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Sponsored Project OMB Uniform Guidance and Cost Accounting Standards

Find out about the OMB Uniform Guidance and Cost Accounting Standards, major components of fiscal compliance.

Fiscal management

Institutions and researchers must comply with externally imposed requirements related to the management of research funds. The objectives of good fiscal management are twofold:

  1. To make the best use of available funds to achieve research outcomes
  2. To avoid problems of fraud, waste, and abuse of sponsor support

Formal cost accounting standards as set forth by the federal government and institutional fiscal policy help set the appropriate fiscal protocols for researchers and the University.

Proper classification of costs

This is a key component of compliance with federal regulations. Non-compliance may result in financial penalties for UCSD and could affect our ability to qualify for federal funds.

OMB Uniform Guidance

Anyone authorizing the expenditure of federal funds must have a working understanding of the underlying cost principles as set forth in OMB Uniform Guidance. These principles govern costs that may be charged either directly or indirectly to the government by educational institutions. UCSD generally applies these same cost principles to non-federal funding as well, although in some cases non-federal sponsors define costs differently than federal sponsors.

2 CFR Part 200

OMB Uniform Guidance (UG) at 2 CFR part 200 is the abbreviated title for Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200), which supersedes OMB Circulars A-21, A87, A-102, A-110, A-122, and A-133, and the guidance in Circular A-50 on Audit Followup.

In 2013, OMB partnered with the Council of Financial Assistance Reform (COFAR) to revise and streamline guidance to develop the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance) located in title 2 of the Code of Federal Regulations (2 CFR part 200) (79 FR 78589; December 26, 2013). The intent of this effort was to simultaneously reduce administrative burden and the risk of waste, fraud, and abuse while delivering better performance on behalf of the American people. Implementation of the Uniform Guidance became effective on December 26, 2014 (79 FR 75867, December 19, 2014) and must be reviewed every five years in accordance with 2 CFR 200.109.

The objectives of the most recent updates to the Uniform Guidance  were to modernize reporting for federal grant recipients, reduce administrative burden, and to clarify areas of misinterpretations. The effective date of the UG revisions is November 12, 2020.

UCSD compliance

UCSD must comply with the UG requirements to ensure the recovery of direct and indirect (F&A) costs. As a required element of UG, the University must disclose its cost accounting practices in writing to the federal government. UCSD satisfied this requirement with the disclosure statement (DS-2) submitted to the federal government in 1996.


The DS-2 describes the cost accounting practices that UCSD follows. This document lays the groundwork for fiscal policy created to support daily financial operations.

Cost Principles 

Cost accounting standards pertain to all awards, federal or non-federal. While terms and conditions of specific awards may differ, the overriding principles that govern campus fiscal accountability must remain consistent. At times, University practice may seem inconsistent with a practice authorized by an agency. If you notice an inconsistency, notify the campus compliance officer for resolution.

The four cost accounting standards that pertain to UCSD

  • CAS 501: Consistency in Estimating, Accumulating, and Reporting Costs
    This standard ensures that practices used to estimate proposal costs are consistent with practices used to record expenditures against funds.
  • CAS 502: Consistency in Allocating Costs Incurred for the Same Purpose
    This standard describes how costs are allocated.
  • CAS 505: Accounting for Unallowable Costs
    This standard requires that all unallowable costs be identified and excluded from any billing, claim, or proposal under a federal government award.
  • CAS 506: Cost Accounting Period
    This standard describes the cost accounting period, which for UCSD, is the fiscal year, July 1 – June 30.

The intent of Cost Accounting Standards is to:

  • preclude a perceived overcharge to the government
  • standardize requirements for recipients
  • standardize university costing practices
  • prevent charging unallowable costs to federal awards
Find answers, request services, or get help from our team at the UC San Diego Services & Support portal or call the Finance Help Line at (858) 246-4237.