1.10 Description of Cost Accounting System
The University of Connecticut has a financial accounting system based on fund accounting. Expenses charge to Federally sponsored agreements are charged in the following ways:
Direct costs are charged on a cash basis, however in determining the final costs for sponsored agreement reporting purposes, all costs that were incurred during the sponsored agreement period but not paid are accrued.
Indirect Cost and Fringe Benefit Rates
Indirect cost rates are based on the University's annual financial statements which include normal accruals for salaries, fringe benefits, and accounts payable. However, for indirect cost rate development purposes, accruals, adjustments, and reclassifications are removed from the study to provide comparable cost data, to cost data used in preparing pervious indirect cost studies. Indirect costs are accumulated and allocated as described in Part III of this document and are negotiated and approved by the Department of Health and Human Services, the University's cognizant agency.
Fringe benefits are charged to sponsored agreements based on rates negotiated by the State of Connecticut with DHHS, (except worker's compensation rates as discussed in 6.4.1). The rates are a percentage of salaries paid. Fringe Benefits are recorded in the accounting system when the salary charge is made.
1.2.0 Integration of Cost Accounting with Financial Accounting
Direct costs charged to sponsored agreements are fully integrated with the University's financial accounting system.
The amounts included in the University's indirect cost pools are based on cost information generated by the financial accounting system. The data obtained from the financial accounting system and financial statements is adjusted and reclassified into the cost pools and bases required by Circular A-21. The specific adjustments and reclassifications are listed and described in schedules included in the University's indirect cost proposal. Also, as discussed in 3.1.0, depreciation, interest, state central service costs and some of the costs in the departmental administration pool, are not accumulated by the formal accounting system and must therefore be accumulated through cost finding techniques or other calculations. The allocation of indirect costs and development of indirect cost rates are also accomplished through cost finding procedures which are not part of the formal accounting system.
Unallowable costs, as defined in OMB Circular A-21, must be charged to specific accounts or object codes in the financial accounting system. The costs recorded in these accounts or object codes are excluded from the direct and indirect costs charged to sponsored agreements. Additionally, costs incurred by organizational units whose overall activities are unallowable (e.g., University Development, Alumni Relations, etc.) are identified within the financial accounting system at the department or account level and removed from the indirect cost pools allocated to sponsored agreements. Reviews to assure compliance with these policies are made initially at the department level, then by the offices of Sponsored Programs, Costs Analysis, and Internal Audit.
1.3.1 Treatment of Unallowable Costs
Unallowable costs are excluded from charges to Federally sponsored agreements. Unallowable directly associated costs as defined in CAS 505 will also be excluded from charges to Federally sponsored agreements.
As required by CAS 505, where unallowable costs would normally be part of a regular indirect cost allocation base, they remain in that base. This is accomplished by classifying unallowable costs as "Other Institutional Activities" and allocating indirect costs to these activities as part of the normal indirect cost allocation process. The classification of unallowable activities as Other Institutional Activities is required by section B.1.d. of Circular A-21. In the interest of consistency, the University has elected to treat all unallowable costs in this manner if the unallowable costs are the types of costs that would be included in the Modified Total Direct Cost (MTDC) base specified in section G.2. of Circular A-21. An exception to this treatment is made for cost overruns and other unallowable direct costs of sponsored agreements. These costs remain in the same direct cost base as the sponsored agreement if they are the types of costs that would be included in the MTDC base required by Circular A-21.
1.5.0 State Laws and Regulations
State laws and regulations affect the University's capitalization policy stated in section 4.4.0.
The fringe benefits rates used by the University are rates negotiated by the State of Connecticut with the Department of Health and Human Services, except for worker's compensation costs. Workers compensation rates are calculated by the University of Connecticut and added to the State of Connecticut fringe benefit rates. See Section 6.4.1 for additional information.
2.1.0 Criteria for Determining How Costs are Charged to Federally Sponsored Agreements or Similar Cost Objectives
The University follows the general guidelines in sections D. and E. of Circular A-21 in determining the treatment of costs as direct or indirect. Accordingly, costs that can be identified specifically with a particular sponsored project, instructional activity, or other institutional activity, or can be directly assigned to such activities relatively easily with a high degree of accuracy, are treated as direct costs. Conversely, costs incurred for common or joint objectives which cannot be identified readily and specifically with a particular sponsored project, instructional activity or other institutional activity, are treated as indirect costs. The University's indirect costs are consistent with the definitions of specific indirect cost categories in section F. of Circular A-21.
The University also follows the guidelines in section F.6.b. of Circular A-21 which specify the normal treatment of certain costs commonly incurred by academic departments and organized research units.
Every effort is made to classify costs incurred for the same purpose, in like circumstances, consistently as either direct or indirect costs. As cited later in this section, specific policies have been established by the University to help accomplish this objective. All sponsored agreement proposals are reviewed by the Office of Sponsored Programs for consistent treatment of costs in budgets.
Within academic departments and organized research units, major cost categories are treated as follows:
Salaries and fringe benefits of faculty, research associates, technicians, graduate students and the other types of personnel listed in 2.4.0. associated with effort on research projects, instructional activities and other direct cost objectives, are treated as direct costs. Salaries and fringe benefits of faculty and professional staff associated with administrative activities are treated as indirect costs.
Salaries and fringe benefits of administrative and clerical staff are normally treated as indirect costs, as required by section F.6.b. of Circular A-21. However, in accordance with supplementary guidance on this subject issued by OMB, these costs are treated as direct costs when the nature of the work performed under a particular project requires an extensive amount of administrative or clerical support and the costs meet general criteria for direct charging in circular A-21 (i.e., can be identified specifically with the project). These situations are considered "unlike circumstances" under CAS 502. The University has established specific policies on this subject in Policy Statement No. CADS-1 which parallel the supplementary OMB guidance. Policy Statement No. CADS-1 was issued on June 19, 1998 and is effective on July 1, 1998.
The cost of laboratory supplies, (e.g., chemicals, glassware, etc.), instructional supplies, animals, animal care and other specialized services, travel, consulting services, long distance telephone toll charges and the other items enumerated in 2.2.0 and 2.7.0 identifiable to research, instruction, or other direct cost objectives are treated as direct costs.
Rent and other facility costs of off-campus facilities used to conduct research or other direct cost objectives are also treated as direct costs.
The costs of office supplies, postage, local (basic) telephone costs, and memberships in business, professional, and technical organizations are treated as indirect costs, except under the conditions specified in Policy Statement CADS-1, which the University considers "unlike circumstances" under CAS 502.
As indicated above, the University's policy permits direct charges for administrative and clerical salaries, office supplies, postage, local telephone expenses, and memberships only under exceptional circumstances consistent with section F.6.b. of Circular A-21 and supplemental guidance issued by OMB. In implementing these policies, the University relies on the judgment of principal investigators and other responsible officials to determine whether these circumstances exist for a particular project, and requires that proposed direct charges for these costs be fully justified to sponsoring agencies in grant applications and contract proposals. If the sponsoring agency accepts the cost as part of the direct project budget (i.e., does not specifically disapprove the item in the award or other notification to the University), then the University will consider the cost an appropriate direct cost of the project. On the other hand, if the sponsoring agency specifically disapproved the cost, the University will rely on the sponsoring agency's judgment that the cost did not meet the criteria for direct charging and will treat the cost as an indirect cost, unless circumstances arise at a later date justify direct charging of the costs.
Cost normally treated as indirect, such as administrative and clerical salaries, are charged directly to non-federal sponsored agreements if permitted by the sponsor. Since these costs would have otherwise been included in the indirect costs allocable to Federally sponsored agreements, this practice reduces the costs of Federal programs.
Two mechanisms are used to ensure consistent treatment of costs between sponsored agreements and non-sponsored activities within academic departments. Salaries and fringe benefits of departmental support staff are distributed to sponsored agreements, instruction, other non-sponsored direct cost objectives, and the Department Administration indirect cost pool based on the University's salary distribution system described in 2.5.0 and 2.5.2. For non-labor costs, such as travel, telephone expenses, etc., "Direct Charge Equivalents" (DCEs) are used to assigned an appropriate amount of these expenses directly to instruction and other non-sponsored direct cost objectives. DCEs are mathematical formulas that estimate the portion of departmental general fund expenses that should be assigned directly to non-sponsored activities and the portion that should be included in the Departmental Administration indirect cost pool. (See description of the accumulation of Departmental administration expenses in 3.1.0). the use of DECs is a long established accounting convention at academic institutions that is designed to help achieve consistent treatment of costs as required by Circular A-21 and CAS 502, and at the same time recognize the generally accepted accounting practices of the institution
Also see University policies on cost sharing Policy CADS-2 issued on June 19, 1998 and is effective on July 1, 1998.
2.2.0 Description of Direct Materials
The principal types of materials and supplies charged directly to sponsored agreements and other direct cost objectives include chemicals, glassware, drugs, books and periodicals, minor equipment items (i.e., those below the University's capitalization threshold of $1,000), uniforms, computer software and supplies, photographic supplies, and tools.
2.3.1 Method of Charging Direct Materials and Supplies
Direct materials and supplies requisitions from central warehousing are charged at an average unit price of units on hand plus a 4% administrative charge.
2.4.0 Description of Direct Personal Services
The principal classes of direct personal service costs are faculty, technicians, lab assistants research assistants, research associates, post-doctoral fellows, program assistant, program coordinator, program specialist, academic assistant, administrative assistant, administrative service assistant, administrative service specialist, technical assistant, university educational assistant, graduate students and other students. The direct charges include salaries and fringe benefits.
The salaries and fringe benefits of administrative and clerical staff are charged directly under the conditions described under 2.1.0.
2.5.0 & 2.5.2 Salary and Wage Cost Accumulation System
Assigned work Activity Confirmation System (AWACS) for Faculty and Professional Staff (including graduate students)
The documentation of charged and contributed faculty and professional activity on sponsored programs is accomplished by the University's Assigned Work Activity Confirmation System (AWACS). This system involves a budget estimate of each individuals planned effort and a survey on an annual basis, covering the first through last pay period of a fiscal year. An additional confirmation is made at the end of a sponsored program's budget period to cover the period from the last annual survey to the end of the budget period. Significant changes are made on an on going basis. A quarterly reminder is sent to principal investigators about the need to pay attention to changes.
The confirmation form contains pre-printed information on the distribution of each individual's salary. The pre-printed information is obtained from each project's payroll summary, and the Office of Sponsored Programs proposal/award data base. The payroll summary provides information about the salaries charged to a project. The proposal/award database contains cost sharing information obtained from the proposal record sheet. The salary charges recorded on the confirmation form are actual dollars charged to the project during the period covered by the confirmation. If the principal investigator indicated that contributed effort would be provided to the project on the proposal record sheet, the percentage of contributed effort appears in the cost sharing column of the form.
The confirmation forms are sent to responsible officials with first hand knowledge of the work or suitable means of verification (normally the principal investigator) as soon as possible after the close of the fiscal year. The responsible official is asked to review and certify to the data recorded on the confirmation form. If actual effort expended or contributed differs from the percentage indicated on the form, the official is responsible for revising the estimated percentage to reflect the actual percent of effort expended. If data is inaccurate or missing, the principal investigator is responsible for making necessary change and/ or additions. As the reports are returned, they are reviewed for signature and any apparent discrepancy. If changes or additions have been entered on the form for salaries charged to a sponsored project, then a "change" payroll authorization is processed to adjust the salary charges in the financial accounting system. If changes or additions are made to the contributed effort, the cost sharing data base obtained from the Office of Sponsored Programs is adjusted.
After-the-Fact Activity Reporting System (AARS) for Classified/Non-Professional Staff (including undergraduate students)
Activity certification reports are generated by the main-frame computer's After-the-Fact Activity Reporting System(AARS). This fully automated program performs the following functions:
· Extracts the information for classified/non-professional staff who have been paid from sponsored project accounts
· Calculates the percentage of effort charged to the sponsored project, based on all university account numbers which pay for the classified/non-professional staff's salary.
· Generates quarterly* certification reports, or reports through the sponsored agreement end date which are sent to the Office of Sponsored Programs for review and distribution.
* Quarterly reporting for non-professional staff has been approved by the Department of Health and Human Services, division of Cost Allocation.
The Office of Sponsored Programs distributes the reports to the responsible officials with first hand knowledge of the work or suitable means of verification (normally the principal investigator) and provides follow-up activity until all reports are returned. The officials are responsible for verifying the accuracy of the effort percentage or to modify them to reflect actual effort expended When a confirmation form is returned by the responsible official, it is reviewed for changes, additions and signature. If changes or additions are noted, the same procedures described above for AWACS is followed.
Departmental Administration Survey
Deans, department heads, and other department administrators of academic departments and certain other offices as deemed necessary are surveyed annually, at the end of the fiscal year, to obtain the percentage of their effort, and that of their staff, spent on the various functions of the University, including department administration activities. This survey is used to obtain information used in the development of the indirect cost proposal.
2.6.0 Description of Direct Fringe Benefit Costs
The following fringe benefits attributable to organized research, instruction and other direct cost objectives are treated as direct costs:
State Funded:
State Employee Retirement System(SERS) Contributions
SERS Administration
Alternate Retirement Plan
Teacher's Retirement Plan
Unemployment Compensation
Group Life Insurance
Social Security
Medical InsuranceUniversity Funded:
Worker Compensation
Leave costs (e.g., vacation, holiday, sick leave) are included in the normal charges for salaries.
2.6.1 Method of Charging Direct Fringe Benefits
All fringe benefits, except worker compensation and leave costs, are charged to cost objectives based on fringe benefit rates the State of Connecticut negotiates with the Department of Health and Human Services, Division of Cost Allocation. The University develops a separate Workers Compensation rate that is added to the State's rates. For sponsored project accounts, fringe benefit costs are charged on a bi-weekly basis in unison with the University's payroll dates.
2.7.0 Description of Other Direct Costs
Principal categories of other direct costs include: travel; consulting services; participant and subject costs, animals; animal care and other specialized and technical services; publication costs; subawards; equipment; alterations and renovations needed to meet specific project requirements; long distance telephone expenses; repair and maintenance of equipment; rent and other facility costs of off-campus facilities.
For the vast majority of cost transfers, the amount credited for direct costs and applicable indirect costs is the same as the amount originally charged for these costs. However, if a transfer crosses fiscal years, the indirect cost rate of the new year is used in determining the amount credited to the project. These situations are relatively rare and when they occur they often involve follow-on years of the same project. The University does not believe that this practice has a material effect on charges to sponsored agreements. A modification of the University's practices to use the original rates for indirect costs would require costly systems changes and labor-intensive monitoring procedures that would not be cost effective.
2.9.0 Interorganizational Transfer
When the University of Connecticut Health Center is a subrecipient of a subaward under a University of Connecticut sponsored agreement, the cost transferred include the Health Center's off-campus indirect cost rate. Similarly, when the University of Connecticut is a subrecipent of a subaward under a University of Connecticut Health Center sponsored agreement, the costs transferred include
3.1.0 Indirect Cost Categories
I. Accumulation Method
Depreciation on Buildings and EquipmentThe acquisition costs of buildings, equipment and capital improvements are recorded in the University's accounting system and an inventory of these items is maintained in the Inventory Control office. This inventory information is used to compute annual depreciation costs. The depreciation calculations are maintained in separate workpapers.
The interest expense in this indirect cost pool is interest on debt associated with buildings, equipment and capital improvements as defined in paragraph J.22.e.& f. of Circular A-21.
Bonds are sold for specific University construction and renovation projects. Interest is paid on these bonds twice a year. The bond proceeds used for a particular project is divided by the total bond proceeds to come to a percent. The percent is multiplied times the interest paid to determine the interest expense associated with the project. The University's current indirect cost proposal does not include interest expense, however, these costs are expected to be included in future proposals.
All costs pertaining to departmental administration are accumulated in the financial records system; however not all such costs are originally coded to the administrative function. The costs of deans' offices are identified through the accounting system. Various procedures are performed to determine the amount of additional costs to allocate to department administration on a departmental level. The costs associated with administrative activities of department heads, faculty and other professional academic staff are covered by a standard allowance of 3.6% of modified total direct costs specified in paragraph F.6.a.(2) of Circular A-21. An analysis is also done on administrative paycodes coded to non administrative functions, all expenditures thus identified as departmental administration are then reallocated to that function.
The remaining department support costs include the salaries and fringe benefits of administrative and clerical staff (excluding direct charges for administrative and clerical services under conditions discussed in 2.1.0) department business managers, office supplies, postage, travel associated with administrative activities, etc. This portion of departmental administration expenses is accumulated through an analysis of department operating fund accounts, the Departmental Administration Survey described in 2.5.0 and 2.5.2, and the application of "Direct Charge Equivalents" (DCEs). As discussed in 2.1.0, DCEs are mathematical formulas which estimate the portion of department operating fund expenses that should be assigned directly to instruction and other non-sponsored direct cost objectives, and the portion that should be included in the department administration indirect cost pool. The specific DCE formula used is the formula recommended in the HHS "Review Guide for Long-Form University Indirect Cost Proposals."
I. Accumulation Method - Continued
State Central ServicesState Central Service costs are the University of Connecticut's allocated share of the costs of central support services provided by the State of Connecticut. The allocations are made in a State-wide Cost Allocation Plan developed by the state and approved by the Federal Department of Health and Human Services, Division of Cost Allocation.
All Other Indirect Cost Categories
The remaining indirect cost categories are identified by the University's accounting system. As noted in 1.2.0, adjustments and reclassifications are needed to recast the information in the University's financial statements into the pool costs required by Circular A-21. These adjustments and reclassifications are listed and explained in schedules included in the University's indirect cost proposal.
Depreciation on Capital Improvements to Land
Depreciation on capital improvements to land are allocated based on the standard method in section F.2.b.(4) of Circular A-21, which uses a combination of full-time-equivalent student and employee data and salary data in a multi-step allocation process.
Library costs are allocated based on the standard method in section F.8. of Circular A-21, which uses a combination of full-time-equivalent student and employee data and salary data in a multi-step allocation process.
Student Administration and Services
The Student Administration and Services indirect cost pool is allocated entirely to the instruction function in accordance with the standard allocation base in section F.9.b. of Circular A-21.
3.2.0 (b) Business Data Processing
The University Computer Center (UCC) operations support both academic and administrative functions. The computer Center is considered a general support operation. This center does not charge users for its services. The cost of the center is put in the General Administration and General Expense pool. Major parts of the operation support the University's internal network within the institution, links to external web cites, e-mail and accounting systems.
In the University's current indirect cost proposal, space cost associated with the animal care facilities (e.g., building depreciation and operations and maintenance) were allocated entirely to the animal care services. The University's future indirect cost proposal will comply with the guidelines on the handling of institutional indirect costs associated with a research facility in the "Revised Cost Analysis and Rate Setting Manual for Animal Research Facilities" published by NIH.
3.4.0 Composition of Indirect Cost Pools
1. Depreciation on Equipment, Buildings and Land Improvements
Depreciation is calculated on the capitalized costs over the useful life of equipment, buildings and land improvements in accordance with J.12 of Circular A-21. Federal funds used to purchase equipment, construct buildings or land improvements are excluded from the amount of capitalized costs. Land improvements include paved parking lots, fences and sidewalks. See Part IV for additional information on the calculation of depreciation costs.
This cost pool is interest on debt associated with buildings, equipment and capital improvements as defined in part J.22.e. & f. of Circular A-21.
3. Operation and Maintenance Expense (O&M)
This cost pool consist of expenses incurred for the administration, supervision, operation, maintenance, preservation and protection of the institution's physical plant. It includes expenses incurred for such items as janitorial and utility services; repairs and ordinary or normal alternations of buildings, furniture and equipment; care of grounds; maintenance and operation of buildings and other plant facilities; security; disaster preparedness; environmental safety; hazardous waste disposal; property liability, and all other insurance relating to property; space and capital leasing; facility planning and management; and central receiving. The O&M expense category includes its allocable share of depreciation and interest.
4. General Administration and General Expenses (GA&GE)
This cost pool consist of costs that have been incurred for the general executive and administrative offices and other expenses of a general nature which do not relate solely to any major function of the university. These expenses include the expenses of the central offices of the institution such as the Chancellor's office; the offices for institution wide financial management, financial planning and budget, human resources; the office of the attorney general; and the operations of the central administrative management information systems.
GA&GE cost pool includes its allocable share of depreciation interest and O&M expense. The GA&GE cost pool also includes costs allocated from the Board of Trustees and President office as described in Part VII.
5. Departmental Administration (D/A)
This cost pool is comprised of expenses incurred for administrative and supporting services that benefit common or joint objectives in academic deans offices, academic departments and divisions, and organized research units. See 3.1.0 for additional information on composition and accumulation of departmental administration.
D/A cost pool also includes its allocable share of depreciation, interest, O&M and GA/GE expense.
6. Sponsored Projects Administration (SPA)
The SPA cost pool consist of expenses of the Office of Sponsored Programs, which is responsible for pre and post administration of all sponsored projects, and a portion of the Vice provost for Research and Graduate Education office. The SPA cost pool also includes its applicable share of depreciation, O&M, GA&GE and library expense. The SPA cost pool is allocated on the ratio of total costs of sponsored instructional and training, organized research and other sponsored activities recorded in the University' annual financial statements.
Included in library expense are the operational cost of the main and regional campus libraries, materials and books purchased for the libraries, but excluding the cost of rare books. Added to these cost are the appropriate shares of depreciation, operations and maintenance and general administration and general expenses. The Library cost pool includes its applicable share of depreciation, O&M and GA&GE expense.
8. Student Administration and Services (SAS)
Expenses associated with the administration of student affairs include such activities as: dean of students, admission, registrar, counseling, placement services, student advisors, student health and infirmary services. The SAS cost pool included its applicable share of depreciation, O&M, and GA&GE expense.
9. State Central Service Costs
As indicated in 3.1.0, state central service costs are the University of Connecticut's allocated share of costs of central support services provided by the State of Connecticut.
3.5.0 Composition of Allocation Bases
1. Depreciation on Buildings and Equipment
Building depreciation is allocated on a building by building basis among the functions performed in each building (e.g. organized research, instruction etc.) based on the amount of net assignable square feet occupied by each function. Functional usage is determined on a room-by-room basis through a space inventory and functional use survey, which assigns a specific percentage of use to each function performed in each room.
Equipment depreciation is allocated based on the functional use of the room in which the equipment is located. The functional use of each room is determined through the space survey described in the previous paragraph.
As noted in 3.1.0, depreciation on capital improvements to land is allocated based on the standard method in section F.2.b.(4) of Circular A-21.
Interest costs are allocated on the same basis as depreciation on the buildings and equipment to which the interest relates.
Operation and maintenance expenses are allocated on the same basis as building depreciation, except that university-wide square footage (rather than building-by-building square footage) is used to allocate those O&M components, such as central management of plant operations, that cannot be identified to individual buildings.
4. General Administration and General Expenses
The allocation of GA&GE is made to all benefiting functions based on modified total costs. The modified total cost base consist of all salaries and wages, fringe benefits, materials and supplies, services, and travel. Excluded are capital acquisitions, all subcontracts, student scholarships and fellowships, alterations, and cost of services render by a specialized service facility.
5. Departmental Administration
The allocation of departmental administrative expenses is made to all benefiting functions on the basis of modified total direct costs (MTDC). Modified total direct costs consist of the same cost elements as the modified total direct cost base used to allocate General Administration and General Expenses. As stipulated in section F.6. of Circular A-21, the administrative expenses of the dean's office of each college and school are allocated to the academic departments and other organizational units within that college or school. The administrative expenses of each department, plus the department's share of the dean's office costs, are allocated to the direct functions within that department.
6. Sponsored Project Administration
These costs are allocated based on the MTDC of the sponsored projects within each major function of the institution. MTDC for this purpose consist of the same cost elements as the allocation base for General Administration and General Expenses and Department Administration.
Library costs are allocated to the major functions of the university based on the standard method prescribed in Section F.8 of circular A-21, which uses a combination of full-time-equivalent student and employee data and salary data in a multi-step allocation process.
8. Student Administration and Services
The Student Administration and Services cost pools is allocated entirely to the instruction function in accordance with the standard base in Section F.9.b. of Circular A-21.
State Central Services costs are allocated on the same basis as General Administration and General Expenses.
The final distribution base (i.e., the base used to allocate the accumulated indirect costs of each major function to sponsored agreements within that function) is also MTDC and consist of the same cost elements as the base for allocating the administrative cost pools noted above.
Cost sharing of direct cost on sponsored agreements is included in the same indirect cost allocation base (e.g., organized research) as the costs charged to the agreement. The University policy on cost sharing is cited in section 2.1.0. The procedure for identifying cost sharing salaries are described in 2.5.0 and 2.5.2.
4.1.1 Asset Values and Useful Lives
For financial statements purposes, each building is considered a single asset. For indirect cost purposes, major components of some buildings (e.g., building foundation and shell; heating, air conditioning and ventilation systems;) are separately identified and depreciated over each component's useful life. The financial statements do not include depreciation, therefore, the portion of item 4.1.1 related to useful lives does not apply.
4.3.0 Treatment of Gains and Losses on the Disposition of Depreciable Property
In accordance with section J.33 of Circular A-21, the University has excluded gains and losses on the disposition of depreciable property from the determination of sponsored agreement costs. This section of the Circular has recently been revised to require that these gains and losses be treated as credits or charges to the asset cost grouping in which the property was included. The University will comply with the new requirement effective with the development of its next indirect cost proposal.
6.4.1 Worker's Compensation and Liability
The workers' compensation charge rate, for the University's ensuing fiscal year, is calculated based on the actual worker's benefits paid recorded in the previous four calendar quarters (i.e., April - June; July - September; October - December; January - March). These amounts are totaled and divided by total university salary and wages paid for the same period to compute the rate.
Workers compensation costs are charged, based on a calculated rate, to all university accounts which have salary charges recorded against them. An adjustment is made for a deficit or surplus in the reserve account when calculating the next fiscal year's worker's compensation rate.
The University does not self insure for liability coverage.
Casualty insurance is normally an indirect cost, except where the sponsor and the university
agree that the sponsor will bear the cost of insurance premiums. Otherwise, cost of coverage
is incurred by the university or state, and is a component of GA&GE.To the extent shipping
insurance is included in freight fees, this insurance cost could be charged directly to sponsored
agreements.The university carries a high deductible for fire and casualty insurance on buildings and
contents. Any losses within the deductible are not charged to sponsored agreements as direct
or indirect cost. The State of Connecticut purchases insurance for coverage over the deductible.
7.1.0 Organizational Structure
Board of Trustees and President
University of Connecticut - Storrs and Regional Campus
University of Connecticut Health Center
7.2.0 Cost Accumulation and Allocation
A. Board of Trustees and the President oversee the University of Connecticut, Storrs and Regional Campus, and the University of Connecticut Health Center's operations.
B. The costs of the Broad of Trustees and the President's Office are identified and accumulated in the University of Connecticut's financial accounting system.
C. After analysis and adjustment for "unallowable costs" the cost of these activities are allocated to the University of Connecticut, Storrs and Regional Campus and the University of Connecticut Health Center based on salaries and wages.
D. None.
E. None.