MANAGING SPONSORED PROJECTS

FINANCIAL COMPLIANCE

May 1, 2008

Office of Grants &Contracts Accounting

FINANCIAL COMPLIANCE

You Should Understand: Key Areas of Risk Your Responsibilities Resources and Tools Available

FINANCIAL COMPLIANCEWhat are the Risks Related to Grant

Awards? Misuse of funds (purchasing cards, fraud) Improper cost allocation (multiple projects) Accelerated expenditures Unobligated balances Cost transfers Restrictions on Notice of Award Financial conflict of interest Time and effort reporting Unallowable costs

FINANCIAL COMPLIANCEWhy All The Fuss?

Because of Potential Impact on MUSC

Shutdown of Operations Fines and Penalties Damage to University’s Reputation Susceptibility to False Claims Allegations

FINANCIAL COMPLIANCEWhy All The Fuss?

Because of Potential Impact on You

Loss of PI Status Debarment Possible Criminal and Civil Charges

Remember: One of our primary goals in GCA is to safeguard the University and you

FINANCIAL COMPLIANCEWho is Responsible?

Institution? Principal Investigator (PI)? Departmental Administrator? Central Administration?

FINANCIAL COMPLIANCEWho is Responsible?

As PI, you: Make the budgetary decisions Approve expenditures Should know special terms and conditions Approve final Financial Status Reports

(FSRs)

FINANCIAL COMPLIANCEWho is Responsible?

Tips: Always remember that the financial aspects

of your grant are just as important as the science

Don’t ever hesitate to question an expense on your grant

FINANCIAL COMPLIANCETraining

What would your responses to the following questions be? What training have you attended in the past 18

months? Who sponsored this training? What training programs are provided by the

University? Does MUSC have policies and procedures to

ensure compliance with federal regulations? Make every effort to attend training

FINANCIAL COMPLIANCEUnderstanding Direct Costs vs.

F&A Costs DIRECT COSTS

Federal Definition (OMB Circular A-21, Section D) F&A COSTS

Federal Definition (OMB Circular A-21, Section E) It is a Direct Cost, but is the cost allowable? Does the cost meet the following criteria?

Reasonable Allocable Allowable Consistently Treated

FINANCIAL COMPLIANCE Avoiding the Pitfalls

Allowable/Unallowable Expenditures Know what charges are not applicable to your

grant If you have concerns of allowabilty or

allocability question your Departmental Administrators

Become familiar with costs that can and cannot be charged direct to your grant

FINANCIAL COMPLIANCE Avoiding the Pitfalls

Cost Transfers Try to avoid having frequent transfers Understand the University’s Cost Transfer Policy Be aware of the NIH Cost Transfer Policy Question transfers off and onto your grant Make sure cost transfers are adequately justified

and well documented Avoid transfers at the end of a grant spending

period

FINANCIAL COMPLIANCE Avoiding the PitfallsActivity Reporting

Be aware of the University’s policies and understand them Submit Activity Reports on time Be able to reasonably explain how you track the amount of

time spent on an award By You By a Trainee or Post Doc

Know who your Department Coordinator is Understand how activity is reported, to whom, and how

often Understand how your activity is approved Know who maintains the Activity Reports Make sure that you account for all of your activity

FINANCIAL COMPLIANCEMost Common Direct Costs

Salaries & Fringe Benefits Equipment Supplies Patient Care Cost Travel Subrecipient Agreements

FINANCIAL COMPLIANCESalaries & Fringe

Combined Salary

NIH Salary Cap

Affiliate Salary Worksheet (Affiliate Salary - Policy/Procedure 4-3.07)

Fringe Benefits – rates negotiated only for grants

MUSC Online Activity Reporting https://appserve.musc.edu/effort

FINANCIAL COMPLIANCEEquipment

Definition Special purpose equipment General purpose equipment

Excluded from the F&A Calculation on federal awards

Rebudgeting may require prior approval from the sponsor

FINANCIAL COMPLIANCESupplies

Materials & Supplies Expendable items Medical/scientific/laboratory supplies Equipment under $5000 or a useful life > 1 yr.

Office Supplies Normally unallowable as a direct cost on federal

awards

FINANCIAL COMPLIANCEPatient Care Costs

Account Code Most commonly used chart of accounts

Inpatient and outpatient expenses

Rebudgeting

Excluded from F&A Cost Calculation for Federal Awards

FINANCIAL COMPLIANCETravel

Who can travel?

Contact GCA for further assistance prior to incurring travel expenditures.

Travel expenses incurred by consultants & private entities are subject to the Federal Travel Regulations http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=17943&contentType=GSA_BASIC

FINANCIAL COMPLIANCESubrecipient Agreements

Definition

Prior approval

Applicable F&A

Subrecipient invoice approvals