budget at Award Set up The NOA from SPO includes this Cost Sharing Commitment for one fiscal year: College of Engineering $75,000 VC Research Other University funds $45,000 ($22.5 from EECS + $22.5 from Chem E) $195,000 total cost share commitment (DIR+IDC) $75,000 The budget has a row for each direct cost and associated indirect cost. Using the CF1 provided by CGA in each ChartString identifies the row as Cost CGA will create the PC ChartFields for each ChartString during the award set up process. Select the expense category that reflects the award s spending plan (salary, supplies, etc.) Transaction Type Account sharing. Account Description Fund BUDSUM General Supplies BUDSUM Indirect Cost Recovery BUDSUM General Supplies BUDSUM Indirect Cost Recovery BUDSUM General Supplies BUDSUM Indirect Cost Recovery BUDSUM General Supplies BUDSUM Indirect Cost Recovery Dept Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Prg Cd CF1 CF2 Amount PC BU Project Activity Analysis Type 55000 COE fund 44 200241 -50,000 GM100 1000004 01 CBU Budget - COE 57900 COE fund 80 200241 -25,000 GM100 1000004 01 CBU Budget 55000 VCRA: 69749 44 200241 -50,000 GM100 1000004 01 CBU Budget - VCRA 57900 VCRA: 69749 80 200241 -25,000 GM100 1000004 01 CBU Budget 55000 U Fund - EECS 44 200241 EHSIS -15,000 GM100 1000005 01 CBU Budget -University 57900 U Fund - EECS 80 200241 EHSIS -7,500 GM100 1000005 01 CBU Budget 55000 U Fund Chem E 44 200241 EEXXX -15,000 GM100 1000006 01 CBU Budget -University 57900 U Fund Chem E 80 200241 EEXXX -7,500 GM100 1000006 01 CBU Budget Here, Prof. X from Chem E plans to use his endowment funds for Cost Sharing. Using Prof. X s CF2 in the ChartString means he will see this in PI Portfolio. 8
Coding Direct Costs along with related indirect costs When budgeting, create a cost share line for each expense category of direct costs (faculty and staff salary and related fringe benefits, equipment, travel, etc.) as well as a line for related indirect costs IF the fund used is a faculty- managed fund, use that person s CF2 Use the cost-share CF1 created for this award Use a non- grant fund Transaction Type Account Account Description Fund BUDSUM General Supplies BUDSUM Indirect Cost Recovery Dept Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Dept Providing cost share Dept Providing cost share Prg Cd CF1 CF2 Amount PC BU Project Activity Analysis Type 55000 Gift Fund 44 200241 EHSIS -10,000 GM100 1000004 01 CBU Budget 57900 Gift Fund 80 200241 EHSIS -5,000 GM100 1000004 01 CBU Budget 55040 General Supplies Gift Fund 44 200241 EHSIS 6,000 GM100 1000004 01 CAC Actual Spending Indirect Cost Recover-C&G 57990 Gift Fund 80 200241 EHSIS 3,000 GM100 1000004 01 CFA Actual Spending 55040 General Supplies Gift Fund 44 200241 EHSIS 4,000 GM100 1000004 01 CAC Actual Spending Indirect Cost Recovery C&G 57990 Gift Fund 80 200241 EHSIS 2,000 GM100 1000004 01 CFA Actual Spending When spending, use the award s cost share CF1 in the chartstring. Indirect costs will be automatically calculated at the appropriate rate for each cost- shared direct expense as it is incurred (shaded rows above) 9
Coding Cost Shared Effort Cost shared effort (even if included without a dollar value in the award docs) needs to be tracked in BFS. At award set up, request HR allocate the appropriate % of salary* to the cost-share chartstring/ CF1 Indirect costs will be automatically calculated at the appropriate rate as salary expense is incurred (shaded row below) Transaction Type Account Account Description BUDSUM Academic Salaries BUDSUM Indirect Cost Recovery Fund Dept Prg Cd CF1 CF2 Amount PC BU Project Activity Analysis Type Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share 50000 19900 44 200241 EHSIS -10,000 GM100 1000004 01 CBU Budget 57900 19900 80 200241 EHSIS -5,000 GM100 1000004 01 CBU Budget 50210 Faculty 19900 44 200241 EHSIS 10,000 GM100 1000004 01 CPY Actual Spending Indirect Cost Recover-C&G 57990 19900 80 200241 EHSIS 5,000 GM100 1000004 01 CFA Actual Spending In ERS, cost-sharing salary transactions (coded with a CF1) are NOT automatically shown above the line in the cost share column. RA/Effort Coordinator must manually adjust Effort Report to reflect appropriate percentage of cost share effort on an award, i.e., move the % above the line *Note: if the employee whose salary will be cost shared is NOT already in the ERS system (i.e., not paid from a federal fund) Payroll will need to add that person to the ERS system. 10
Coding Waived F&A Waived Indirect (F&A) cost sharing occurs any time the Sponsor and University agree to recover less than the federally negotiated indirect cost rate. If the rate is lower than the current negotiated federal rate and the sponsor has no alternative agreement/policy, approval from UCOP is required The overhead rate that CGA sets up in the system automatically splits Transaction Type Account F&A on expense transactions into the cost shared portion and the waived portion. Account Description Fund BUDSUM General Supplies BUDSUM Indirect Cost Recovery Dept Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Dept providing cost share Prg Cd CF1 CF2 Amount PC BU Project Activity Analysis Type 55000 Gift Fund 44 200241 EHSIS -10,000 GM100 1000004 01 CBU Budget 57900 Gift Fund 80 200241 EHSIS -5,000 GM100 1000004 01 CBU Budget 55040 General Supplies Gift Fund 44 200241 EHSIS 10,000 GM100 1000004 01 CAC Actual Spending Indirect Cost Recover-C&G Indirect Cost Recover-C&G 57990 Gift Fund 80 200241 EHSIS 3,000 GM100 1000004 01 CFA Actual Spending Waived F&A on Actual Spending* 57990 Gift Fund 80 200241 EHSIS 2,000 GM100 1000004 01 WFA At closeout, both the cost shared F&A (pink line) and the waived F&A (green line) are reported to the sponsor, depending on the sponsor s requirements * Waived F&A on Actual Spending is only recorded in the BFS project costing module. It is not available in the GL and therefore not currently availably on BAIRS reports. 11
Coding In-Kind Cost Share In-kind contributions represent the value of non-cash contributions (equipment, services) that are a benefit to or are used for award activities. If in-kind contributions are committed as cost share, they must be included in the cost share budget, recorded in BFS, and included on the final report Sponsor terms determine if F&A is charged on in-kind contributions Transaction Type Account Account Description Fund BUDSUM Computer Equip Inventor Computer Equipment =>5k Indirect Cost Recovery (per sponsor terms) Dept Dept providing cost share Dept providing cost share Dept providing cost share Prg Cd CF1 CF2 Amount PC BU Project Activity Analysis Type 54100 Donations 44 200241 EHSIS -10,000 GM100 1000004 01 CBU Budget 54110 Donations 44 200241 EHSIS 10,000 GM100 1000004 01 CTP Actual Spending Donations 80 200241 EHSIS GM100 1000004 01 CFA 57990 Actual Spending Spending in-kind contributions in BFS ensures these assets are used only once and only for one award. Use the award s specific cost share CF1 in the chartstring to ensure in-kind costs are documented on the Cost Sharing Contribution Report for the sponsor. 12
Spending, Monitoring, and Budget Revisions Department periodically reviews expenses to see that Cost Share transactions meet award commitment cost share transactions are identified by having a non-grant fund* and a cost share CF1 Department will NOT see cost share F&A or 3rd party on BAIRS report Periodic Cost Share reports, when required, are generated by RA and CGA and sent to the sponsor along with the invoice To revise cost sharing allocations, submit a revised (net 0) budget to CGA * A very rare exception is Matching Program Income, which allows income earned on a grant to be used for cost sharing. 13
Reporting at Award Close Continue to use the existing Cost Sharing Contribution Report (until such time as a new report is available) Submit a copy of in-kind contribution documentation Submit Contribution Report along with the Closeout Certification form (due within 70 days of award expiration) 14
Contracts & Grants Implementation Project http://controller.berkeley.edu/departments/ contracts-grants-accounting contractsgrants@berkeley.edu 15
Cost Share Analysis Types Type Code Description Salaries and Benefits CFR CPY Cost Share Fringe Cost Share Payroll Budget CBA CBU Cost Share Budget Adjustment Cost Sharing Budget Commitments CAJ CCO CCR Commitment Adjustment Cost Sharing Commitment Commitment Reversal Other CAC CFA CGE Cost Sharing Actuals Cost Sharing F&A Cost Sharing GL Expense Waived F&A WFA Waived F&A (third party cost share) (award to award cost share) CTP CAA Third Party Cost Share Award to Award Cost Share 16
