1. The following criteria must be used in determining the allowability of costs charged or allocated to grant or contract accounts.

   1. Reasonableness of costs - to determine reasonableness of a cost, consideration is given to:

      1. Whether the cost is ordinary and necessary to the performance of the contract or grant;
      2. Restraints or requirements imposed by factors such as sound business practice, arms-length bargaining, federal and state laws, and regulations and contract and grant conditions;
      3. The action that a prudent person would take in the circumstances; and
      4. The consistent treatment of costs as per established institutional policy.
          

   2. Allocability of costs - A cost is allocable if it:

      1. Is incurred specifically for the contract or grant;
      2. Benefits the contract or grant being charged;
      3. Is necessary to the overall operation of the project.
          

   3. Prior approval - Prior institutional or awarding agency approval has been obtained where required.

2. Using the above criteria, all supplies, and equipment received on or after the expiration of a grant or contract or expenses incurred after such date, are not considered to be allowable charges to the account because such charges do not benefit the grant or contract.

3. The following items of expenditures are generally not allowable:

   1. Advertising.
   2. Bad debts.
   3. Capital expenditures - For improvements to land, buildings and equipment, buildings and repairs which materially increase the value or life of equipment or buildings, unless provided for in the award documents.
   4. Contingency reserve.
   5. Entertainment costs - Amusement, social activities, entertainment and related costs such as meals, lodging, rentals, transportation and gratuities.
   6. Fines and penalties - Costs resulting from violations of, or failure to comply with, federal, state and local laws and regulations.
   7. Insurance and indemnification - Actual losses that could have been covered by permissible insurance.
   8. Revised OMB Circular A-21 allows certain interest charges, fund raising and investment management costs, but many are not allowable.
   9. Losses on grants and contracts - Any excess of costs over the awarded amount.
   10. Public information costs - News releases.
   11. Special administrative costs - general public relations activities, catalogs, alumni activities and similar activities.
   12. Travel costs - First class accommodations.
   13. Student aid charged to research projects.
        

4. Cost Accounting Standards - Certain costs (expenditures) are not allowed to be charged (under like circumstances) directly to grants per OMB A-21. Because of CAS 502, the University of Florida must monitor all Federal grants for compliance. This is done through monthly reports generated at Contracts & Grants Accounting Services (C&G) using detail data from myUFL (by account) and Payroll data (using occupation codes). This report, the CAS Targeted Expenditure Report, lists every possible CAS (502) violation by transaction and is distributed to the Departmental Chairs or their designees. Any grants that have asked for and received a CAS Exemption to allow direct charging of costs that normally would be indirect per A-21 are not included in the report.

   Departments are expected to assist the Principal Investigator in requesting a CAS Exemption from the Division of Sponsored Research (DSR) if applicable or assist the PI in removing the charges from the federal sponsored project. All CAS violations are to be corrected as soon as possible but no later than prior to the end of the grant.

   Departments can receive assistance in correcting possible CAS (502) violations by going to the following web sites:

   http://fa.ufl.edu/cg/capolicy/ or
   http://fa.ufl.edu/cg/training/section06/references.html

   Both of these web sites provide links to information on institutional cost accounting policies, listings of object codes and occupation codes that are affected and links to the CAS Exemption form.

5. Cost transfers - Transfers of costs, which represent corrections of errors, must be made promptly after the error is discovered but not later than the lesser of 120 days after the original charge or 45 days after the end of the grant unless terms of the grant are more stringent.

6. Cost-sharing - An award may require that the University share in the cost of a project. The cost participation will be met by each individual project.

   1. It is the PI's responsibility to ensure the cost sharing requirement is met in a timely manner consistent with the terms of the agreement.
   2. The Division of Sponsored Research (DSR) sends the Principal Investigator (PI) and the department administrator an electronic Notification of Award (NOA) for all new awards.
   3. When the NOA is received by Contracts and Grants Accounting Services (C&G), an analysis is made to determine the following information about cost-sharing:
      1. Amount of cost-sharing required
      2. Form of cost-sharing (salary, OCO, expense, third-party and/or indirect cost)
          
   4. A completed and signed copy of the Cost Sharing Certification form must be returned to C&G to signify acceptance by the PI of this responsibility and to provide the chartfield information of the PeopleSoft cost center that will provide the cost sharing.

   5. At the end of each academic term, when effort reporting is closed and salary cost sharing has been loaded into the cost sharing system, a notification is sent to all departmental fiscal staff with projects listing cost sharing balances that need to be met. Cost sharing reports by department and by project, summarizing the cost-sharing transactions from inception of the project up to the end of the academic term covered by the report, are available through myUFL. Navigation is: Grants > Review > Cost Sharing Reports.

   6. Cost sharing used to satisfy mandatory or voluntary-committed cost sharing requirements must meet the same restrictions, regulations and/or guidelines of the award for which it is provided, including Cost Accounting Standards (CAS). Any cost restricted by the award may not be used as cost sharing to the award without agency approval. Costs must come from unrestricted funds. Except for projects specifically established by the University to provide matching funds for a grant or other sponsored project, cost sharing may only be provided from projects in Fund 201 (federal) or Fund 209 (non-federal) with the permission of both granting agencies involved.

   7. Cost sharing must meet the following tests:

      1. Reasonable-is this contribution reasonable based on the nature of the work being done?
      2. Allowable-does this contribution meet the terms of the agreement, the cost principles contained in OMB circular A-21, and the Cost Accounting Standards for a federal award?
      3. Allocable-can the contribution be allocated to the sponsored project in proportion to its benefit?
          

   8. If you have cost sharing that must be documented by your C&G office, the supporting documentation must include the following signed certification:

      "This is to certify a cost sharing contribution in the amount of $__________to project #__________. This cost has not been used as cost sharing for any other project."

   9. This certification must be signed by an employee in the department deemed appropriate by the C&G offices. The supporting documentation required for cost sharing is briefly described in its relevant expense category below.

   10. Personnel Costs:

       1. The normal and preferred method of documenting personnel costs is through the semester Academic/Professional and Non-Academic Effort Tracking System. If this didn't occur properly (e.g., a change is required because of a retro salary transaction that is processed after the close of an effort tracking term), then a manual cost sharing entry is required. The department should submit to the appropriate C&G office a copy of the relevant Final Activities Report from the Effort Tracking System showing the employee name, UFID # and the chartfield string of the department contributing the cost sharing, or a screen print of the employee's record from the effort tracking system for the closed term.
       2. The Final Activity Report may be accessed via the following navigation: Enterprise Reporting > Access Reporting > (Click Accept to proceed) > Human Resources Information > Workforce Information > Final Activities Report.
       3. The employee's individual record may be accessed via the following navigation: Effort Tracking > Effort Tracking > Effort Tracking > enter, or select from the drop-down selections, the desired term and employee ID > click "Search" or depress the enter key.
       4. The submitted documentation should be annotated to include the Effort % the amount to be cost shared, and the chartfield string to which the cost sharing is being designated.
           

   11. Non-Personnel Expenses: Provide a copy of the invoice and voucher number for the expenditure indicating the amount to be cost shared and including the required signed certification. Submit this documentation to your Grants Specialist for review and processing.

   12. Equipment: Provide a copy of the invoice and voucher number indicating the amount to be cost shared, the UF property decal number, and the percentage use of the equipment by the sponsored project during the life of the project. Include the required signed certification, and submit this documentation to your Grants Specialist for review and processing.

   13. Matching Projects: When UFRF, UFF, or DSR provides funding for a separate project specifically to provide cost sharing for another project, please provide the project number to the appropriate C&G office. No other documentation is required. Departments should maintain adequate documentation for the retention period of the project that requires the cost sharing.

   14. Unrecovered Facilities and Administrative (F&A) Costs: Unrecovered F&A (the difference between the University's F&A rate and the F&A rate allowed by the Agency on a given award) may be used as cost sharing if approved by the granting agency. A copy of the documentation approving the use of unrecovered F&A should be forwarded to the appropriate C&G office. No other documentation is required.

   15. Donations: Requests for the manual input of donations to be used as Cost Sharing must be documented with a letter or memorandum from the contributing agency on agency letterhead, stating the amount of cost sharing that has been provided (not will be provided) and should be signed by an officer of the contributing agency. Contributions must be within the life of the grant and satisfy grant requirements. Exceptions to agency letterhead will be considered when necessary.

   16. Please contact your C&G office if you have any questions.

   1. Contracts and Grants (Main Office) 302 TIGERT HALL
      PO BOX 113001
      GAINESVILLE, FL 32611-3001
      392-1235
      
   2. IFAS Sponsored Programs
      G022 McCarty Hall D
      PO BOX 110110
      GAINESVILLE, FL 32611-0110
      392-2356
      
   3. Engineering Contracts and Grants
      340 WEIL
      PO BOX 116550
      GAINESVILLE, FL 32611-6550
      392-6626
       

7. Expense Advance - Expense advances may be authorized for projects conducted at a site remote from the University. A remote site is interpreted to mean that it is far enough removed from the University to render normal purchasing and payroll functions ineffective. The fact that a portion of the project is to be performed at a remote site must be clearly identifiable in the grant or contract.

   The expense advance is to pay for incidental labor and research materials and services. It does not cover travel expenses to and from the university and should not be confused with a travel advance. The procedures are as follows:

   1. The Principal Investigator/researcher prepares a University of Florida Transaction Authorization (Form FA-PDS-TA) for the amount required and attaches a completed agreement and a Power of Attorney. The agreement must be stamped and signed by C&G before approval by the President or his designee.
   2. The above documents are returned to C&G for verification of information and allowability to incur expenses in accordance with the award terms and conditions.
   3. If acceptable, C&G approves the documents and submits them for payment. Copies of the Agreement and Power of Attorney must be attached. Originals of these documents, however, are retained by C&G.
   4. C&G sends a memorandum to the researcher defining the PI's responsibilities in handling the expense advance.
   5. When the researcher receives the check, he/she sends a receipted copy of the agreement to C&G.
   6. As soon as the researcher returns from the remote location, a financial accounting of the advance must be rendered to C&G. Any unexpended or unaccounted balance must be returned with the summary of expenditures.
   7. C&G verifies acceptability of the documentation and allowability of expenditures and prepares the appropriate accounting entry.
   8. All expense advance funds are subject to periodic, unannounced audits by the Office of Audit & Compliance Review (a.k.a. Office of Inspector General).
   9. Full accountability must be made before the Power of Attorney expires, or, a new Power of Attorney must be executed.