- All applicable Federal Office of Management and Budget
(OMB) Circulars.
- Rules and regulations of the granting agency.
- Guidelines established by the National Association of
College and University Business Officers (NACUBO).
- State and UW System policies and procedures.
- State Statutes.
- Regent resolutions.
FEDERAL GUIDELINES:
Office of Management and Budget (OMB) Circulars
Federal OMB Circulars provide the overall guidance for
use of Federal funds. It is expected that all recipients
of Federal funds will comply with the terms and conditions
of the appropriate Circulars in all circumstances.
- OMB Circular A-21 “Cost Principles for Educational
Institutions” (05/2004) sections C.1-C.4 establish
basic cost considerations which include the concepts of
allowability, allocability, and reasonableness.
- A-21, C.4.b, which is of particular importance, states:
“Any costs allocable to a particular sponsored agreement
under the standards provided in this Circular may not be
shifted to other sponsored agreements in order to meet deficiencies
caused by overruns or other fund considerations, to avoid
restrictions imposed by law or by terms of the sponsored
agreement, or for other reasons of convenience.”
- OMB Circular A-110 “Uniform Administrative Requirements
for Grants and Other Agreements with Institutions of Higher
Education, Hospitals and Other Non-Profit Organizations”
(09/1999) subpart D.71 (b) states: “Unless the Federal
awarding agency authorizes an extension, a recipient shall
liquidate all obligations incurred under the award not later
than 90 calendar days after the funding period or the date
of completion as specified in the terms and conditions of
the award or in agency implementing instructions.”
- OMB Circular A-133 “Audits of States, Local Governments,
and Non-Profit Organizations” section E.500 stipulates
that each fiscal year an annual audit be conducted to “determine
whether the auditee has complied with laws, regulations,
and the provisions of contracts or grant agreements.”
An annual Compliance Supplement is issued with a matrix
of compliance requirements for grants from each federal
agency providing auditors specific instructions for reviewing
auditee’s internal control systems as well as adherence
to allowable cost guidelines and principles.
Policies of Federal Granting Agencies:
The NIH Grants Policy Statement (NIHGPS) (Rev. 12/03)
pages 83-84, suggests:
"Cost transfers to NIH grants by grantees…should
be accomplished within 90 days…. The transfers must
be supported by documentation that fully explains how the
error occurred and a certification of the correctness of
the new charge by a responsible organizational official
of the grantee…merely stating that the transfer was
made "to correct error" or "to transfer to
correct project" is not sufficient. Transfers of costs
from one project to another or from one competitive segment
to the next solely to cover cost overruns are not allowable.
Grantees must maintain documentation of cost transfers,
pursuant to 45 CFR 74.53 or 92.42, and must make it available
for audit or other review…. Frequent errors in recording
costs may indicate the need for accounting system improvements,
enhanced internal controls, or both. If such errors occur,
grantees are encouraged to evaluate the need for improvements
and to make whatever improvements are deemed necessary to
prevent reoccurrence. NIH also may require a grantee to
take corrective action by imposing additional terms and
conditions on an award(s)."
As Non-NIH agency guidelines may differ, please check individual
agency policy for the allowability of Cost Transfers.
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