I am not sure what your VP means by "cost accounting," but that term usually
refers to the type of accounting used in commercial operations, i.e. cost of
goods sold, gross profit, net profit, changes in equity, etc. The Federal
requirements are fund accounting oriented. GASB versus FASB. They expect
your costs to be "reasonable, necessary, and allocable," allocable being
the operative word for your question. Allocable = specifically identifiable
as an expense by that grant activity and that grant activity alone.
-----Original Message-----
From: xxxxxx@SBLHS.ORG [mailto:xxxxxx@SBLHS.ORG]
Sent: Wednesday, August 22, 2001 6:36 AM
To: xxxxxx@HRINET.ORG
Subject: [RESADM-L] grant accounting
Hi, all --
The finance VP at my organization has asked me a very basic grant accounting
question, and my forte is not in post-award issues, so I'm asking you all
for help. We are a not-for-profit health care center (not university
affiliated, not presently conducting any grant-funded research projects,
though we do have federal grant expenditures which approach/exceed $300K
annually -- we are apparently right on the bubble until we can make a
determination about some of the state flow-through awards). We have not
(yet) negotiated a federal indirect cost rate, but we are researching that
issue.
Here is the VP's question:
Are awardees of federal grants required to operate cost accounting systems
to demonstrate that even direct costs are providing identifiable benefit to
work for which a particular grant is awarded? I ask because both A-21 and
45 CFR 74 App. E, in "Basic Considerations," specify that even direct costs
must be identified by "conforming to generally accepted cost accounting
practices consistently followed by the institution."
-----------------
Molly Daniel
Grants Specialist
Planning Dept.
Sarah Bush Lincoln Health Center
1000 Health Center Drive
Mattoon, IL 61938-0372
tel. 217-258-2195
fax 217-258-4135
email: xxxxxx@sblhs.org <mailto:xxxxxx@sblhs.org>
web: www.sarahbush.org <http://www.sarahbush.org>
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