exploring research administration from concept to commercialization

EXPLORING RESEARCH ADMINISTRATION FROM

CONCEPT TO COMM

ERCIALIZATION

POST AWARD SESSION 1: COST SHARE

Presented by:Jane Gentilini Mary Stanley

OBJECTIVES Cost Share – defined Why Cost Share Regulatory Compliance Cost Share – UCF’s policy Sources of Cost Share Documenting Cost Share Cost Share at the Proposal Phase Cost Share at the Award Phase

NAVIGATING COST SHARE

COST SHARE

COST SHARE DEFINED “Cost sharing or matching means that portion of

project or program costs not borne by the Federal Government.” (OMB Circular A-110, A.2.(i))

Cost sharing as committed resources that are not funded in a research agreement by the sponsoring agency.

COST SHARE

WHY COST SHARE? Cost sharing has been a feature of the government-university partnership in

science for many decades.

A government view was that since federal support of research confers important benefits to universities then universities should share in the costs of research.

The benefits to universities include educational and financial benefits to students and professional benefits for faculty.

Universities also enjoy the prestige and standing associated with federally-supported research programs, as well as income from patent and licensing activity.

COST SHARE

WHY COST SHARE? Cost share offers a way to leverage funds, both for the

university and the sponsoring agency.

Cost sharing may also demonstrate that the institution is willing to partner with sponsoring agencies in the achievement of goals for their mutual benefit.

Cost sharing can be a way to promote and achieve specific institutional goals connected to strategic policy such as increasing the institution’s research capacity.

Some federal programs include cost share that is mandated by Congress.

COST SHARE

FINANCIAL & ADMINISTRATIVE IMPLICATIONS OF COST SHARE

The university’s commitment of cost share represents a use of resources no longer available for other activities.

These resources can include funds for salaries/fringe benefits, travel, supplies, etc.

The cost of the foregone F&A.

Downward pressure on the university’s F&A rate by increasing the “denominator” of the organized research base.

The use of financial and administrative resources for monitoring compliance with cost share commitments can be considerable.

COST SHARE

CONSEQUENCES FOR COST SHARE NONCOMPLIANCE

Committed cost share imposes legal and auditable obligations on the university.

Not fully meeting committed cost share can result in a return of funds to the sponsor, sanctions, and loss of reputation for the university.

COST SHARE

REGULATORY REQUIREMENTSOMB Circular A-110 provides the administrative

standards for managing cost share, including cost share criteria, valuation standards, and documentation requirements.

OMB Circular A-21 provides the cost principles used for meeting cost share commitments.

COST SHARE

OMB CIRCULAR A-110 C.23 COST SHARING OR MATCHING

(a) All contributions, including cash and third party in-kind, shall be accepted as part of the recipient's cost sharing or matching when such contributions meet all of the following criteria.

(1) Are verifiable from the recipient's records.

(2) Are not included as contributions for any other federally-assisted project or program.

(3) Are necessary and reasonable for proper and efficient accomplishment of

project or program objectives. (4) Are allowable under the applicable cost principles.

COST SHARE


(5) Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.

(6) Are provided for in the approved budget when required by the

Federal awarding agency. (7) Conform to other provisions of this Circular, as applicable.

(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.

COST SHARE


Valuation of cost sharing is described further in section C.23 for: Recipient contributions of services and property Volunteer services 3rd party employee services Donated supplies

Documentation requirements for in-kind contributions from 3rd parties are described.

COST SHARE

COSTING REQUIREMENTS FOR COST SHARE OMB Circular A-110 C.23.(c): “Values for recipient contributions of services and property shall be established in

accordance with the applicable cost principles.”

Consistent with OMB Circular A-21, costs must be allowable, necessary, reasonable and allocable to be eligible as cost share.

Generally, if a cost is allocable to the sponsored project, it may be used for cost share. The converse is true, as well.

The cost accounting standards are applicable to cost share.

Expenditures must be incurred within the project period in order to be eligible for cost share.

COST SHARE

COSTING REQUIREMENTS FOR COST SHARE

Cost share obligations may be met only through available expenditures, not available funding.

Expenditures used for cost share may be used only once.

Cost share may not be met by federal sources, with rare exceptions.

Cost share must be recorded, monitored and reported in accordance with university requirements.

Cost Share

TYPES OF COST SHARERequired Cost Sharing- Also known as "mandatory cost sharing" refers to cost sharing that is or becomes part of the award eligibility criteria.

Voluntary Cost Sharing- This cost share is not required by the sponsor but is quantified by the PI in a proposal and therefore becomes legally binding ("Required Cost Sharing") once awarded.

Uncommitted Voluntary Cost Sharing- This cost sharing refers to research costs not funded by the sponsor and not committed in the proposal.

COST SHARE

HOW DO I KNOW IF IT HAS TO BE TRACKED?

TYPE SOURCE DOCUMENT TRACKED

Required Cost Sharing Guidelines, Proposal (Narrative or Budget) & Award

Yes

Voluntary Cost Sharing Proposal (Narrative or Budget) & Award

Yes

Uncommitted Voluntary Cost Sharing

Proposal Only (Narrative and not quantified)

No

COST SHARE

SOURCES OF COST SHARE1. UCF Cash – (College, Department, ORC, etc.)2. Foregone F&A (Overhead) – Calculation based upon our

federally negotiated F&A rate and applied to #1 above.3. Unrecovered Overhead – Calculation based upon the

difference between F&A allowed to be charged on agency funds and our federally negotiated rate.

4. Subcontractor(s)5. 3rd Party In-kind6. 3rd Party Cash

COST SHARE

LIFE CYCLE OF COST SHARING

Proposal Award Financial Compliance

COST SHARE


CONCEPT TO COMM

ERCIALIZATION

PROPOSAL RESPONSIBILITIES


PROPOSAL RESPONSIBILITIESPrincipal Investigator Office of Research and Commercialization

Review program guidelines to determine whether cost sharing is required and consider available resources required to complete the projects objectives

Review program guidelines to determine whether cost sharing is required

Consult with the Department Chair or Dean to verify that adequate financial and staff resources are available and obtain cost share commitments from Department Chairs and Deans as applicable

Review scope of work and budget narrative to determine if voluntary cost share is presented in quantitative terms

Obtain commitment letters for cost share from subcontractors and other 3rd party entities providing cash or in-kind

Review PTF cost sharing commitments as well as approvals, commitment letters, etc. to ensure all cost sharing is properly committed and documented

COST SHARE

PROPOSAL RESPONSIBILITIESProposal Managers/Coordinators should ensure all cost sharing commitments are properly documented as follows:

Type of Cost Share

Source Documentation

Departmental Cost Share (Cash)

PTF Approving College/Department Signature and source account number that will be used to fund the cost share accounts

ORC Cost Share (Cash) PTF approving signature from Pre-Award personnel for commitments up to the standard level of cost share as authorized by Dr. O’Neal; All exceptions should be documented by an e-mail approval from Dr. O’Neal or Dr. Soileau

Foregone F&A Should be identified in the cost share budget submitted to the sponsor

Unrecovered F&A Should be identified in the cost share budget submitted to the sponsor

Subcontractor Cost Share Should be documented in the subcontractor’s proposal and signed by an authorized representative of the subcontractor

3rd Party Cash Should be described and quantified in a letter of commitment from the 3rd party which should be signed by an authorized representative of the 3rd party

3rd Party In-kind Should be described and quantified in a letter of commitment from the 3rd party which should be signed by an authorized representative of the 3rd party

COST SHARE

PROPOSAL RESPONSIBILITIESSummary:UCF policy requires that all cost sharing plus any voluntary cost sharing must either be specifically identified in the proposal, narrative or by a separate form accompanying the proposal during internal routing and approvals. ALL proposed cost share must be budgeted, recorded and substantiated by supporting documentation.

ALL cost sharing commitments must be documented on or attached to the PTF and signed by the responsible party for the commitment.

Commitment letters from subcontractors and other 3rd parties, signed by an authorized signatory of the 3rd party, should be on file with the proposal document.

COST SHARE


CONCEPT TO COMM

ERCIALIZATION

AWARD MANAGEMENT


AWARD MANAGEMENT RESPONSIBILITIES

1. Resolve discrepancies between the University’s proposal and the sponsoring agency’s award notice, as necessary.

2. Establish a companion cost share account (in conjunction with Finance and Accounting) to record and document sponsored project “matching” costs allowable by the University.

3. Submit a cost share memo (See Packet for a sample memo) to the PI responsible for the sponsored project detailing procedures on the treatment of costs, informing of next steps to be taken, and how to comply with Federal and State requirements, and UCF Internal Auditors.

4. Send the “Award Funding” report to the PI and Finance and Accounting which lists the account created related to the sponsored project (both C&G and cost share) and the approved budget by major categories.

COST SHARE


**Effective July 1, 2012, ORC and F&A will replace the use of E&G match accounts with C&G match accounts. F&A and Academic Affairs agreed to fund C&G match accounts with E&G match funds. C&G match accounts will be used to track and report required cost share funded by both E&G and C&G sources based on the life of the project.

What about current E&G match accounts?A. Existing E&G match accounts set up prior to 7/1/2012 will be left in the E&G fund.B. On 6/30/13, all E&G match accounts will be reviewed and

determined if they will be converted to a C&G match account.

COST SHARE


New match projects funded by E&G funds

A. Set up all new requests as C&G match projects

B. The new active fund code for C&G match is 21033 (General Accounting). It and its related attributes have been added to PeopleSoft. The fund code is established at the time of project set up in PeopleSoft by F&A when they receive the 650 request for new project set up. F&A will be able to tell the source of funding for the C&G match project by looking at the department # along with the transfer revenue account codes used in the journal to fund the match, such as, 615001 for E&G funded match, 615020 for O/H funded match, and 615029 for balance account funded.

C. Once the C&G match projects have been established by F&A, ORC will work with department(s) to fund the accounts as follows:

i. C&G match projects being funded by C&G funds remain unchanged (funded via journal entry to transfer funds to the new C&G match project.

ii. C&G match projects being funded by E&G funds will be funded via a transfer of revenue credit from the Department to the new C&G match project.

**ARGIS fields will be modified to remove from the pick list the options for E&G match accounts.

COST SHARE

AWARD MANAGEMENT RESPONSIBILITIES2. Companion accounts with salary will be funded; the commitment values will be up-

loaded in ECRT for time & effort certification.

For ease of entry, it is recommended the project “start and end dates” be used as the effort period for each individual. However, if your unit (department/college/center) wants to break it down by semester and will provide the details, we can enter it that way as well. Without input from your unit, it is recommended you use the project start and end dates.

COST SHARE


3. Establish a folder in PARIS labeled “Cost Share.”Upon award it is recommended you upload a document called “Cost Share Source Analysis” to the “Cost Share folder” so that Compliance will be able to identify where the sources and amounts are coming from.

Please remember, if you receive additional funds and/or your cost share sources and/or amounts change, you will need to update the uploaded “Cost Share Source Analysis” with an updated version. The most current analysis should always be the first page.

All documents related to the C&G match account should be uploaded in the “Cost Share” folder.

COST SHARE

AWARD MANAGEMENT RESPONSIBILITIESCost Share Source Analysis

Type of Cost Share

Source Total

Departmental Cash XXXX9XXX $ 250,000ORC Cash XXXX9XXX $ 250,000Foregone F&A @ 45% $ 225,000

Unrecovered F&A N/A

Subcontractor(s): Orange County Schools $ 50,000Brevard County Schools $ 25,000

University of West Florida

$ 25,000

3rd Party In-Kind Graybill Fencing $ 5,000 Groundhog Stump Excavation

$ 2,500

3rd Party Cash Florida Power and Light $ 200,000Tampa Electric $ 200,000

Total Cost Share $1,232,500

COST SHARE


4. Only the latest subcontractor and consultant invoice for each subcontract or consultant should be uploaded in the “Cost Share” folder along with the Excel spreadsheet analysis tracking the invoices, if any. When the next invoice is received from that subcontractor, move the last one to the “Subcontracts” folder for subcontracts or the “Financial Miscellaneous” folder for consultants and upload the latest invoice in the “Compliance” folder.

Third party letters confirming their contributed commitment should be uploaded in the “Cost Share” folder.

For any cost share being provided under a separate C&G externally funded account, a copy of the 650 for that other account should be uploaded in the “Cost Share” folder and the projects should be linked within the ARGIS record.

COST SHARE


5. Sponsored Programs will require subcontract, consultant, and third party cost share on a frequency and format acceptable to the sponsor.

Subcontracts- The subcontract document should require cost share reporting for the current period as well as cumulative cost share to date be required with each invoice.

Consultants- The consulting agreement should require cost share reporting for the current period as well as cumulative cost share to date be required with each invoice.

COST SHARE


CONCEPT TO COMM

ERCIALIZATION

FINANCIAL COMPLIANCE


FINANCIAL COMPLIANCE

1. The month following the award set up of a new project, ORC Financial Compliance will be pulling all new awards to

determine if there is required or voluntary cost sharing to be tracked and/or reported.2. The Compliance Coordinator will verify that proposed, and

subsequently awarded, cost share is set up properly in ARGIS based upon the cost share analysis uploaded to the cost share folder in TERA. If there is no cost share analysis uploaded and/or the cost share has not been entered into ARGIS properly, the Team Lead will be notified and corrections made by Compliance.

COST SHARE

FINANCIAL COMPLIANCE3. The Compliance Coordinator will make a determination for

each award as to how often the cost share progress will be monitored and reported to the PI. For example, if cost sharing is required as part of the invoicing to the sponsor, the Compliance Coordinator will review more often than if cost sharing is only reported at the end of the award.

4. The Compliance Coordinator will set up internal compliance deliverables (currently manually but eventually this capability will be added to ARGIS) in order to review the cost sharing and send the PI an updated cost sharing report.

COST SHARE

FINANCIAL COMPLIANCE5. Upon award, the Compliance Coordinator will send the

following e-mail to the PI, Co-PI(s) and their respective departmental/college administrators:

Our records show your new award from [insert agency name] has been established under project #[insert project number]. This new award has the following [select: required or voluntary] cost sharing which is reportable under the terms of the award.

[insert Cost Sharing Source Analysis table here]

The purpose of this notification is to help you monitor and manage your cost share requirement. Moving forward, you will receive cost sharing status updates [insert monthly, quarterly, bi-annually, etc.].

If you have any questions or require additional information, …..

COST SHARE

FINANCIAL COMPLIANCE6. The following cost sharing documentation will be required and managed by

Compliance:

Type of Cost Share Source DocumentationDepartmental Cost Share (Cash)

C&G match account (XXX9XXX) should be funded by the Department and PI’s cost share expenditures should be charged to the match account.

ORC Cost Share (Cash) C&G match account (XXX9XXX) should be funded by ORC and PI’s cost share expenditures should be charged to the match account.

Foregone F&A Calculation based upon cost share expenditures charged to the match account.

Unrecovered F&A Calculation based upon expenditures charged to the PI’s project account and/or the cost share account.

3rd Party Cash Should be awarded through a C&G external award process and the project account should be linked in ARGIS to the sponsor’s account it is cost share to.

COST SHARE

FINANCIAL COMPLIANCEType of Cost Share Source Documentation3rd Party In-Kind It is recommended internal deliverables be entered into the account to

periodically verify with the PI and/or 3rd party to confirm whether the 3rd party contribution has been received. The 3rd party will need to confirm the after the fact commitment was met by sending a letter on letterhead signed by an authorized representative of the 3rd party or provide other documentation

Subcontractor Cost Share

The subcontract document should require cost share reporting for the current period as well as cumulative cost share to date be required with each invoice.

Consultant Cost Share

The consulting agreement should require cost share reporting for the current period as well as cumulative cost share to date be required with each invoice.

COST SHARE

FINANCIAL COMPLIANCE7. The Compliance Coordinator will send updates to the PI, Co-PI(s), and departmental/college

administrators as follows:Type of Cost Share Source Total Documented as

Met as of XX/XX/XX

Balance

UCF Cash Cost Share XXXX9XXX $ 500,000 $ 75,000 $ 425,000

Foregone F&A @ 45% XXXX9XXX $ 225,000 $ 33,750 $ 191,250

Subcontractor(s): Orange County Schools

$ 50,000 $ 5,000 $ 45,000

Brevard County Schools

$ 25,000 $ 2,500 $ 22,500

University of West Florida

$ 25,000 $ 1,875 $ 23,125

3rd Party In-Kind Graybill Fencing $ 5,000

0 $ 5,000

Groundhog Stump Excavation

$ 2,500

0 $ 2,500

3rd Party Cash Florida Power and Light

$ 200,000

0 $ 200,000

Tampa Electric $ 200,000

$100,000 $ 100,000

Total Cost Share $1,232,500 $218,125 $1,014,375COST SHARE

FINANCIAL COMPLIANCESummary of Roles

Principal Investigator Financial ComplianceEnsure the cost share account is funding appropriately by the Department or College

Ensure the cost share is set up properly in ARGIS and the cost share analysis has been uploaded to the cost share folder in TERA.

Ensure expenses incurred toward cost sharing are charged to the cost share account and are in support of the cost sharing activities

Within a month of account set up, send a project cost share summary e-mail to the PI, Co-PI’s and their respective departmental/college administrators.

Review project financial reports no less frequently than monthly to ensure that direct charges and cost transfers charged to the cost share account are appropriate and meet the requirements of the sponsored award and OMB Circular A-21.

Follow up on a regular cycle and report to the PI, Co-PI’s and their respective departmental/college administrators the status of the cost sharing commitment vs. actual expenditures.

Review cost share expenditures to ensure they are allowable to be cost shared.

Work with Finance and Accounting to determine when cost sharing should be reported as well as what cost share to report

COST SHARE

FINANCIAL COMPLIANCE8. Financial Compliance is the only

department authorized to confirm and/or verify cost sharing for invoicing and/or closeout purposes.

COST SHARE

THANKS FOR JOINING US!See you at the next session:

Post-Award (Part 2)September 11, 2013

9:00am-11:00amORC 2nd floor large (#211)

exploring research administration from concept to commercialization

Documents

cost sharewhy cost share

cost sharing

cost share criteria

cost sharepresented

cost shareconsequences

cost principles

meeting cost share commitments

cost shareomb circular