Research Administration Office

University of California

Memo Operational Guidance

No. 82-11

January 20, 1981

The following is provided as operational guidance.

EXCESSIVE DETAIL AND DOCUMENTATION REQUESTED ON DOD COST-REIMBURSEMENT CONTRACT VOUCHERS

The Berkeley campus Accounting Office recently brought to our attention a DOD request for excessive voucher detail on a cost-reimbursement contract with the Army Waterways Experiment Station (WES) in Vicksburg, Mississippi (Attachment 1).

This office challenged the requested detail as excessive, unreasonable, and more properly handled through the audit function, in a letter to Dr. Schooling, the Army DAR Council Representative (Attachment 2).

Colonel Gilkey, Office of the Chief of Engineers, has now responded in a December 17, 1981 letter (Attachment 3), agreeing that the original request was excessive.

A copy of Colonel Gilkey's letter is being internally distributed to all Corps contracting offices. Campuses may find this letter helpful in convincing other DOD procurement offices not to make demands for excessive detail on vouchers.

The Vicksburg WES continues to ask for voucher documentation supporting summer salaries. This is a result of the Department of Health and Human Service' s challenge to the University's calculation of summer salaries. The Berkeley campus Accounting Office has agreed to submit such documentation, consisting of a single calculation which will indicate the base salary, the summer period worked and the resulting voucher amount.

Though some voucher documentation will be provided in this particular case, all requests for unreasonable voucher detail should continue to be strongly resisted.

Refer: J. Acanfora, 8-582-1638

Attachments

cc: Associate Accounting Officer W.R. Anderson

Council on Governmental Relations

Index:

Accounting

Cost-Reimbursement Contracts

Department of the Army

David F. Mears

University Contracts and Grants Coordinator


ATTACHMENT 1

DEPARTMENT OF THE ARMY CORPS OF ENGINEERS, WATERWAYS EXPERIMENT STATION

P.O. BOX 631

VICKSBURG, MISSISSIPPI 39180

SUBJECT: Required Detail for Interim Billings Under Cost Reimbursable Contracts.

CONTRACTOR: University of California

CONTRACT NO.: DACW 39-81-C-0024

Due to a recent regulation change, we are being required to obtain additional detail with billings received under cost reimbursable contracts. Accordingly, it is requested that future invoices submitted by your office contain, as a minimum, the following information:

A. Direct Costs.

1. Labor - Employee name, labor classification, rate of pay, hours worked, and amount paid.

2. Material - Description and unit price of each item of material installed on the project.

3. Equipment - Description, quantity and purchase price of each piece of equipment.

4. Travel - Employee name, destination, purpose, dates of travel, airfare or mileage, including rate, and per diem rate or actual cost of meals or lodging.

5. Subcontractor Payments - Name of subcontractor, and date and amount of payments (attach copy of subcontractor's invoice).

6. Other - Sufficient information to identify type of cost and basis for amount billed.

B. Indirect Costs. Each type of indirect cost should be identified along with the rates and/or amounts billed and the basis of the rate computation.

If you have any questions concerning this request, please contact Vincent Russo or the undersigned at (601)-634-2583 or 2138.

K. L. NEUGEBAUER

Chief, Audit Branch


ATTACHMENT 2

October 30, 1981

Dr. Roy L. Schooling

DAR Council Representative

Office of the Assistant Secretary

(Research, Development and Acquisition)

Department of the Army Headquarters

Washington, D.C. 20310

Subject: Excessive Information Request by the Waterways Experiment Station, Corps of Engineers, for Contract No. DACW 39-81-C-0024

Dear Dr. Schooling:

We have a matter involving the Army Waterways Experiment Station in Vicksburg, Mississippi which we believe should be brought to your attention for a policy call.

The issue is about the degree of documentation required to be submitted with cost reimbursement vouchers to DOD. Our view is that we should provide summary cost data by cost elements as defined on the DD 633-4. We should not have to submit documentation of detailed expenditures along with the voucher. If proof of expenditures is required, the proper procedure is to conduct an on site audit. It is inconsistent with DOD and Federal-wide procurement practice to require full documentation of all costs billed with each voucher.

The specific case in point is based on the attached August 18, 1981 letter signed by K.L. Neugebauer, Chief, Audit Branch, Department of the Army, Waterways Experiment Station, Corps of Engineers, to the University of California. The letter requests that exhaustive detail be provided by the University in all future invoices submitted under the referenced research contract.

We believe the excessive documentation as required by the Army Waterways Experiment Station is improper as a routine practice. This Station should accept the billings as submitted by the University in accordance with the financial systems approved by our cognizant Federal Audit Agency DHHS. DHHS has reviewed the University's central computerized billing system and has judged it to be valid and reasonable. Our system provides monthly invoices, detailed by the following categories: Salaries and Wages, Supplies and Expenses, Equipment, Travel, Employee Benefits, Overhead, and Subcontracts. Because the University currently receives research support from over 100 components of the Federal government through over 10,000 active contracts and grants, it cannot reasonably be expected that we comply with the varied demands of each local Federal procurement office for unique voucher detail.

If the Vicksburg Waterways Experiment Station desires an audit of this particular contract's expenditures, there exist established Federal and DOD procedures and forms which should be utilized. It is inappropriate for this to he accomplished through the billing process.

At a time when there is a national mandate as well as Presidential direction and DOD initiatives to control excessive Federal paperwork requirements, it is important that the DAR Council review local excesses imposed on DOD contractors such as the present case,

We ask that you review requirements imposed in the attached letter and determine whether the degree of documentation required as a matter of routine is in accord with DOD policy, We would appreciate hearing from you as to your findings, and would also appreciate knowing what the published DOD policy is with respect to voucher documentation. If you find that the documentation required in the Attachment is excessive we request that internal action he taken to allow us to continue to submit vouchers using the standard procedures and formats which we currently use with all other civilian and DOD agencies.

This is a matter of some urgency since the Vicksburg Station appears to be unwilling to pay vouchers without the excessive documentation being s submitted.

David F. Mears

University Contracts and Grants Coordinator

University of California

2200 University Avenue

Berkeley, California 94720

Attachment

cc:

K.L. Neugebauer

University Controller Pastrone

Associate Accounting Officer W. R. Anderson

Accounting Manager Santos

Council on Governmental Relations


ATTACHMENT 3

DEPARTMENT OF THE ARMY

OFFICE OF THE CHIEF OF ENGINEERS WASHINGTON, D.C. 20314

DAEN-RMA

17 December 1981

David F. Mears

University Contracts and Grants Coordinator

University of California

2200 University Avenue

Berkeley, California 94720

Dear Mr. Mears:

This is in reply to your letter of October 30, 1981 to Dr. Roy L. Schooling, DAR Council Representative, Office of the Assistant Secretary of the Army (Research, Development and Acquisition) regarding excessive information requested by the U.S. Army Engineer Waterways Experiment Station (WES) under Contract DACW 39-81-C-0024.

The amount of documentation required to support reimbursement vouchers will vary from contract to contract. Contracting offices are responsible for determining the amount of detail necessary to support each voucher. Under the Allowable Cost and Payment clause, authorized representatives of the contracting officer may require the contractor to submit an invoice or public voucher supported by a statement of costs "in such form and reasonable detail as such representative may require,..." Normally Corps contracting officers only require summary data to support interim vouchers from universities with Federally approved accounting and billing procedures.

The Department of Health and Human Services (DHHS) auditors have advised us that the University of California's procedures for charging part-time summer salaries to Federal contracts are questionable. Whenever deficiencies are reported in an institution's accounting or billing procedures, additional documentation may be required, However, in this case, we believe that WES should have limited their request for supporting documentation to the minimum necessary to support the part-time summer salaries charged to Corps contracts.

We have discussed this issue with Mr. Neugebauer, Chief, Audit Branch, WES and he agrees that the documentation noted above will be sufficient to support the University's billings under Contract DACW 39-81-C-0024. In the meantime WES has continued to process the University's requests for payment under this contract and will continue to do so without requiring all of the detail initially requested. If you have any further questions regarding this contract, they should be addressed directly to the contracting officer at WES.

A copy of this letter is being distributed to all Corps contracting offices for information and implementation as necessary. You should provide the necessary documentation to support part-time summer salaries charged to any Corps contract until such time as the DHHS auditors determine that your procedures for accumulating and charging these costs are proper. Upon receipt of such a determination by the auditors, we will revise our documentation requirements accordingly.

Sincerely,

Colonel, Corps of Engineers

Chief, Resource Management Office

CF: SARDA

ATTN: Dr. Schooling