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This guide assists state, local, and Indian tribal governments in applying OMB Circular A-87, providing principles and standards for determining costs relevant to Federal grants and contracts.

How to fill out cost principles and procedures

How to fill out Cost Principles and Procedures for Developing Cost Allocation Plans

1. Gather all necessary financial data and documentation.
2. Understand the specific cost principles applicable to your organization.
3. Identify and categorize the different types of costs (direct and indirect).
4. Determine the allocation base(s) that are relevant to your cost allocation plan.
5. Develop a clear method for allocating indirect costs to direct services or projects.
6. Document the procedures for calculating and applying costs, including any formulas used.
7. Ensure compliance with relevant regulatory requirements and guidelines.
8. Review and update the plan regularly to reflect changes in costs or funding sources.

Who needs Cost Principles and Procedures for Developing Cost Allocation Plans?

1. Non-profit organizations seeking federal funding.
2. State and local governments administering federal grants.
3. Academic institutions receiving research grants.
4. Any organization that needs to allocate costs for budgeting and financial reports.
5. Entities required to establish compliance with federal cost principles.

People Also Ask about

What cost principles and procedures in far 31 and agency supplements shall be used in?

(a) The cost principles and procedures in subpart 31.2 and agency supplements shall be used in pricing negotiated supply, service, experimental, developmental, and research contracts and contract modifications with commercial organizations whenever cost analysis is performed as required by 15.404-1(c).

What are the principles of cost allocation?

Cost allocation establishes principles that each funding source bears its “fair share” of the cost. The principles are grounded in the fact that you treat expenses consistently among funding sources and no portion of a program bears the cost when more than one funding source benefits.

How to develop a cost allocation plan?

Basic Steps of Cost Allocation Identify shared facilities or support services. Identify the costs to be allocated. Determine the allocation factors/methodology to distribute the costs equitably. Allocate the costs. Update and monitor the data and methodology to ensure the allocation remains fair and equitable over time.

What are the four steps in the cost allocation process?

There are four major steps to allocating expenses: Determine program services and supporting activities. Determine direct and indirect expenses. Determine proper allocation methods for indirect expenses. Apply allocation methods to indirect expenses.

How to create a cost allocation plan?

Basic Steps of Cost Allocation Identify shared facilities or support services. Identify the costs to be allocated. Determine the allocation factors/methodology to distribute the costs equitably. Allocate the costs. Update and monitor the data and methodology to ensure the allocation remains fair and equitable over time.

What is an example of a cost allocation?

Cost allocation based on effort. A research assistant spends 80% effort on Project A and 20% effort on Project B. The research assistant uses supplies totaling $3,000 per month on the two projects. Usage is directly related to the amount of effort devoted to each project. $2,400 (80% of $3,000) is charged to Project A.

How do you create a cost management plan?

How to develop a cost management plan Plan resources. Before starting a project, determine the resources it requires, which might include certain people, skills, materials, tools, equipment and funds. Estimate costs. Create a budget. Perform cost control. Measure performance.

What are the cost principles?

Four Cost Principles Reasonable. Allocable. Consistently Treated. Allowable.

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What is Cost Principles and Procedures for Developing Cost Allocation Plans?

Cost Principles and Procedures for Developing Cost Allocation Plans refer to the guidelines and methodologies established for determining the allowable costs associated with federal grants and contracts. These principles help organizations allocate their expenses appropriately among different cost centers or projects.

Who is required to file Cost Principles and Procedures for Developing Cost Allocation Plans?

Organizations that receive federal funding or grants are typically required to file Cost Principles and Procedures for Developing Cost Allocation Plans. This includes non-profit organizations, educational institutions, state and local governments, and certain for-profit entities engaged in federally funded projects.

How to fill out Cost Principles and Procedures for Developing Cost Allocation Plans?

To fill out Cost Principles and Procedures for Developing Cost Allocation Plans, an organization must gather necessary financial data, identify cost centers, allocate costs based on established methodologies, and document all processes and calculations. Specific forms and formats may be required by the funding agency.

What is the purpose of Cost Principles and Procedures for Developing Cost Allocation Plans?

The purpose of Cost Principles and Procedures for Developing Cost Allocation Plans is to ensure that organizations can properly account for and allocate costs related to federal funding, promote transparency, and ensure compliance with federal guidelines and regulations.

What information must be reported on Cost Principles and Procedures for Developing Cost Allocation Plans?

Information that must be reported includes the organization's indirect cost rates, direct costs, the methodology for cost allocation, supporting financial documentation, and any other relevant data that demonstrates compliance with cost principles.