Local Telephone Costs and Sponsored Projects

Complying with OMB A-21 Restriction on Charging Local Telephone Costs to Federal Sponsored Projects

From: Jud Hurd, Controller

Sent: Saturday, November 03, 2001 7:14 AM 

To: 'PS Finance Managers'; 'PeopleSoft Users' Subject: Complying with OMB A-21 Restriction on Charging Local Telephone Costs to Federal Sponsored Projects

The purpose of this email is to inform you of a change I am implementing at Telecommunication Services effective January 1, 2002 to help us comply with the OMB A-21 restriction on charging local telephone costs to sponsored projects (fund 30 or 31 FOPPS). Office of Management and Budget (OMB) Circular A-21, Cost Principles for Educational Institutions, establishes principles for determining costs applicable to federal grants, contracts and other agreements with educational institutions. Section F.6.b.(3) says that items such as office supplies, postage, LOCAL TELEPHONE COSTS, and memberships shall normally be treated as F&A costs (facilities and administrative costs or indirect costs). This means that these costs are not to be charged directly to sponsored projects unless a specific project has been granted an exception due to "unusual circumstances". This also normally means that the item is specifically included in the approved budget or has been otherwise approved by the sponsoring agency. NOTE: "Local telephone costs" are the costs of the telephone service (e.g., the phone on your desk) and do not include the cost of long distance telephone charges.

WHAT CHANGE IS BEING IMPLEMENTED JANUARY 1, 2002? 

Beginning January 1 Telecommunication Services will not charge costs to sponsored projects (funds 30 and 31 speedtypes). All telecommunication service costs will have to be charged to general fund (10), auxiliary fund (20, 26, 28, 29), gift fund (34) or capital construction fund (71) SpeedTypes only. Exception - Telecommunication Services will continue to charge telecommunication service costs to sponsored projects that Sponsored Projects Accounting has authorized as having an exception to the OMB A-21 local telephone cost limitation.

DOES THIS APPLY TO ALL SERVICES PROVIDED BY TELECOMMUNICATION SERVICES?

No. This applies only to equipment charges, work orders and Ethernet services - the services we feel comprise local telephone costs. This does not apply to long distance charges. A long distance telephone call may be charged as a direct cost to a sponsored project provided the phone call relates directly to the project.

HOW WILL THE EXCEPTION LIST BE CREATED? 

If you believe you have a project that has an authorized exception to the OMB A-21 limitation, then please notify Rob Lucas (Robert.Lucas@colorado.edu) of the sponsored project FOPPS. Also point out the information in the award budget you believe authorizes the exception. Rob will review the award document and if he confirms that the project has an authorized exception, he will notify Telecommunication Services to put that project's speedtype on the exception list. Please notify Rob before December 25, 2001.

WHERE DO I LOOK TO SEE IF MY PROJECT HAS AN AUTHORIZED EXCEPTION? 

You have to review the approved award budget to see if telephone costs are specifically listed as allowable costs. Telephone costs may be listed under the 'Other Direct Costs' or 'Other Expenses' category. You may not be able to rely on the budget you proposed as the item may have been struck out of the budget by the awarding agency. So, pull out your award document, review the budget and let Rob know if you see telephone cost (the cost of local telephone service - not long distance charges) listed as a specifically authorized expense.

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