Cost Accounting Standards

The Cost Accounting Standards and the Policy on Indirect Cost Recovery Excluded (ICRX) Expenditures apply to ALL university expenditures.

A workshop on CAS is offered by Cost Reimbursement Office. To register, go to Training on the UM Research website; select "DRDA and Financial Operations Workshops."

Cost accounting standards, as promulgated by the federal Cost Accounting Standards Board, have been incorporated into OMB Circular A-21 and have been extended to all awards--contracts and grants--in excess of $500,000. While universities can be found in noncompliance only in connection with awards in excess of $500,000, consistency in cost accounting practices must be demonstrated across-the-board for all activities.

Adherence to these cost accounting procedures has significant implications for the preparation and approval of budget materials in all proposals to federal sponsors. The University has to provide assurances: (1) that the pricing of the proposed effort has been undertaken in a manner consistent with the capacity of the University's accounting system to accumulate and report expenditures incurred; and (2) that costs incurred for the same purpose in like circumstances have been treated consistently as either direct or indirect costs. In short, the way that faculty member A in the Physics Department prepares the cost estimates reflected in his or her budget must be consistent with the way in which faculty member B in Mechanical Engineering prepares his or her budget materials.

The four cost accounting standards with which universities must be in compliance are further detailed in Cost Accounting Standards. Please consult with the appropriate DRDA Project Representative should you have any questions regarding the application of these cost accounting standards to a specific project budget or federal sponsoring agency.