Cost Accounting Standards Disclosure Statement…

Examples

Worked examples

Is an instance
A research university whose federal award total first crosses $50 million in a fiscal year becomes subject to CAS 501, 502, 505, and 506 under 2 CFR 200.419. Consistent with the practice that predates the October 2024 Uniform Guidance revision, it maintains a DS-2-format disclosure describing exactly which cost pools it treats as direct versus F&A, and uses that document as supporting evidence when it next negotiates its F&A rate with its cognizant agency (commonly HHS's Division of Cost Allocation).
Is an instance
A university changes how it allocates a cost category -- for example, moving a category of departmental administrative salaries from indirect to direct treatment on a specific class of awards. Because CAS 502 requires that each type of cost be allocated on only one basis (direct or F&A) and applied consistently, the institution updates its DS-2-format disclosure and gives its cognizant agency advance notice of the change, regardless of whether a fresh DS-2 filing is independently mandated.

Counter-examples

Looks similar, but isn't

Not an instance
A liberal-arts college receiving $8 million a year in federal research funding never reaches the $50 million aggregate-federal-awards threshold. It is not subject to CAS 501/502/505/506 and has no disclosure obligation under 2 CFR 200.419 at all -- this isn't a case of the DS-2 form being waived, the underlying CAS applicability trigger is simply never reached.
Not an instance
An institution's Single Audit under 2 CFR 200 Subpart F is a separate compliance mechanism -- an annual, entity-wide audit of federal award expenditures, the schedule of expenditures of federal awards, and internal controls -- triggered by a different threshold ($1,000,000 in federal expenditures) and conducted by an independent auditor. It is not the same document as, and does not substitute for, cost-accounting-practice disclosure under the Cost Accounting Standards.

Editorial commentary

The Cost Accounting Standards Disclosure Statement, universally referred to by its form number, DS-2, is a document institutions of higher education (IHEs) use to describe their cost accounting practices for federally sponsored awards — specifically how they distinguish direct costs from Facilities & Administrative (F&A, i.e. indirect) costs, and how they treat cost categories such as depreciation and use allowances, leave, and deferred compensation. Its content is defined in 2 CFR Part 200, Appendix III (the F&A cost identification/assignment/rate-determination appendix for IHEs), and the underlying compliance obligation it documents is set out in 2 CFR 200.419.

Who this applies to, and at what threshold

An IHE that received an aggregate total of $50 million or more in federal awards subject to Subpart E of the Uniform Guidance during its most recently completed fiscal year is required to comply with the Cost Accounting Standards Board’s standards located at 48 CFR 9905.501, .502, .505, and .506:

CAS 501 — consistency in estimating, accumulating, and reporting costs.
CAS 502 — consistency in allocating costs incurred for the same purpose (the rule that prevents a cost from being charged as both a direct cost on one award and folded into the F&A rate applied to others — no double charging).
CAS 505 — accounting for unallowable costs.
CAS 506 — cost accounting period.

This is a deliberately narrow slice of the full Cost Accounting Standards — educational institutions are subject to only these four of the standards the CAS Board maintains for government contractors generally, not the full nineteen.

What changed on 1 October 2024

Before the Office of Management and Budget’s April 2024 revision to the Uniform Guidance, crossing the $50 million threshold created a second, standalone obligation: filing a DS-2 with the institution’s cognizant federal agency for indirect costs (with a copy to its cognizant agency for audit), and amending that filing at least six months in advance of any change to a disclosed practice. That revision, effective for awards made on or after 1 October 2024, removed the standalone DS-2 submission requirement from the regulatory text. The CAS 501/502/505/506 compliance obligation at the same $50 million threshold was not removed — only the separate mandate to file a dedicated form documenting it. In practice, institutions that were already subject to CAS continue to maintain a DS-2-format document internally, both as their own cost-accounting governance record and because cognizant agencies still rely on the same information during F&A rate negotiations — but a fresh regulatory filing obligation, independent of any specific negotiation, is no longer in force the way it was before October 2024. Content published or reused elsewhere that describes DS-2 filing as an unconditional, standalone annual or triggered requirement should be read against this change.

Cognizant agency

Review of an IHE’s disclosed cost accounting practices, and of its F&A rate proposals generally, sits with the institution’s cognizant agency for indirect costs — assigned to whichever of the Department of Health and Human Services (HHS) or the Department of Defense (via the Office of Naval Research) has provided the institution the larger share of federal funding over a recent multi-year period. HHS is the default and covers the large majority of IHEs; a much smaller number of institutions, generally those with more defense-funded research, are assigned to DOD/ONR.

Purpose: consistency, not just paperwork

The point of disclosure — whether via a standalone DS-2 filing or the DS-2-format document institutions now maintain internally — is to make an institution’s disclosed cost accounting practices auditable against its actual practices. If a cognizant agency determines that an institution’s actual practices are inconsistent with what it has disclosed (or with an applicable CAS standard) and the aggregate cost impact is material, the agency can require the institution to adjust the affected costs, and any excess amounts already paid by federal awards can be credited or refunded with interest. This is the same underlying discipline the Single Audit (2 CFR 200 Subpart F) tests from a different angle — Single Audit examines an institution’s financial statements, its schedule of expenditures of federal awards, and its internal controls annually; CAS/DS-2 disclosure specifically targets whether direct-vs-indirect cost treatment is applied consistently across every federal award, not just accurately reported after the fact.

Related CASRAI vocabulary

Single Audit (US) — the separate, broader annual audit obligation under 2 CFR 200 Subpart F.
Indirect costs (overheads) — the F&A cost category DS-2/CAS disclosure exists to govern.
Indirect cost recovery — the funding-lifecycle process this disclosure ultimately supports.
Sponsored research agreement — the award-level instrument these cost accounting obligations attach to.

Also known as

DS-2 · CASB Disclosure Statement · Cost Accounting Standards Board Disclosure Statement

Machine-readable encodings

Use in your systems

JATS XML <role> element

xml

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Schema.org DefinedTerm (JSON-LD)

json

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