Procedure No. 30.7

Cost Policy Statement

Adopted: 4/27/2022

  1. Purpose
    • The purpose of this policy is to ensure compliance with the Code of Federal Regulations (CFR), Title 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
    • Atlantic Cape Community College (College) is responsible for the efficient and effective administration of Federal awards through the application of sound management practices and assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. All costs, direct, indirect, and allowable costs, proposed or incurred on a sponsored project must comply with sponsor terms and conditions; applicable federal, state, and local regulations; and College policies and procedures.
  2. General Accounting Policies
    1. Basis of Accounting — Accrual Basis
    2. Fiscal Period — July 1 through June 30
    3. Allocation Basis — Direct Allocation Basis
    4. Indirect Cost Rate Allocation Base — Simplified Method under Appendix III to Part 200 Section D of 2 CFR
    5. No fringe benefit rate needed.
    6. Atlantic Cape Community College maintains adequate internal controls to insure that no cost is charged both directly and indirectly to Federal contracts or grants.
    7. Atlantic Cape Community College accumulates all indirect costs and revenues in accounts titled “Indirect Costs‐ Expense” by grant and “Indirect Cost‐ Revenue”.
    8. Asset capitalization policy‐Assets with estimated useful lives in excess of one year and a unit cost of $2500 or greater are capitalized and depreciated over their estimated useful lives.
    9. Drawdown of federal funds‐Atlantic Cape Community College draws funds on a cost reimbursement basis or, if done in advance, not more than three days prior to incurring the expenses.
    10. Pre‐award costs are not allowable unless approved by the awarding agency.
  3. Description of Cost Allocation Methodology
    1. Salaries and Wages
      1. Direct Costs —Employee time is directly charged to the grant based on the time they spend working on the program. The charges are supported by auditable time and effort reports that support the actual time worked on the program and are approved by the employee’s supervisor.
      2. Indirect Costs —all other department payroll not directly associated with the program is covered under the indirect cost allocation percentage.
      3. Mixed Charges —The College does not have mixed personnel costs on programs.
      4. Release time (vacation, sick leave, holiday pay, etc.) Release time follow the same allocation as the employee’s payroll. Release time is charged when taken during the program period.
    2. Fringe Benefits
      • Atlantic Cape Community College provides the following fringe benefits to fulltime employees: employer FICA match, pension match, health insurance (medical, prescription, dental, vision), and disability and unemployment  insurance. Fringe benefits to part‐time employees include employer FICA match and unemployment insurance and pension to eligible employees. All fringe benefits are tracked by the College's accounting system and are allocated the same way as the related payroll.
    3. Major Expenditures and method of treatment:
      • Travel‐Only directly related travel costs are charged to the program
      • Occupancy Expenses‐Non‐campus costs directly related to the program are charged directly to the program. Any campus costs are recovered through the allowed indirect costs allocation percentage.
      • Supplies and Materials‐Only costs directly related to the program are charged to the program.
      • Communications‐Only costs directly related to the program are charged to the program.
      • Photocopying and Printing‐Only costs directly related to the program are charged to the program.
      • Outside Services‐Only costs directly related to the program are charged to the program.
      • Depreciation and Use Allowances‐Only as allowed through the indirect cost recovery allocation percentage.
      • Repairs and Maintenance‐Only equipment repair costs as directly related to the program.
      • Utilities ‐Only as allowed through the indirect cost allocation percentage.
      • Capital Items‐Only items allowed and directly related to the program are charged to the program.
      • Insurance‐Only as allowed through the indirect cost allocation percentage.
    4. Unallowable Costs:
      • Atlantic Cape Community College recognizes that the following costs are unallowable charges to Federal awards and has internal controls in place to insure that such costs are not charged to Federal awards:
        • Fund Raising, Entertainment/Alcoholic Beverages, Lobbying, Capital Expenditures unless expressly authorized by a Federal award, Advertising costs (other than for recruitment of staff or for the disposal of property), Bad Debts, Fines and Penalties and Contributions.
    5. Allowable Costs
      • A cost must conform to any limitation or exclusion as set forth in 2 CFR 200 or in the governing sponsored project agreement as to types or amounts of cost items. Costs must meet the following general criteria in order to be allowable under federal awards (Source 2 CFR 200 §200.403):
        1. Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
        2. Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
        3. Be consistent with policies and procedures that apply uniformly to both federally‐financed and other activities of the non‐Federal entity.
        4. Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
        5. Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.
        6. Not be included as a cost or used to meet cost sharing or matching requirements of any other federally‐financed program in either the current or a prior period. See also §200.306 Cost sharing or matching paragraph (b).
        7. Be adequately documented. See also §200.300 Statutory and national policy requirements through 200.309 Period of performance of this part.
        8. Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to §200.308(e)(3).