GAP 200.340, Cost Accounting Standards (CAS) on Sponsored Projects

  1. Applicability
  2. General
  3. Definitions
  4. Cost Accounting Standards (CAS)




Federal awards issued prior to December 26, 2014 should be managed in accordance with OMB Circulars A-21, A-110, and A-133.  Federal awards issued on or after December 26, 2014 should be managed in accordance with 2 CFR Part 200:  Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (The Uniform Guidance).  It is important to verify the appropriate regulations applicable to your award.  Documentation of appropriate regulations may be found in the Award Notice issued by the funding agency.

These guidelines pertain to federally sponsored projects and should be used as guidance for all sponsors unless specifically addressed in a non-Federal sponsor’s policies and/or procedures.

This GAP supersedes previous GAP versions, Duke Policies, Guidelines, etc.  Unless otherwise noted, this GAP applies to all sponsored projects, unless superseded by guidelines from Non-Federal sponsors.



(Note: 2 CFR Part 220 replaces the OMB Circular A-21. This Part speaks to the purpose, scope, policy, and other issues relevant to cost principles. When determining costs applicable to grants, contracts, and other agreements with educational institutions, Federal program Directors and Fiscal Officers will refer to this title.)

Duke University and other educational institutions receiving federal funds are required to comply with the Cost Accounting Standards (CAS) set forth in 2 CFR Part 220 Sections 220.5 through 220.45 and Appendix A of the Office of Management and Budget (OMB) Cost Principles for Educational Institutions.

Sponsored projects subject to CAS are:

  • All federal awards
  • All awards that contain any federal flow-through funds
  • Awards with terms and conditions which reference OMB 2 CFR Part 220 or CAS
  • Sponsored projects whose funds are being used as cost sharing on a CAS covered project, only the individual cost(s) being used as cost sharing will be subject to the definitions of direct costs and “unlike circumstances”
  • Awards not covered under CAS are still subject to the requirements listed in the award and University guidelines

Four standards and a disclosure statement define the CAS requirements. Section IV of this GAP defines the standards.

The disclosure statement (DS-2) is a comprehensive description of an organization’s cost accounting practices. This statement includes direct costs, Facilities & Administrative (indirect) costs, depreciation and use allowances, leave costs and applicable credits, and deferred compensation/insurance costs. The DS-2 requirement applies to all institutions receiving sponsored projects totaling $25 million or more that are subject to the CAS. The DS2 will be reviewed and revised/updated as necessary. Revisions and additions will be submitted in accordance with 2 CFR Part 220 Appendix A.



Government Definition of Facilities & Administrative (F&A) or indirect costs:

According to 2 CFR Part 220, F&A costs are “costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity.” Examples include: salaries, wages and fringe benefits for clerical and administrative positions not allowable as direct costs, memberships, subscriptions, library books, periodicals, office supplies, general purpose equipment, janitorial services, photocopying charges (for general business use), postage, repair & maintenance, sanitation services, local telephone service, utilities.

GAP 200.330, Facilities and Administrative (Indirect) Costs on Sponsored Projects provides information on F&A costs.

Government Definition of Direct Costs:
Direct costs are those costs that can be identified specifically with a particular sponsored project, or that can be directly assigned to such activity relatively easily with a high degree of accuracy.

GAP 200.320, Direct Costing on Sponsored Projects, has specific information and procedures for charging sponsored research for Direct Costs.




CAS 501:

Consistency in Estimating, Accumulating, and Reporting Costs by Educational Institutions

Fundamental requirement:An educational institution’s practices used in estimating costs to develop a proposal budget shall be consistent with the educational institution’s cost accounting practices used in accumulating and reporting costs.

Assistance with proposal development from the appropriate pre-award office and the guidelines detailed in GAP 200.320, Direct Costing on Sponsored Projects and GAP 200.330, Facilities and Administrative (Indirect) Costs on Sponsored Projects will assist in complying with the above standard.

CAS 502:

Consistency in Allocating Costs Incurred for the Same Purpose by Educational Institutions

Fundamental requirement:All costs incurred for the same purpose, in like circumstances, are either direct costs only or F&A costs only with respect to final cost objectives.

The guidelines and procedures detailed in Section III.D of GAP 200.320, Direct Costing on Sponsored Projects will assist in complying with this standard.

CAS 505:

Accounting for Unallowable Costs - Educational Institutions

Fundamental requirement: Costs expressly unallowable or mutually agreed to be unallowable shall be identified and excluded from any billing, claim, application, or proposal applicable to a Sponsored Agreement.

Unallowable Costs:
For either F&A costs or Direct Costs, 2 CFR Part 220 identifies specific activities or transactions that are not allowed to be charged to sponsored research, either as a direct cost or an F&A cost. The following costs have been specifically identified by the Government as unallowable on Government grants and contracts.

The list below is not all-inclusive. Individual agency and program requirements may list other "unallowable" costs.

  1. Advertising for general promotion of the University, including printed materials, promotional items, memorabilia, gifts, and souvenirs
  2. Advertising for recruitment purposes that includes color or is excessive in size
  3. Alcoholic beverages
  4. Alumni or fundraising activities
  5. Antiques
  6. Bad debt write-offs
  7. Charitable Contributions
  8. Commencement expenses
  9. Decorative objects for private offices
  10. Entertainment
  11. Fine/original art
  12. Fines and penalties
  13. First-class/business-class air travel differentials
  14. Flowers
  15. Gifts, prizes, and awards
  16. Goods or services for personal use
  17. Lobbying
  18. Memberships in airline travel clubs
  19. Memberships in civic, social, community organizations or country clubs
  20. Faculty and exempt staff salary in excess of base rates paid by the institution.
  21. Selling or marketing products or services of the University.
  22. Social events

GAP 200.320, Direct Costing on Sponsored Projects discusses in further detail the guidelines used to determine the "allowability" of costs.

CAS 506:

Consistency in Using the Same Accounting Period for Purposes of Estimating, Accumulating and Reporting Costs - Educational Institutions

Fundamental requirement: Educational institutions shall use their fiscal year as their cost accounting period.

Please see GAP 200.011, Fiscal Calendar for information related to Duke's fiscal year structure.



Note: This guidance is administrative in nature and is not a cost reimbursement policy. Failure to comply may or may not result in adjustments of charges to the award. Noncompliance with this policy does not mean this cost is unallowable from an external perspective. Any adjustments of charges will be as required under applicable federal cost reimbursement principles. If a cost is removed from an award for any reason, whether or not related to this guidance, the cost will generally be charged to departmental funds.