[PAGE 1]
ACCCUIITIIG FOCEDURUS

COHTEITS

PAGE HO.

GEERAL... 1
REGPOISIBIITTY FORFUIDS 1
RECOROS TO RE HAITAIED 1
DFOUATICN REQUMED CDEBURSERFITS. 1 (Iiclulen Classification of Acccunts). 255
CUENISIGI CF ACCOUNTIU REPORTS.
CAS CO.....
ILIIGTATIVE SNPIE BOCS OF ACCOUIT AND FINWCIAL REPORT........ 5

famm

Jonal- EMBIT A......... 10
Receipts and Disburscments -
Sunry Acccuting-ExHIBIT B.. 11
Schelule of Advances - Schedule A. 12
Fixd Asoets - Schciule B...... 13
Schedule of Salarics - Schedule C. 14

[PAGE 2]
1. GENERAL

The eccqunting procedures in this Pannal will ba vaed by the in accmunting fer all raceipto anl disbursoments of funds for the cutire rosearch prograr.

2. RESPONGIOILIIY FOR FUNDS

While the actunl handiing of fumds ani preparatica of reports my be delegated to any qunliried enployoe of the y tho Chiof Aduinistrntive Cfficer remins reepcusible for the phiyaical sofekeeping, poper dicburcerent; and accowting fer thc funds. Nle vill gce thnt uccountins prccedures as set forth in this Hhnual aro enforced so as to prcvide all informntion necensary for proper reccrding. If ho feels that any provisicns of these acccunting prccedures are not adequnte or appropriatc, he sliculd refer the mtter to the repreçentatives of the spcnsor.

3. RDCORDO TO DE IUIITALIED

The is required te maintain a Jeunal in a boud or loose-leaf book as a peramuent roccrd of all transacticns. To emet forn of the Joutnal is cptiounl but it is reccmended timt a Jcurnal such as Exhibit A be edopted to provide maxinuncoatrol af cash and ready infonaticn for reporting putrpcses., Each tranoaction, whother a cash recsipt, a cash dioburscment, or an eccounting for an advance must be enterod in the jorral et the time the transaction occurs. Tho balancco in thc Jourual far caoh and advances mrt earee at all tims with tho actual cash cn hnd enl the accouitability for all ulvonces cutstanding.

L. INFORMATTON RUSUIRCD OI DISPURSCTIINS

To allov fcr prorer accowmting for expenses, the cceperation of evory individul ccnccrned is ecsontial in obtaining the neccsanry iuformatien anl bxenic recolpta rcquired fer nll dishurperonts. Bacicnily, to properly closnify coch disbraenent, thero rst be a reeced of the dnte of tho troasnctlon, the rre of the toyee anl the aucuit diabursed. ficcetpts, moucrandu er other vritte recorãs vill be required to substautlate cr oupport every iten of oxpenditire for viich reirbucccmut or acccunting is clnirod, cxcoyt vhere they aro not ncrnlly furnished for the type of servlce ar rerchandige cccurod. ;Ben reccipts carnct be, ar have nct boen obtained, tho indiyidwl ruiking the diobursesont vill prepore and sign o seporate statenent epplicablo to cach expenditure giving the reason far failiro to suply a receipt. Reasano will be as specifie es pessible in considcration ef all facters involved. The Chief Adninistrativ Orficor's opproml cf the ronthly cuinry aeccunting vill be dcerd to constityte appmrcvàl ef nll nuch indivilul statornts.

B13

B/3

[PAGE 3]
1. Cash Fund

This account recrrda the fluctuaticns of canh oa hond. All receipto of the incloling the cpooor's grants to tha evill bo reflected in thio nccount. Such rcetipts might be génuts frea a aponcor, return ef advancoa, cash overageo, nisccllansous refunds fron venlors, ete.

All disbursements of the vill be mde fron thia Fund. Grants from tho oponsor to tho  will be rocorded as an advance to the on the bocksof the (In effect, rants by the nponsor to the vill bo an "In and Cut"erccgrding of cash, and charged finally as on advunce to the ) See line 19, Exhibit A.

2. Cash Advances

Tis acccunt clesoification provides a mans for rocording in a chronological orler, all advances rade to employecs and others, the returù of suh advancen and/or the acccuntings fer such elvoucco.

A clear distinetion muot bo raintainod at ell timcsibetveen expenses aad advances. lioey cávancel to an euployee:as a loan cr for expenses for wliich an accounting will be given at a later date is an advance. The advances vill bo listed on Scheduio A, Sehedulo of Advances, and tbe total outotanding anount of advances vill bs oumnrized on Exiibis B, Surrary Acecumting, at the begining anl end of the accounting pariod.

Fach edvance listod will be explained briefly as to ita purpone (e.g., for lccal travel, fer enticipated operational expanse, accrued salary, etc.). Advances must indicate due dato so as to assire a fcllow up by the Chief Adniniatrative Officer.

Since all pdvances mãe romain the responsibility of the Chiof ( i strative Officer, the acccuatability for funas ill not be roduced by advanccs made, i.e., the vill total the que of all cash on hani plus outstanling odvances. liken advances are repid the acccuntiug will reflcet a receipt of funds even thcugh the accountability is not inerenred by reason of the repayrant. A net edjuctment shcula bo role botzeen the clcrento ci the accountoble balance (e.5., caah plus advancco). Wben advnocen cre accouted fer by subnissien of acceptable eviderce that the funlr advanced have boon expended, then a reccrding vill be mde to charge the apprcprlate exponse classificaticns and to reduce tho total eccountability of the advancee by the accoumting subnittcd.

A subsidlary recerd will be raintained fer each parscn that receives m advance. This subsidiary record vill ccntain a conplete record of cimrges end credits for eaeh proon. At each nonth ond, the ccriived unrald charges in the subsidiery records sheula ngrce vith tho bainace es showm in Colun (1l) of Exhibit A.

B13

ACCCCT CIAGIIFRCATION

[PAGE 4]
?. Fuanitura, Fitivea, Eantarnt nnd Roots

This expense clnosification vill be chargod for all puchnses of office or laboratory furniture, fixturos, equipoent end books. The teminology of "beoks" refers only to those of a "library" status, cuch as referenco beoks for technienl stuly.

A Fixed Aosat Reglater of all furntture, fixturozs cqulprent oa! booka purchased eháll be kept in the filos of tho Tho Register vill ahos the asnet and quantititeo therecf, the dato of purchase, thn cost and location of the ascet. A listing of cach ucnth's purchaoes of fixcd anscts will be set fcrth in Schedule B, Fixed Assets.

4. Renoleling Ccata

This expance classification vill be chargel vith all ronovaticn on? remeleling costs of the rental alte.

5. Salnrics

This expense classification vill bo charged vith the gross salaries of all employees pid out of progràn fude.

A subsidiary poyroll ledger vill be kept fe cach erployee whese salary is pil fran the funds o the research pregran. This indiviünl poyroll ledger sheat vill show the onployce's cann, the pay periol, anl for each pay period the gross ralary. Social Sneurity anl inccm tex doductions vill be a prt of the s ncccuntires and not to bo roctrüed bere. A schedule of salaries pid epch month, per individual per pay periol, vill be set forth in Schedule C, Schedule of Salnriós.

6. Travel and Lntertainnent

This ezpange clnssificaticn vill be chrged vith travel and entertainment expenaeo, vhich rhall also include qunrterg and aubsistance oxpenaes, ineurred by mesbers ef the ronearch pograny theso exponoco chnll be on an netunl, reasonabls ant ocessary basis, cxcept in upecial cases shero the Chief Adnnistrntive Officer my dcnigonte tat subsisteno conts shall be on a "per dien" banin. (Do, not clarg? to thio claostlicntio arall itams of locnl trensportaticn such ns tauticnbs, busses, ete., uleco phown on regulnr travel vouchero. Ticse mouli te pid froa the Cech Fund and qhargl to clncsifleation lio. 13, ufice and Hiscellanscur Expensen.)

HOCEI Vouehers acccmting for truvel end entertairrent navarcen will bo prepreu in dupliente and the duplicnte copies kept en file Uy the beokkoeper for subnicsicu vith the nonthly reports to tho efficials er the rosearch propan for their review and inforrtion, if desired.

7. nutlding Rent

Tala expenco clossifiention will bo eharged vith all. payrentn rade fo buildirg rental.

B13 E

B/3

3

[PAGE 5]
3. Equimoont Rental

This expense classificaticn vill be charged vith all paynents tnão for rental of technical ar laboratory equipunut.

9. .Lights,Heat, Water and Cornnications

This expenro claseification will be charged with all paynénts rnlo for lights, hent, wter, telephone, tolegrepì, cables and postage ciorges.

10. Iaboratory Supplies and Materials

This expense clnssification will be chargod vith all paymente nede for supplies anl mterials uocd in comnection with labcratory vork or mintenance.

11. Fayroll Tax Emensc

This exense classification will be charged with all payzents mndo cut of any portion of the research progran funds for taxes relative to the payroll, incluling all umomplcyment coupensation taxes.

10. Special Services

This expenso claosificaticn will be chargel with all payments mde far special services renlered to the resoarch progran (e.G., services rendered by educational institutions, or hospitulo for shich a clprge .1s mde).

13. Orfice and Miscellaneous Expenses

Tuis expcnne classificatioa will be charged vith all payments mde for office supplics and stationory, insurance preniums, niscellanecus dues and eubscriptions, smll itemo of traasportaticn (taxi and bus fares, etc.), Janitar or maid services, liceuses and tazes other than payroll, legal and eccounting fees, if any, omall repair charges in inintenance of the furniture, fixtures and equipent, and any other diobursenents far which an expense claoeification has not been providod.

M. Cach Short

This exponse classificaticn vill be charged vith all chcrtages of cash as rovealed by roriolic cash couts. Fee pragraph 6, "CASH Cou" fer further instrictiona regnrding cash shorteges. (Canh cver will be resorded es a receipt of funãa ani reported in the "Fuys Reccived" sectioa of the Sumrary Accounting.)

4

[PAGE 6]
5.SUBMISSION OF ACCOUETIN REPCRTS

B13 by toni t l de utltr h ba ly the 15th day of tho month following the accomting month. Tho repart vill consist of:

a. Receipto and Disbursemcnts - Suary Accouting, Exhibit B, pigned by the Chief Adninistrative Officer.

b. Schodule of Aavances, Schedule A.

c. Schedule of Fixed Aspato, Schedule B.

d. Schedule of Salaries, Schedule C.

B13

Aa it ia thg intentio of tho sponsor to mke fmda availablo to the rin cash, cosh counts should be rade by the cuotodian at frequent intervals (daily or veokly) to verify the physical exiotence and accuracy of cash balances. A monthly phyaical count of cash must be mnde, and if conlitions perait, tho Chier Adninistrative Officer will eppoint tvo suoh paracno, othor than the custolian of the funds, to perfcrm this function. Such perscnnel aljould be rotatel reqularly. These individuals will count the cash asof tho olose of buaineos ou the last day of cach monthly reporting poriod and afrix thoir certificatia either on the faco of the monthly 6uaary Accqumting cr cn an nttachnent thoreto wder a certificate that they have voriried the cash balance by a phyoical cout and found the asounts reportod to be correct, subject to any couments. Any ahortages or overages in cash will be shom copurately an the Suary Accounting and further, a ropert shell be attached to the Suznry Accounting outlinins all known circustances surrounding the shortago or overage, incluling action taken, if any, to lccate tha error.

7. JLLUSTATIVE SANPLE BOCS OF ACCOUIT AND FIIWICIAL REFORT

a. Sasple Transaction

There is proscntod bolov a sories of sauplo financial tronsactiono af the types poat ccmucnly occuring. These transnctions are nubcred no that their haniling in tho books of acccut ani finoncial roporting may be troced to the corresponding Iten No. cn tho illuatrative Jounal (Erhibit A) and Surnry Accomting (Exhibit B). The iaportance of the rechanics described horein canaot be over-epphacized in arder to aucuro that maximu control of funda ray be Gxercised and that spousoro my havo proper infcrmticn for efficient handling anl expeditious auliting of financial reporte.

[PAGE 7]
Item No.

Transaction

Actul cash on hand at beginniog of accouting pericd as (1) revealel by physical comit and closing balance froa tha prinr period.

Outotanding balance of all advances not accounted for or repaid at the beginning of accouwting poriod. This shoull equal anoumt shown at close of prior period.

Cash received fron oponsor.

Travol aivance made to Richard Roc for local trip (duo Qato.
5 August).

Payment for stationery and supplies for office use.

(6)Purchasa of Laboratory supplies.

(7) Paymant of lccal office telophone bill.

(8)  Partial repaynent of advanch made to Jobn Snith in prior outh.

Accounting from Joha Suith for balance of advonce.

(10)Purchasa of Office Furniture for

Faymont for remodeling cxental predises.

(12)-(17) To diatriduto the expensen as shown oí the paid invoico froms the

(18). Cash received from aponsor.

Adyice yas received that an additional €25,000 wes grented to the Line 19 reccrds the recoipt of cpsh for the procran (colun 6), the disbursement cf cash to the(colum 7), and the advance to ther(colurmn 9). Note that tho cash balance mintained in coiun O did not chango, but that tho balnnc of advances outatanding increased by \$25,000 (colimm 11).

(20) To rocord cash overage as revealed by a cash count taken on 24 July.

To racord a caoh shortage as revcaloá by a cash count taken a (21) 31 .

(22)-(23) Rot used.

Actual cash o hand and outstanding balance of all advancco aot (24) accoumtel for or repaid ao at the end of the accoumting poriod. These tvo anoumta vill be forwarded to the Journal fer August. 2

6

[PAGE 8]
b. Although it is recogized that the snuple entrioa shovn abore do not illustrate all transactions which may cccir, they should be indicative of proccasing for any transactions. Ir it is not kovn what action should be taken en any unusual tronsaction, guidance should ba roquosted through the Chief Adninistrativo Officer.

.c. laintennnce of a Jourpal

(1) The journal vill be maintained in a bomi book or on looso-lcaf journial cheets held in a dinlor which will be procured lobally. Tho Jourcal shall be colunarized to coutain tho horieoatal sprsad show in Exhibit A.

(2) To colums in the saple Jounl (Exhibit A) are nuberol (1) through (ll) as a guide to tho narrative degcriptive caunts on the mintenance of this journal as subnitted below:

Colum No.

Description

(1) Shov date entry was mde. The calendar year vill bo ahoam at the top af the colun and subsequent entries vill coutain oaly dyaxl ponth.

(2) Makd mrdef. but complete description of the transsction being recorded. Mnclule references to epecifia purpose, namo of payoe, period covored, ete. t

(3)Vouchors vill be nubored in nuoerical oequence for each fiscal year. Cn 1 July begin a nev series beginming vith the nuber l. Nmbers will be prefixed vith an "R"fcr vouchors recarding findo received and a "p" for vouchers recording funds disbnrted.

.(4) This colutm will not be usod.

(5). The appropriate expense elasaification uurber vill be inlicated for all diaburacmonts roprepenting a charge for an identifiable expenge or capital outlay.

(6) Record all cash received fra any source, incluling recciyts frcu sponaor, proceede fro cale of mterials, refumds of aúvances, otc. Also incluie gants of fumds mde to thevith u claltanoous disbursement entry in colum (7)." All entries mnãc in this colun vill increaso the cash balanco in column (8).

(7) Record in this colun all diabursepents mde fron caah, incluling local advances, and payments for lccal operations and ovtrbeal All entrieo made in this colun vill roduco the cash balanca in colum (8).

(8) The first ontry in this colun at the beginning of an accouting perial vill be the cash balance foruurded frcm the previous rxuth'a journal. As cach entry is rado during the nonth, an anout vill be entered repreaenting tho now cash balenco reflected ag a result of alaing the entry in colun (6) or subtracting the euiry in colun (7 to the mevicus cash balance. Tho apoumt shcwa ia this colun mst

9k han

[PAGE 9]
Deseription

(9) Entor in this colurn oech advance rulo for vhiich a furtbor accoumting cr refund is expected. Every tine an entry ic mdo in this colua a like entry must appear in colum (7). All entrico in thio colun vill increaso the balance in colurn (1).

(10) Enter tho anoumts of all eccountings for advances and refuio of advunceo. Evory tino a cash refumd, in whole or in port, of an advance is mde and entored in this colium, a like anomt murt be enterod in column (6). All entries in thio colum vill reduce the balance in colum (ll). As cot forth olseuhere in thia mnual, all entries in coluns (9) anl (1) vill bo reflected in a subsidinry admanco rocard mintainca for each perscn vho has recoived an advanco. At cach mauta end, tho coubined umpaid charges in tho oubaidiary recordo should agroe with tho balonco as shov au colum (1l).

(1l) The first entry in this colun at the begiming of an acccuting period vill be the balance of advances outstanding forwarlcd frou tho provious month's journal. An coch entry io modo in columo (9) and (10), the nes balance vill bo entered in this colun. Tha anount chowa in this colun vill currently rofloct the total of all outotanding advances to bo aocoumted for cr repaid. i

d. Freparaticn of Surrnry Accouting Ediibit D, and Supporting Schedules A, B, and C

(1) A Surrnry Accounting ani suppcrting echedules vill be Mepmred in triplicate frou t dsta reflected in tho journal deccribel in 7.c., above. Tho original ond ane cory vill bo given to the Chief Alcinistrative Orficor for diotribution and tho third cop will do retained in tho files of tho ic future reforenco. All receigto ana/or certfficatea in licu of recoipts supporting the total disbursennto (line 6, Exdibit D) vill be attached to tho originalof tho poathly Suzmry Acccuting

(2) The hcrizcatal linos of tho semplo Suaxry Accoumting (Exdhible D) are numberod (1) througa (9) as a guide to the narrativo dcscriptive ccements on the preparation of the nccounting set forth belcv

Itea no.

Descripticn

(1) Enter tio csoumt shown on the previouo month's journal for "Cash cun Lianl - End of Perid." :

(2) Enter tho enount shown an the previcus noth's journal for "Outstaniing Advanceg • End of Period."

(3) Enter ail fumls roceived frco any cource ciopt cash rcfurla fos advunces unde. Caah returns fras recipionts of advances do not

Colun No.

8

[PAGE 10]
affect the accomtability of the Chief Adninistrative Officer and thorefore thasa type o receipts, phould not be included in the Sumary Accounting.

Enter the totals of Itens i,.2, and 3.. Thia 1a the amout yith yhich itea 2 must Bsrea.

Sumnrize all disbursepents by expenss classifications (except those aisburoements which are cash advances) end enter in tho amomt colun ona total for each expense classification. Cash advancen rede are cuitted fron the expensa classificatias because the accomtability o the Chier Adninistrative Officer io not reduced by reaso of the caah advonce. The acoourtability is reduced aly vhen an occomting for money spent is reccrded in the books at which tine ths anount acccunted for vill be identified with the proper expense classiricatio and roported berein.

Enter the totala of the mumrarized expcuse claseirications as listed in itea 5.

Enter the cloaing cash on hand as reflected in colun (8) of tha journal anl verify by a physical cout of cash.

Enter the closing balance of advances as reflocted in colurn (1l) of the journal and verify vith the total of individual subsiliary accots. This aaoumt must equal the total as reflected in tho Schedule af Advances (Schedule A).

(9) Enter the totals of itons 6, 7, and 8. This total must oqual the total of iter 4.

(3) The certificate on the criginal of the Sumrary Accoumting, Exiihit B, may be plecod on tha Form ar my be attached to the financial reporta on a sepurzte sheot.

9

[PAGE 11]
RECEIPTS AND DISBURSEMENTS SUMMARY ACCOUNTIRG

[PAGE 13]
SchaduleA