DS-2 Fact Sheet - Accounting and Financial Reporting - The University of Texas at Dallas

DS-2 Fact Sheet


The federal government requires institutions that receive more than $25 million in federal research contracts or grants to disclose their cost accounting practices for measuring, assigning and allocating costs in a disclosure statement, DS-2. The disclosure statement provides the federal government with more fiscal controls to ensure greater efficiency, effectiveness and accountability by institutions receiving federal grants or contracts. The UT Dallas Office of Budget and Finance created the DS-2 document, which follows the format, prescribed by the federal government and represents the pertinent UT Dallas policies and procedures. For a complete appreciation of these regulations, principal investigators and research administrators should review the entire UT Dallas DS-2 document here as well as the Office of Management and Budget (OMB) Circular A-21 here.

Effective Date

The DS-2 has been negotiated with and ratified by our cognizant federal agency, the Department of Health and Human Services (DHHS), it is considered to be effective January 6, 2006, the date the document was submitted.

DS-2 Components

Description: http://www.utdallas.edu/finance/main/images/fact_sheet.PNG

Policies and Procedures

The following is a summary of key UT Dallas policies and procedures disclosed in the DS-2 document. These policies and procedures ensure UTD’s compliance with the underlying provisions of OMB Circular A-21 and the applicable Cost Accounting Standards.


  • All proposals submitted under the UT Dallas name must be reviewed by the Office of Sponsored Projects and approved by the authorized UT Dallas officials with authority to obligate the University in contractual relationships.
  • Proposal budgets must be developed using cost items, rates and categories that are consistent with the University’s accounting system.
  • Specific items of cost must be consistently budgeted in similar circumstances (direct or indirect).
  • Salaries and benefits for administrative and clerical positions in academic units shall normally be charged to the respective departmental cost centers and not sponsored program cost centers.
  • General office supplies, postage and telephone line charges shall normally be charged to the respective departmental cost centers.
  • Total direct costs to complete sponsored projects must be recorded in either the sponsored or cost sharing cost centers, which have been specifically established for the particular sponsored projects.
  • Costs that are considered “unallowable” by the federal government must be identified and accounted for separately in the University’s financial records.
  • The University shall consistently use the same accounting period for purposes of estimating, accumulating and reporting costs (September 1st through August 31st).
  • Service Center charges shall be based on rates, which have been developed, based on actual costs of the service center and which have been reviewed and adjusted on an annual basis.


The following procedures will facilitate compliance with the established policies.


  • University employee salaries and benefits required to complete a sponsored project should be budgeted and charged as a direct cost.
  • Only allowable project salaries and benefits should be charged to a sponsored or cost sharing cost center.
  • When original charges for salaries must be adjusted due to changes in actual workload, an appropriate Personnel Action Form (PAF) or an Interdepartmental Transfer (IDT) shall be initiated to record the adjustment in the accounting records.

Administrative Salaries

  • Salaries and fringe benefits for departmental, administrative and clerical support staff shall be budgeted and charged to departmental cost centers and not the sponsored program or cost share cost centers.
  • Exceptions:

In instances where sponsored projects require the service of administrative or clerical staff beyond the normal level of department administration, the total costs of these services may be budgeted/charged to sponsored projects when:

    • Type and nature of services is not provided by the department administrative support
    • The services are required by the project scope
    • Costs can be accurately identified to the project, and the approved budget narrative clearly describes the need for the service.

Salaries for administrative or clerical personnel may be direct charged to a sponsored project if the project involves:

    • Extensive data accumulation and analysis
    • Preparation and production of manuals or large reports or books
    • Extensive travel and meeting arrangements for conferences and seminars
    • Management of a project at locations which are remote from campus, and similar situations.


  • All fringe benefits, vacation pay (including termination lump sum payments), holiday pay, sick leave pay and other paid absences are to be charged to the current paying cost center(s), including sponsored cost centers, in such a manner that each paying cost center pays its prorated share of the actual costs based on the payroll distribution of the salaries for each particular period.

Operating Expenses

  • Operating expense type costs, which can be specifically identified to a sponsored project, should be budgeted, charged and reported as a direct cost to the project or cost sharing cost center.
  • Service or recharge center charges must be based on actual utilization and cost-based charge rates.
  • Telecommunication charges for academic departments required to support basic activities should be charged to the departmental cost centers.
  • Equipment and toll charges for phones needed for field sites, cellular phones while on travel status and large projects requiring dedicated lines may be charged directly to a sponsored cost center. These charges should be described in the budget and approved by the sponsor.
  • The cost of postage, general offices supplies (paper, pencils, notebooks, etc.) and memberships should normally be charged to the respective departmental cost centers.
  • Postage and general office supplies can be direct charged to sponsored cost center when:
    • The project requires a substantial amount of this item and it can be specifically identified
    • The items are justified in the budget narrative and approved by the sponsor.
  • Rent or lease expenses may occasionally be a direct charge to a sponsored project when:
    • It is in lieu of hotel (travel) costs for long term field work
    • Apartments are leased to provide lower-cost housing
    • University owned space is not available for the completion of the project.
  • Utility and Custodial Services may be considered direct costs when space is rented and the off-campus Facilities & Administration rate is applied.
  • Motor vehicle maintenance expenses of project dedicated vehicles and vehicles used in the field may be directly charged to a sponsored project.
  • Motor vehicle expenses incurred while on travel status may be directly charged to a sponsored project.


  • Travel costs of University employees, which can be specifically identified to a sponsored project, can be a direct cost.
  • Travel costs in academic departments, which are associated with the basic activities of the University, should be charged to the appropriate non-sponsored activity cost center.
  • Foreign travel costs funded by federal sponsored programs must comply with the Fly America Act.


  • Sub-awards to other organizations should be budgeted, charged and reported as direct costs.
  • The applicable Facilities & Administration rate will be applied to the first $25,000 of each sub-award regardless of the period covered by the sub-award.


  • An item with a unit costs $5,000 or more and a life expectancy of more than one year meets the definition of equipment.
  • The equipment item must be specifically identified and utilized on a sponsored project.
  • Equipment must be purchased within the project period. Equipment purchased late in the project period may require approval of the sponsor.
  • Equipment cost is excluded from the indirect costs (Facilities & Administration) rate calculation.
  • Cost sharing on equipment items must be in the form of an original purchase of equipment within the project period.
  • The costs of previously purchased equipment cannot be included as direct cost sharing since it is considered to be part of the Facilities & Administration rate.

Scholarship and Fellowships

  • Allowable scholarships, stipends, fellowships and tuition & fees that can be specifically identified to a project can be charged as a direct cost. This type of cost will be excluded from the application of the Facilities & Administration rate.

Cost Overruns/Deficits

  • When it’s necessary to remove excess charges incurred with the operating supplies and expense category, an IDT should be prepared transferring the excess expense to a cost center within the same function as follows:
    • To the cost sharing cost center when one exists
    • To any other appropriate cost center in the same function (Research, Public Service, Instruction, etc.).

Facilities and Administration Rates (F&A)

  • The following cost pools are included in the F&A rate: General University Administration, Academic Department Administration, Sponsored Projects Administration, University Facilities Maintenance and Operation, Depreciation of Non-federally funded purchased equipment and facilities and Library costs.
  • The University’s federally approved F&A rates are located here. The rates are developed, proposed and negotiated periodically as specified by our cognizant federal agency.
  • Every effort should be made to use the negotiated rates, any exceptions need to be approved by the Office of Sponsored Projects.


  • To correct a charge made in error to a sponsored cost center, transfer the charge to the appropriate paying cost center providing adequate explanation as to how the error occurred. Provide sufficient details on how the error occurred. “To transfer charge to correct cost center” is not sufficient.
  • Every effort should be made to reconcile sponsored program cost centers on a monthly basis and issue correcting IDT’s. Erroneously recorded costs, if not corrected within 90 days of occurrence can be disallowed.

Questions on the content of this document should be forwarded to The Office of Accounting and Financial Reporting at Ext. 2602