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case western reserve university

CONTROLLER'S OFFICE

 

Cost Accounting Standards Board

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS
COVER SHEET AND CERTIFICATION

0.1 Educational Institution:
(a) Name: Case Western Reserve University
(b) Address: 10900 Euclid Avenue
(c) Cleveland, OH 44106
(d) Not applicable

0.2 Reporting Unit is:
A. ___ Independently Administered Public Institution
B. _x_ Independently Administered Nonprofit Institution
C. ___ Administered as Part of a Public System
D. ___ Administered as part of a Nonprofit System
E. ___ Other (Specify)

0.3 Official to Contact Concerning this Statement:
(a) Name and Title: Hossein Sadid, Assoc. V.P. and Controller
(b) Phone Number: 216/368-2126

0.4 Statement Type and Effective Date:
A. (Mark type of submission. If a revision, enter number)
(a) _x_ Original Statement
(b) ___ Amended Statement: Revision No. _______
B. Effective Date of this Statement: (Specify) August 10, 1996
0.5 Statement Submitted To (Provide office name, location and telephone number)
A. Cognizant Federal Agency: Department of Health and Human Services
Region VI, Dallas, TX 214/767-3261 x406
B. Cognizant Federal Auditor: Department of Health and Human Services
Region VI, Dallas, TX 214/767-3261 x406

FORM CASB DS-2 (rev 10/94) C-1

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

COVER SHEET AND CERTIFICATION

CERTIFICATION

I certify that to the best of my knowledge and belief this Statement, as amended in the case of a revision, is the complete and accurate disclosure as of the date of certification shown below by the above-named organization of its cost accounting practices as required by the Disclosure Regulations (48 CFR 9903.202) of the Cost Accounting Standards Board under U.S.C. § 422.

Date of Certification: August 10, 1996
(Signature)
Hossein Sadid
Associate Vice President and Controller
THE PENALTY FOR MAKING A FALSE STATEMENT IN THIS DISCLOSURE IS PRESCRIBED IN 18 U.S.C. § 1001
FORM CASB DS-2 (REV 10/94) C-2

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART I - GENERAL INFORMATION
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description
PART I

1.1.0 Description of Your Cost Accounting System for recording expenses charged to Federally sponsored agreements (e.g., contracts, grants and cooperative agreements). (Mark the appropriate lines(s), and if more than one is marked, explain on a continuation sheet.)

A. ___ Accrual
B. _x_ Modified Accrual Basis 1/
C. _x_ Cash Basis
D. ___ Other 1/

Integration of Cost Accounting with Financial Accounting. The cost accounting system is: (Mark one. If B or C is marked, describe on a continuation sheet the costs which are accumulated on memorandum records.)

1.2.0 A. ___ Integrated with financial accounting records. (Subsidiary cost accounts are all controlled by general ledger control accounts.)
B. ___ Not integrated with financial accounting records. (Costs data are accumulated on memorandum records.)
C. _x_ Combination of A and B

1.3.0 Unallowable Costs. Costs that are not reimbursable as allowable costs under the terms and conditions of Federally sponsored agreements are: (Mark one)

A. _x_ Specifically identified and recorded separately in the formal financial accounting records. 1/
B. ___ Identified in separately maintained accounting records or workpapers. 1/
C. ___ Identifiable through use of less formal accounting techniques that permit audit verification. 1/
D. ___ Combination of A, B or C 1/
E. ___ Determinable by other means. 1/

1.3.1 Treatment of Unallowable Costs. (Explain on a continuation sheet how unallowable costs and directly associated costs are treated in each allocation base and indirect expense pool, e.g., when allocating costs to a major function or activity; when determining indirect cost rates; or, when a central office or group office allocates costs to a segment.)

1.4.0 Cost Accounting Period: 7/1 to 6/30 (Specify the twelve month period used for the accumulation and reporting of costs under Federally sponsored agreements, e.g., 7/1 to 6/30. If the cost accounting period is other than the institution's fiscal year used for financial accounting and reporting purposes, explain circumstances on a continuation sheet.)

1.5.0 State Laws or Regulations. Identify on a continuation sheet any State laws or regulations which influence the institution's cost accounting practices, e.g., State administered pension plans, and any applicable statutory limitations or special agreements on allowance of costs.

FORM CASB DS-2 (rev 10/94) I-1

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

1.1.0 Salary and fringe expenses for non-exempt (hourly) employees are charged based on the accrual method. All exempt employee salary and benefits are charged on the cash basis. All non-salary expenses (supplies, travel, etc.) are charged on the cash basis.

1.2.0 Cost accounting records and accounts are integrated with the financial accounting system. Space inventory information and step-down allocation systems are not kept in the financial accounting system. These systems, along with the financial accounting system, are used to prepare the indirect cost rate and the schedule of federal awards.

1.3.0 Unallowable costs are those that are defined under OMB Circular A-21 (Section J), terms and conditions of the award, or any specific agency requirements. Unallowable expense classes have been established to separate out these costs.

1.3.1 Unallowable costs are not charged to sponsored projects (grants and contracts) when allocating direct costs to specific activities. Unallowable costs are tracked separately on the general ledger and removed from developing indirect cost rates. Unallowable costs are only incurred and paid for through the University's unrestricted general funds. Unallowable costs which were otherwise allowable (cost overruns on research) are cost-shared and included in the indirect cost allocation base. However, they are not included in the indirect expense pool.

1.4.0 Rates for service centers are established for a two-fiscal year period. The new rates are developed based on the estimated costs of service and carry forward over/under recovery of costs for the prior period.

1.5.0 None

FORM CASB DS-2 (rev 10/94) I-2

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - DIRECT COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University
Item No. Item Description

Instructions for Part II

Institutions should disclose what costs are, or will be, charged directly to Federally sponsored agreements or similar cost objectives as Direct Costs. It is expected that the disclosed cost accounting practices (as defined at 48CFR 9903.302-1) for classifying costs either as direct costs or indirect costs will be consistently applied to all costs incurred by the reporting unit.

2.1.0 Criteria for Determining How Costs are Charged to Federally Sponsored Agreements or Similar Cost Objectives. (For all major categories of cost under each major function or activity, such as instruction, organized research, other sponsored activities and other institutional activities, describe on a continuation sheet, your criteria for determining when costs incurred for the same purpose, in like circumstances, are treated, either as direct costs only, or as indirect costs only, with respect to final cost objectives. Particular emphasis should be placed on items of cost that may be treated as either direct or indirect costs (e.g., Supplies, Materials, Salaries and Wages, Fringe Benefits, etc.) depending upon the purpose of the activity involved. Separate explanations on the criteria governing each direct cost category identified in this Part II are required. Also, list and explain if there are any deviations from the specified criteria.)

2.20 Description of Direct Materials. All materials and supplies directly identified with Federally sponsored agreements or similar cost objectives. (Describe on a continuation sheet the principal classes of materials which are charged as direct materials and supplies.)

2.3.0 Method of Charging Direct Materials and Supplies. (Mark the appropriate line(s), and if more than one is marked, explain on a continuation sheet.) 2.3.1 Direct Purchases for Projects are Charged to Projects at:

A. ___ Actual Invoiced Costs
B. ___ Actual Invoiced Costs Net of Discounts Taken
Y. _x_ Other(s) 1/
Z. ___ Not Applicable

2.3.2 Inventory Requisitions from Central or Common, Institution-owned Inventory. (Identify the Inventory valuation method used to charge projects):

A. _x_ First In, First Out
B. ___ Last In, Last Out
C. ___ Average Costs 1/
D. ___ Predetermined Costs 1/
Y. ___ Other(s) 1/
Z. ___ Not Applicable

2.4.0 Description of Direct Personal Services. All personal services directly identified with Federally sponsored agreements or similar cost objectives. (Describe on a continuation sheet the personal service compensation costs, including applicable fringe benefits costs, if any, within each major institutional function or activity that are charged as direct personal services.)

FORM CASB DS-2 (rev 10/94) II-1

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - DIRECT COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

2.5.0 Method of Charging Direct Salaries and Wages. (Mark the appropriate line[s] for each Direct Personal Services Category to identify the method[s] used to charge direct salary and wage costs to Federally sponsored agreements or similar cost objectives. If more than one line is marked in a column, fully describe on a continuation sheet the applicable methods used.)


                                       Direct Personal Services Category

                                       Faculty Staff Students Other 1/

                                         (1)    (2)    (3)    (4)

 A.  Payroll Distribution Method                 x

  (individual time card/actual hours

  and rates)

 B. Plan-Confirmation (budgeted, planned

  or assigned work activity, updated to

  reflect significant changes)

     C. After-the-fact Activity Records    x     x      x

  (percentage distribution of employee

  activity)

 D. Multiple Confirmation Records (employee

  reports prepared each academic term, to

  account for employee's activities, direct

  and indirect charges are certified separately.)

 Y. Other(s) 1/

2.5.1 Salary and Wage Cost Distribution Systems

Within each major function or activity, are the methods marked in Item 2.5.0 used by all employees compensated by the reporting unit? (If "no," describe on a continuation sheet the types of employees not included and describe the methods used to identify and distribute their salary and wage costs to direct and indirect cost objectives.)
_x_ Yes
___ No

2.5.2 Salary and Wage Cost Accumulation System

(Within each major function or activity, describe on a continuation sheet the specific accounting records or memorandum records used to accumulate and record the share of the total salary and wage costs attributable to each employee's direct [Federally sponsored projects, non-sponsored projects or similar cost objectives] and indirect activities. Indicate how the salary and wage cost distributions are reconciled with the payroll data recorded in the institution's financial accounting records.)

FORM CASB DS-2 (rev 10/94) II-2

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - DIRECT COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

2.6.0 Distribution of Direct Fringe Benefits Costs. All fringe benefits that are attributable to direct salaries and wages and are charged directly to Federally sponsored agreements or similar cost objectives. (Describe on a continuation sheet all of the different types of fringe benefits which are classified and charged as direct costs,e.g., actual or accrued costs of vacation, holidays, sick leave, sabbatical leave, premium pay, social security, pension plans, post-retirement benefits other than pensions, health insurance, training, tuition, tuition remission, etc.)

2.6.1 Method of Charging Direct Fringe Benefits. (Describe on a continuation sheet how each type of fringe benefit cost identified in Item 2.6.0 is measured, assigned and allocated [for definitions, See 9903.302-1]; first, to the major functions, [e.g., instruction, research]; and, then to individual projects or direct cost objectives within each function.)

2.7.0 Description of Other Direct Costs. All other items of cost directly identified with Federally sponsored agreements or similar cost objectives. (List on a continuation sheet the principal classes of other costs which are charged directly, e.g., travel, consultants, services, subgrants, subcontracts, malpractice insurance, etc.)

2.8.0 Cost Transfers. When Federally sponsored agreements or similar cost objectives are credited for cost transfers to other projects, grants or contracts, is the credit amount for direct personal services, materials, other direct charges and applicable indirect costs always based on the same amount(s) or rate(s) (e.g., direct labor rate, indirect costs) originally used to charge or allocate costs to the project? (Consider transactions where the original charge and the credit occur in different cost account periods.) (Mark one. If "No," explain on a continuation sheet how the credit differs from original charge.)

_x_ Yes
___ No

2.9.0 Interorganizational Transfers. This Item is directed only to those materials, supplies, and services which are, or will be, transferred to you from other segments of the educational institution. (Mark the appropriate line(s) in each column to indicate the basis used by you, as transferee, to charge the cost or price of interorganizational transfers or materials, supplies and services to Federally sponsored agreements or similar cost objectives. If more than one line is marked in a column, explain on a continuation sheet.)


                                           Materials Supplies Services

                                               (1)      (2)      (3)

A. At full cost excluding indirect costs attributable to group of central office expenses B. At full cost including indirect costs attributable to group or central office expenses C. At established catalog or market price or prices based on adequate competition. Y. Other(s) 1/ Z. Interorganizational transfers are not x x x applicable

Note: See 3.2.0, Service Centers

FORM CASB DS-2 (rev 10/94) II-3

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

2.1.0 The University follows the OMB Circular A-21, Section D, for charging costs direct to federally sponsored agreements. Direct costs are those that can be identified specifically to federally sponsored agreements, or other similar final cost objectives, relatively easily with a high degree of accuracy through specific identification, specialized service facilities rates, proportional benefit and reclassifying. Cost can be identified to final cost objectives through specific identification, specialized service facilities rates, proportional benefit, and recharging. The University follows the criteria outlined in Section E of OMB Circular A-21 for indirect costs. Indirect costs are those that are incurred for common or joint objectives and therefore cannot be readily and specifically identified with a single federally sponsored agreement or other institutional activity. Costs incurred for the same purpose in like circumstances are treated consistently as either direct or indirect costs with respect to final cost objectives. For those types of cost which are sometimes accounted for as direct and sometimes accounted for as indirect--e.g., administrative and clerical, postage, local telephone--charging the costs as direct is determined by the difference circumstance and purpose under which they are incurred. The criteria of a different circumstance and purpose may be specific performance requirements beyond those required for routine or general support to the agreement or the costing practices specified by federal agency policy. Normally treated indirect costs that are directly charged must be specifically identified to the federally sponsored agreement and explicitly budgeted for in the award.

2.2.0 The following are the principal classes of materials which are charged as direct materials and supplies:
1. Chemicals, radioactive materials and bio-hazardous material
2. Glassware
3. Gases including cylinder rental
4. Other laboratory supplies (gloves, computer supplies, research notebooks, etc.)

2.3.1 Direct purchases for projects are charged based on actual payment to vendors which may be the invoice cost or the actual invoice cost less the early payment discount, if available. Any vendor credit received after payment is rendered is credited to the project which was charged for the original invoice.

2.3.2 To establish an inventory account, the monthly inventory balance must be $25,000 or more.

2.4.0 Direct personal services costs consist of salaries and wages plus fringe benefits of regular full time faculty, principal investigators, professional and administrative staff, temporary academic or research professionals, etc. Salaries and wages are charged directly to benefitting federally sponsored agreements based on the payroll distribution system as supported by after-the-fact effort certification for faculty and exempt staff and individual time-and-attendance sheets for nonexempt staff.

FORM CASB DS-2 (rev 10/94) II-4

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - INDIRECT COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

2.5.0 Hourly staff (non-exempt) salary and fringe are distributed based on time and attendance reports filed monthly. These reports track the actual time spent on various projects and activities. Other employee salary and fringe are distributed using an after-the-fact effort distribution system. Each month certification reports are filed by department administrators distributing PIs and other employee efforts based on the actual time spent on various projects and activities.

2.5.1 The effort distribution or time and attendance system described in Item No. 2.5.0 is not used for employees whose time is not charged to a single federally sponsored agreement or other cost objectives.

2.5.2 The distribution data is accumulated using either an Effort Distribution form or Time and Attendance form. The data from these forms are fed into the general ledger via the Salary Distribution System. Each faculty, staff or student is placed in a home department account where all related federally sponsored projects, non-sponsored projects or similar cost objectives are placed. All salaries to these activities are then allocated to specific activities (except budget 2) based on the actual time spent on these activities. The Salary Distribution System processes distribution of payroll based on actual effort and reconciles automatically the total payroll, actual payments to employees, to the total amount charged to departments at every payroll cycle. Departments receive monthly effort distribution, salary analysis and expense statements showing in detail and summary all payroll charges.

2.6.0 The following costs are included in the fringe benefit rate: FICA, retirement, life insurance, tuition benefits, severance allowance, disability insurance, benefits salary, worker's compensation, unemployment insurance, health insurance, dental insurance and consulting for benefits.

2.6.1 The university uses a single blended fringe benefit rate to allocate fringe benefits expenses to federally sponsored projects, non-sponsored projects and similar cost objectives. All salary expenses (except students) receive an allocation of fringe benefit costs at a single fixed rate. Students do not qualify for fringe benefits. The over/under recovery of fringe benefit expenses is carried forward to next year, and the fringe rate is established using the estimated fringe costs plus-or-minus, under/over recovery from the prior year. Fringe expenses in the fringe pool are actual expenses paid during the fiscal year. These expenses are allocated to actual salaries and wages paid.

2.7.0 The following are the principal classes of other costs which are charged directly:

1. Equipment
2. Outside services (consultants, salary billings from affiliates, temporary workers, subcontractors, and patient care).
3. Internal service centers (animals, machine shops, xeroxing, etc.)
4. Travel and meeting expenses
5. Other direct (postage, telephone and freight, where allowable)
6. Maintenance service contracts
7. Rentals
8. Stipends, tuition for trainees.

FORM CASB DS-2 (rev 10/94) II-5
End of Part II

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - INDIRECT COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

Instructions for Part III

Institutions should disclose how the segment's total indirect costs are identified and accumulated in specific indirect cost categories and allocated to applicable indirect cost pools and service centers within each major function or activity, how service center costs are accumulated and "billed" to users, and the specific indirect cost pools and allocation bases used to calculate the indirect cost rates that are used to allocate accumulated indirect costs to Federally sponsored agreements or similar final cost objectives. A continuation sheet should be used wherever additional space is required or when a response requires further explanation to ensure clarity and understanding.

The following Allocation Base Codes are provided for use in connection with Items 3.1.0 and 3.3.0:

A. Direct Charge or Allocation
B. Total Expenditures
C. Modified Total Cost Basis
D. Modified Total Direct Cost Basis
E. Salaries and Wages
F. Salaries, Wages and Fringe Benefits
G. Number of Employees (head count)
H. Number of Employees (full time equivalent basis)
I. Number of Students (head count)
J. Number of Students (full time equivalent basis)
K. Student Hours - classroom and work performed
L. Square Footage
M. Usage
N. Unit of Product
O. Total Production
P. More than one base (Separate Cost Groupings) 1/
Y. Other(s) 1/
Z. Category or Pool not applicable

3.1.0 Indirect Cost Categories - Accumulation and Allocation. This item is directed at the identification, accumulation and allocation of all indirect costs of the institution. (Under the column heading "Accumulation Method," insert "Yes" or "No" to indicate if the cost elements included in each indirect cost category are identified, recorded and accumulated in the institution's formal accounting system. If "No," describe on a continuation how the cost elements included in the indirect cost category are identified and accumulated. Under the column heading of "Allocation Base," enter one of the allocation base codes A through P, Y, or Z to indicate the basis used for allocating the accumulated costs of each indirect cost category to other applicable indirect cost categories, indirect cost pools, other institutional activities, specialized service facilities and other service centers. Under the column heading of "Allocation Sequence," insert 1, 2 or 3 next to each of the first three indirect cost categories to indicate the sequence of the allocation process. If cross-allocation techniques are used, insert "CA." If an indirect cost category listed in this section is not used, insert "NA.")

FORM CASB DS-2 (rev 10/94) III-1

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - INDIRECT COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description


                                        Accumulation Allocation Allocation

     Indirect Cost Category                   Method Base Code  Sequence

(a) Depreciation/Use Allowances/Interest 1 Building Yes L Equipment Yes L Capital Improvements to Land 1/ Yes L Interest 1/ Yes L (b) Operation and Maintenance Yes Y 2 (c) General Administration and General Yes D 3 Expense (d) Departmental Administration Yes D (e) Sponsored Projects Administration Yes Y (f) Library Yes P (g) Student Administration and Services Yes P (h) Other 1/

3.2.0 Service Centers. Service Centers are departments of functional units which perform specific technical or administrative services primarily for the benefit of other units within a reporting unit. Service Centers include "recharge centers" and the "specialized service facilities" defined in Section J. of Circular A-21. (The codes identified below should be inserted on the appropriate line for each service center listed. The column numbers correspond to the paragraphs listed below that provide the codes. Explain on a continuation sheet if any of the services are charged to users on a basis other than usage of the services. Enter "Z" in Column 1, if not applicable.)


                                              (1) (2) (3) (4) (5) (6)

 (a)  Scientific Computer Operations           Z

 (b)  Business Data Processing                 Z

 (c)  Animal Care Facilities                   A   A   D   A   B   B

 (d)  Other Service Centers with annual

      operating budgets exceeding $1,000,000

      or generating significant charges to

      Federally sponsored agreements, either as

      a direct or indirect cost.  (Specify below;

      use a Continuation Sheet, if necessary.)

      None                                     Z

FORM CASB DS-2 (rev 10/94) III-2

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - INDIRECT COSTS NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

(1) Category Code: Use code "A" if the service center costs are billed only as direct costs of final cost objectives; Code "B" if billed only to indirect cost categories or indirect cost pools; "C" if billed to both direct and indirect cost objectives.
(2) Burden Code: Code "A" - center receives an allocation of all applicable indirect costs; Code "B" - partial allocation of indirect costs; Code "C" - no allocation of indirect costs.
(3) Billing Rate Code: Code "A: - billing rates are based on historical costs: Code "B" - rates are based on projected costs; Code "C" - rates are based on a combination of historical and projected costs; Code "D" - billings are based on the actual costs of the billing period; Code "y" - other (explain on continuation sheet).
(4) User Charges Code: Code "A" - all users are charged at the same billing rates; Code "b" - some users are charged at different rates than other users (explain on a continuation sheet).
(5) Actual Costs vs. Revenues Code: Code "A" - billings (revenues) are compared to actual costs (expenditures) at least annually; Code "B" - billings are compared to actual costs less frequently than annually.
(6) Variance Code: Code "A" - Annual variances between billed and actual costs are prorated to users (as credits or charges); Code "B" - variances are earned forward as adjustments to billing rate of future periods; Code "C" - annual variances are charged or credited to indirect costs; Code "Y" - other (explain on a continuation sheet).

FORM CASB DS-2 (rev 10/94) III-3

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - INDIRECT COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

3.3.0 Indirect Cost Pools and Allocation Bases

(Identify all of the indirect cost pools established for the accumulation of indirect costs, excluding service centers, and the allocation bases used to distribute accumulated indirect costs to Federally sponsored agreements or similar cost objectives within each major function or activity. For all applicable indirect cost pools, enter the applicable Allocation Base Code A through P, Y, or Z, to indicate the basis used for allocating accumulated pool costs to Federally sponsored agreements or similar cost objectives.)


 Indirect Cost Pools               Allocation

                                   Base Code

 A.  Instruction

  ___  On Campus                       D

  ___  Off Campus                      Z

  ___  Other 1/                        Z

 B.  Organized Research

  ___ On Campus                        D

  ___ Off Campus                       D

  ___ Other 1/                         Z

 C.  Other Sponsored Activities

  ___  On Campus                       D

  ___  Off Campus                      Z

  ___  Other                           Z

 D.  Other Institutional Activities 1/

3.4.0 Composition of Indirect Cost Pools. (For each pool identified under Items 3.1.0 and 3.2.0, describe on a continuation sheet the major organizational components, subgroupings of expenses, and elements of cost included.)

3.5.0 Composition of Allocation Bases. (For each allocation base code used in Items 3.1.0 and 3.3.0, describe on a continuation sheet the makeup of the base. For example, if a modified total direct cost base is used, specify which of the elements of direct cost identified in Part II, Direct Costs, that are included, e.g., materials, salaries and wages, fringe benefits, travel costs, and excluded, e.g., subcontract costs over first $25,000. Where applicable, explain if service centers are included or excluded. Specify the benefitting functions and activities included. If any cost objectives are excluded from the allocation base, such cost objectives and the alternate allocation method used should be identified. If an indirect cost allocation is based on Cost Analysis Studies, identify the study and fully describe the study methods and techniques applied, the composition of the specific allocation base used, and the frequency of each recurring study.)

FORM CASB DS-2 (rev 10/94) III-4

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART II - INDIRECT COSTS NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

3.6.0 Allocation of Indirect Costs to Programs That Pay Less Than Full Indirect Costs. Are appropriate direct costs of all programs and activities included in the indirect cost allocation bases, regardless of whether allocable indirect costs are fully reimbursed by the sponsoring organizations?

A. _x_ Yes
B. ___ No 1/

1/ Describe on a continuation sheet

FORM CASB DS-2 (rev 10/94) III-5

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

3.1.0 (a) Capital improvements to land are classified as expenses if they are below $100,000. If capitalized, they are treated similarly to other capital projects.
Interest is expensed as it is paid. The initial capitalized interest is included in the construction cost and depreciated over the life of the asset.
3.1.0 (b) Operation and maintenance expenses are allocated using two different methods. Utility expenses are allocated based on an energy study performed during the base year. The study determines the actual factors of energy consumption in various classes of space. Other maintenance expenses are allocated based on square footage.
3.1.0 (e) The University allocates these costs based on a weighted modified total direct cost.
3.1.0 (f) The University follows the guidelines outlined in OMB Circular A-21 for allocating library costs.
3.1.0 (g) The University allocates these costs based on graduate student salaries with consideration given to the dual role of graduate students.
3.2.0 As of June 30, 1995, the Animal Care facility is the only service center at CWRU which has an operating size exceeding $500,000. Per the University's service center policy, service centers with an operating budget of $500,000 or more are required to establish their rates using both direct and indirect costs.

FORM CASB DS-2 (rev 10/94) III-6

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

3.4.0 The following components, subgrouping of expenses, and elements of cost are included in the University's indirect cost pools:
Building Depreciation Depreciation on some buildings is allocated on a room-by-room basis based on net square feet. Depreciation on other buildings is allocated on a building-wide basis based on net square feet.
Fixed Equipment Use The University has elected to take Equipment Use rather than depreciation on the fixed equipment portion of the sixteen componentized buildings.
Movable Equipment Use The University has elected to take equipment use rather than depreciation on its movable equipment. Equipment use is calculated on a room-by-room basis for 21 buildings. Equipment use for the remaining buildings is calculated on a building-by-building basis.
Interest Interest payments on funds borrowed from external sources for the construction of buildings are allocated on the square foot basis.
Operations and Maintenance Includes all salary and nonsalary expenses for maintaining University facilities and grounds. Major nonsalary expenses are utilities and supplies. Utility usage is determined on a room-by-room basis. The University allocates non-utility costs to individual buildings and then further allocates the costs based upon square feet. O&M costs that cannot be identified with specific buildings are accumulated and then allocated on a campus-wide basis.
General Administration Includes salaries and nonsalary expenses for accounting, provost, finance and treasurer, human resources and other support activities. The University allocates these costs to all functions of the University based upon a modified total direct cost basis.
Departmental Administration Includes academic administrative support and deans offices. The University allocates these costs on a department-by-department basis. The University has used a DCE calculation to arrive at the amount of non-salary expenses in each department.
Sponsored Projects Administration The University allocates these costs on a weighted modified total direct cost basis.
Library Includes all library expenses of salary and nonsalary type. The University allocates these costs in accordance with the guidelines in Circular A-21.
Student Services The University allocates these costs based upon the allocation of Graduate Student Salaries taking into account the dual role of students.

FORM CASB DS-2 (rev 10/94) III-7

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

3.5.0 The allocation base codes used in Item 3.1.0 have the following cost components and functions. These areas don't include any cost center costs.
Allocation base L: depreciation/ allowance/interest for buildings, equipment, capital improvements and interest.
Allocation base Y: all salary and nonsalary expenses of maintaining facilities are included. Major categories of nonsalary expenses are utilities and supplies. The functional areas included here are all plant operations, safety and security.
Allocation base D: includes salaries and wages, fringe benefits, travel costs, supplies and excludes nonallowable expenses, e.g., alcohol, development and fundraising), equipment, subcontract costs of $25,000, patient care, etc.
Allocation base E: includes salaries and wages, supplies, books, periodicals and other nonsalary expenses, excluding nonallowable expenses and equipment. General administration includes all general support activities of the University, including accounting, provost, financial services and human resources. Departmental administration includes academic administrative support services, such as deans' offices. The sponsored project administration consists of the research administration office.
The allocation base codes used in Item 3.3.0 have the following cost components and functions. These areas don't include any cost center costs.
Allocation base D: On campus instruction includes all salaries and wages, fringe benefits, supplies, and travel; it excludes equipment, subcontract costs over $25,000, and nonallowable expenses. These costs are captured in the account system through separate budget codes.
Organized research includes all salaries and wages, fringe benefits, supplies, travel and other nonsalary expenses; it excludes equipment, renovation, subcontract costs of $25,000 and nonallowable expenses. These costs are recorded under separate accounting codes.

FORM CASB DS-2 (rev 10/94) III-8

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

3.5.0 Allocation base D: (continued)

Other sponsored activities include salaries and wages, fringe benefits, supplies, travel and other nonsalary expenses; it excludes equipment, nonallowable expenses, subcontract costs over $25,000, patient care, etc. Again, these costs are tracked separately on the University's books.

Allocation methods for each cost component are described in 3.4.0 above.

FORM CASB DS-2 (rev 10/94) III-9

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART IV - DEPRECIATION AND USE ALLOWANCES NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

Part IV

4.1.0 Depreciation Charged to Federally Sponsored Agreements or Similar Cost Objectives. (For each asset category listed below enter a code from A through C in Column (1) describing the method of depreciation; a code from A through D in Column (2) describing the basis for determining useful life; a code from A through C in Column (3) describing how depreciation methods or use allowances are applied to property units; and Code A or B in Column (4) indicating whether or not the estimated residual value is deducted from the total cost of depreciable assets. Enter Code Y in each column of an asset category where another or more than one method applies. Enter Code Z in Column (1) only if an asset category is not applicable.)


                                    Depreciation Useful Property Residual

     Asset Category                     Method    Life    Unit    Value 

 (a) Land Improvements                     N/A     N/A     N/A     N/A

 (b) Buildings                             A       C       A       B

 (c) Building Improvements                 A       C       A       B

 (d) Leasehold Improvements                A       C       A       B

 (e) Equipment                             C       D       A       B

 (f) Furniture and Fixtures                C       D       A       B

 (g) Automobiles and Trucks                C       D       A       B

 (h) Tools                                 N/A     N/A     N/A     N/A

 (i) Enter Code Y on this line if other

  asset categories are used and

  enumerate on a continuation sheet

  each such asset category and the

  applicable codes.  (Otherwise

  enter Code Z.)                           Z       B       Z       Z

Column (1)-Depreciation Method Code Column (2)-Useful Life Code A. Straight Line A. Replacement Experience B. Expensed at Acquisition B. Term of Lease C. Use Allowance C. Estimated Service Life Y. Other or more than one method 1/ D. As presented for use allowance by Office of Management and Budget Circular No. A-21

Column (3)-Property Unit Code Column (4)-Residual Value Code
A. Individual units are accounted for separately A. Residual value is deducted B. Applied to groups of assets with similar B. Residual value service lives is not deducted Y. Other or more C. Applied to groups of assets with varying than one method 1/ service lives Y. Other or more than one method 1/ 1/ Describe on a Continuation Sheet

FORM CASB DS-2 (rev 10/94) IV-1

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART IV - DEPRECIATION AND USE ALLOWANCES
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

4.1.1 Asset Valuations and Useful Lives. Are the asset valuations and useful lives used in your indirect cost proposal consistent with those used in the institution's financial statements? (Mark one.)
A. _x_ Yes
B. ___ No 1/

4.2.0 Fully Depreciated Assets. Is a usage charge for fully depreciated assets charged to Federally sponsored agreements or similar cost objectives? (Mark one. If yes, describe the basis for the charge on a continuation sheet.)
A. _x_ Yes
B. ___ No

4.3.0 Treatment of Gains and Losses on Disposition of Depreciable Property. Gains and losses are: (Mark the appropriate line or lines; if more than one are marked, explain on a continuation sheet.)

A. ___ Excluded from determination of sponsored agreement costs
B. ___ Credited or charged currently to the same pools to which the depreciation of the assets was originally charged.
C. ___ Taken into consideration in the depreciation cost basis of the new items where trade-in is involved.
D. ___ Not accounted for separately but reflected in the depreciation reserve account.
Y. ___ Other(s) 1/
Z. _x_ Not applicable

4.4.0 Criteria for Capitalization. (Enter [a] the minimum dollar amount of expenditures which are capitalized for acquisition, addition, alteration, donation and improvement of capital assets, and [b] the minimum number of expected life years of assets which are capitalized. If more than one dollar amount or number apply, show the information for the majority of your capitalized assets and enumerate on a continuation sheet the dollar amounts and/or number of years for each category or subcategory of assets involved which differs from those for the majority of assets.)

A. Minimum Dollar Amount $500
B. Minimum Life Years 2 yrs.

4.5.0 Group or Mass Purchase. Are group or mass purchases (initial complement) of similar items, which individually are less than the capitalization amount indicated above, capitalized? (Mark one.)

A. ___ Yes 1/
B. _x_ No
1/ Describe on a Continuation Sheet

FORM CASB DS-2 (rev 10/94) IV-2

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

4.2.0 For fully depreciated assets, use allowance on buildings, building improvements, and leasehold improvements are calculated according to Circular A-21, J.12 (c).

FORM CASB DS-2 (rev 10/94) IV-3
End of Part IV

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART V - OTHER COSTS AND CREDITS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

Part V

5.1.0 Method of Charging Leave Costs. Do you charge vacation, sick, holiday and sabbatical leave costs to sponsored agreements on the cash basis of accounting (i.e., when the leave is taken or paid), or on the accrual basis of accounting (when the leave is earned)? (Mark applicable line[s].)

A. _x_ Cash
B. _x_ Accrual 1/

5.2.0 Applicable Credits. This item is directed at the treatment of "applicable credits" as defined in Section C of OMB Circular A-21 and other incidental receipts (e.g., purchase discounts, insurance refunds, library fees and fines, parking fees, etc.). (Indicate how the principal types of credits and incidental receipts the institution receives are usually handled.)

A. _x_ The credits/receipts are offset against the specific direct or indirect costs to which they relate.
B. ___ The credits/receipts are handled as a general adjustment to the indirect pool.
C. ___ The credits/receipts are treated as income and are not offset against costs.
D. Combination of methods 1/
Y. Other 1/

FORM CASB DS-2 (rev 10/94) V-1

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

5.1.0 Hourly staff (non-exempt) leave costs are charged to sponsored agreements on the accrual basis. All other employees leave costs are charged on the cash basis.

FORM CASB DS-2 (rev 10/94) V-2
End of Part V

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

PART VI - DEFERRED COMPENSATION AND INSURANCE COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

Instructions for Part VI

This part covers the measurement and assignment of costs for employee pensions, post retirement benefits other than pensions (including post retirement health benefits) and insurance. Some organizations may incur all of these costs at the main campus level or for publication situations at the governmental unit level, while others may incur them at subordinate organization levels. Still others may incur a portion of these costs at the main campus level and the balance at subordinate organization levels.

Where the segment (reporting unit) does not directly incur such costs, the segment should, on a continuation sheet, identify the organizational entity that incurs and records such costs. When the costs allocated to Federally sponsored agreements are material, and the reporting unit does not have access to the information needed to complete an item, the reporting unit should require that entity to complete the applicable portions of this Part VI. (See Item 4, Page (i), General Instructions.)

6.1.0 Pension Plans

6.1.1 Defined-Contribution Pension Plans. Identify the types and number of pension plans whose costs are charged to Federally sponsored agreements. (Mark applicable line[s] and enter number of plans.)

Type of Plan Number of Plans
A. Institution employees participate in State/Local Government Retirement Plan(s)
B. x Institution uses TIAA/CREF plan or other
defined contribution plan that is managed
by an organization not affiliated with the
institution. one

C. Institution has its own Defined-Contribution

Plan(s) 1/

6.1.2 Defined-Benefit Pension Plan. (For each defined-benefit plan, other than plans that are part of a State or Local government pension plan, describe on a continuation sheet the actuarial cost method, the asset valuation method, the criteria for changing actuarial assumptions and computations, the amortization periods for prior service costs, the amortization periods for actuarial gains and losses, and the funding policy.)

6.2.0 Post Retirement Benefits Other Than Pensions (including post retirement health care benefits) (PRBs). Identify on a continuation sheet all PRB plans whose costs are charged to Federally sponsored agreements. For each plan listed, state the plan name and indicate the approximate number and type of employees covered by each plan.)

Z. Not Applicable

FORM CASB DS-2 (rev 10/94) VI-1

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679

EDUCATIONAL INSTITUTIONS PART VI - DEFERRED COMPENSATION AND INSURANCE COSTS
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

6.2.1 Determination of annual PRB costs. (On a continuation sheet, indicate whether PRB costs charged to Federally sponsored agreements are determined on the cash or accrual basis of accounting. If costs are accrued, describe the accounting practices used, including actuarial cost method, the asset valuation method, the criteria for changing actuarial assumptions and computations, the amortization periods for prior service costs, the amortization periods for actuarial gains and losses, and the funding policy.)

6.3.0 Self-Insurance Programs (Employee Group Insurance). Costs of the self-insurance programs are charged to Federally sponsored agreements or similar cost objectives: (Mark one)

A. _x_ When accrued (book accrual only)
B. ___ When contributions are made to a nonforfeitable fund
C. ___ When contributions are made to a forfeitable fund
D. ___ When the benefits are paid to an employee
E. ___ When amounts are paid to an employee welfare plan
Y. ___ Other or more than one method 1/
Z. ___ Not applicable

6.4.0 Self-Insurance Programs (Worker's Compensation, Liability and Casualty Insurance)

6.4.1 Worker's Compensation and Liability. Costs of such self-insurance programs are charged to Federally sponsored agreements or similar cost objectives: (Mark one)

A. ___ When claims are paid or losses are incurred (no provision for reserves)
B. _x_ When provisions for reserves are recorded based on the present value of the liability.
C. ___ When provisions for reserves are recorded based on the full or undiscounted value, as contrasted with present value, of the liability.
D. ___ When funds are set aside or contributions are made to a fund.
Y. ___ Other or more than one method 1/
Z. ___ Not applicable

6.4.2 Casualty Insurance. Costs of such self-insurance programs are charged to Federally sponsored agreements or similar cost objectives: (Mark one.)

A. ___ When losses are incurred (no provision for reserves)
B. _x_ When provisions for reserves are recorded based on replacement costs.
C. ___ When provisions for reserves are recorded based on reproduction costs new less observed depreciation (market value) excluding the value of land and other indestructibles.
D. ___ Losses are charged to fund balance with no charge to contracts and grants (no provision for reserves)
Y. ___ Other or more than one method 1/
Z. ___ Not applicable
1/ Describe on a Continuation Sheet.

FORM CASB DS-2 (rev 10/94) VI-2

8/10/96
COST ACCOUNTING STANDARDS BOARD
DISCLOSURE STATEMENT
REQUIRED BY PUBLIC LAW 100-679
EDUCATIONAL INSTITUTIONS

CONTINUATION SHEET
NAME OF REPORTING UNIT:
Case Western Reserve University

Item No. Item Description

6.1.2 The University has benefit plans covering substantially all of its full time employees. Under the University's defined contribution plans, annual contributions for the insured annuity plans for faculty and key administrative personnel are determined principally as a fixed percentage of annual compensation and are funded currently. Other employees have a defined benefit plan which provides for benefits based on length of continuous service and a fixed percentage of annual compensation. The University's policy is to fund at least the minimum amount required by ERISA.

6.2.0 In addition to the University's retirement plans, University retirees and their spouses are eligible to benefit from the University's employee tuition plan for life. Retirees' dependents are eligible for eight years after retirement of the employee. The University believes the post-retirement tuition benefit does not result in an additional expense to the University. As such, no accrued liability has been reported in the balance sheet for the retirees tuition benefit program. In addition, retirees are eligible to participate in the University's medical and dental health plans and are required to pay in full for enrollment in those plans. It is not practical to determine the present value of the University's obligation to provide retirees with the University's group health rate without incurring significant additional costs. Furthermore, there is no evidence that the retiree's portion of the health plans causes an increase in the overall medical and dental plan rates.

FORM CASB DS-2 (rev 10/94) VI-3
End of Part VI