"Consistency" is relative.  Sponsors have varying requirements and
allowabilities.  That said:

A-21 requires consistency for all federal allowable costs.  One primary
consistency is treatment of what costs are direct and what are indirect, in
your institution -- there are differences between institutions, though not
major ones (but something to remember if you change institutions).  Another
is in how to measure % effort.  There are other direct references to
consistency throughout A-21, but these are the biggest.  One other is
consistency over time: A-21 requires a new DS-2 for a "major" change in
accounting practice.  What is major is up for grabs, but there should be a
good reason for any change, and once made, stick to it.  And institutional
should be documented!  (Your DS-2 covers most of this.)

Beyond that, there is not a lot of written requirement for
consistency.  However, most major non-profit fundors require or accept A-21
standards.  So starting with A-21 and treating required/allowed exceptions
on a documented exception basis is both safe and easy.

The federal negotiation of F&A rate definitely excludes some real indirect
costs.  If an institution does enough business with industry, it might
develop, document, and consistently require a higher rate for those
sponsors, but I would advise using your A-21 standards for direct costs
except in exceptional cases where an industry might allow as direct
something the feds would not -- and then be sure that exception cannot
erroneously get into your fed F&A computation.

There is general wisdom that the feds expect to get the "most favored
nation" cost, i.e., no one gets a lower cost.  I hope one of our eagle-eyed
readers out there can provide a reference!

As a practical matter, you cannot run a university sponsored program
accounting system with different standards for different sponsors unless
you do it on an exception based system, with few exceptions.  There are
just too many people who are involved in dealing with cost matters to train
them on more than one basic standard!  Training and policing would cost
more than you would gain by having several differing standards of
allowability.  And, because federal awards are a university's sponsored
programs bread and butter, A-21 is the best basic standard.

Beyond these principles, I can think of interesting situations.  For
example, A-21 accepts the institution's standard way of doing things.  So
when a state institution is required by state law/regulation to change
things -- differing employee benefits every time the legislature gets a
strange notion, or different travel regulations every time a politician
decides to "clean up wasteful state spending" -- the rules change, in
detail.  But the change is consistent in its own way: it applies to
everything in the institution from a given date forward.

Consistency IS relative -- but it is easiest and cheapest in the long run.

Chuck

At 11:42 AM 8/12/2004, you wrote:
>Can anyone speak to the need (requirement) for the consistent treatment of
>grants, regardless the source of funding, particularly when it comes to
>allowable costs?  What happens when inconsistency occurs?  Policy
>references and examples would be helpful.
>
>Deborah Lundin
>Grant Proposal Specialist
>Division of Sponsored Programs
>Eastern Kentucky University
>521 Lancaster Avenue
>Richmond, KY 40475
>859.622.3636 phone
>
>
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Herbert B. Chermside, CRA
Special Asst. to VP-Research
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Voice:  804-827-6036
Fax     804-828-2051
e-mail xxxxxx@vcu.edu

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