presented by sean scott, cra managing grants and other sponsored projects © sean scott, 2014
TRANSCRIPT
Presented by Sean Scott, CRA
Managing Grants and Other Sponsored Projects
© Sean Scott, 2014
The most difficult question a Research Administrator
has to answer….
© Sean Scott, 2014
Policies, Policies, Policies: ◦ OMB A-110: Grants and Agreements with
Institutions of Higher Education - baseline ◦ OMB A-21: Cost Principles for Educational Institutions ◦ OMB A-133: Audits of States, Local Governments, and
Non-Profit Organizations◦ State law◦ University policies/procedures◦ Sponsor-specific policies and terms◦ Other
Audits, Audits, Audits – The most important interpretation!
Why we do what we do
© Sean Scott, 2014
Office of Management and Budget Circular A-21 “Cost Principles for Educational Institutions”
-Outlines what are allowable direct and F&A costs on grants and cooperative agreements and how the accounting for federal dollars at the institution should occur.
Universities are required to comply with the four standards
below: ◦ CAS 501 - Consistency in Estimating, Accumulating, and Reporting Costs ◦ CAS 502 - Consistency in Allocating Costs for the Same Purpose ◦ CAS 505 - Accounting for Unallowable Costs ◦ CAS 506 - Cost Accounting Period
Cost Accounting Standards
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In general, costs must be reasonable, allocable, allowable and treated consistently throughout the institution.
Direct costs - those costs that can be identified specifically with a particular sponsored project, an instructional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
F&A costs - those that are incurred for common or joint objectives [of the University] and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity or any other institutional activity." (A-21, E.1.) These costs are comprised of a number of components.
Costs
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The Proposal – Laying the Groundwork
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Budgets Proposal budgets should be as detailed as possible and
include ALL costs required for the project, even if not required by the sponsor
Should include Salary plus fringe benefits Direct current expenses (supplies) Travel Equipment Subawards Any items that are normally considered to be
indirect costs but are being charged as direct costs require a justification for federal or federal flow through projects (CAS)
F&A costs
Charges must be allowable, allocable, and reasonable
© Sean Scott, 2014
EffortThe presumption is a PI will need time/effort to complete the scope of work on a sponsored project. If the sponsored award does not include funds for PI effort, the presumption is the PI’s department will cost share the effort. In rare cases, a justifiable reason may exist to over-ride this presumption if no cost share was committed in the proposal to the sponsor or award from the sponsor. Some examples of include, but are not limited to:
• Equipment only award• PI is the mentor on a dissertation award and the funds are for supplies only• PI is a mentor on an individual fellowship award• All conditions for closely related work are AND the PIs salary is applied to one of the
closely related projects AND prior written approval is obtained from the sponsor incurring the cost
For faculty with a nine (9) or ten (10) month appointment contract, the presumption is a PI will need academic year time/effort to complete the scope of work on a sponsored project. An exception would exist if the project period for the award is limited to the summer.
© Sean Scott,, 2014
Personnel Costs - Notes Fringes should always be included with salary costs Salary for existing employees should be based on
current actual salaries. Multi-year projects should project a salary
escalation and a larger increase in health insurance per year.
Administrative and clerical staff are typically unallowable
New Positions - for guidance in determining estimates for new positions contact your Human Resources Department; salaries for new positions should be consistent with the salaries for similar positions and responsibilities across campus
© Sean Scott,, 2014
Subaward, Consultant or Vendor? Subawardee – performs substantive amount of scope of
work under grant or contract with responsibility for programmatic decision making and measurable performance requirements, must adhere to Federal compliance requirements if Federal award, retains IP if a university
Consultant – only provides advice or direction, does not perform part of the scope of work, can not be an employee of the institution, no controls with regard to manner of performance, a work for hire with no rights to end product
Vendor – An organization which provides goods or services to the public as part of its normal business operations within a competitive environment, not subject to same compliance requirements as subcontractor
© Sean Scott ,2014
Budget Justifications INCREDIBLY IMPORTANT!! The beginning of the defense
of any expenditure. Should be detailed and programmatic in nature. DON’T used canned language!
The financial expression of the scope of work What should be included in budget justifications can
vary among sponsors All key personnel, what they will be doing, and their
corresponding effort needs to be included in justifications
Other items commonly needing justifications include equipment, travel, consultants and subrecipients
Only proposals for federal or federal flow-through funding requires CAS-compliant budget justifications.
All CAS items require extra justification. © Sean Scott, 2014
A-21 requires that “costs incurred for the same purpose in like circumstances” be treated consistently as direct or F&A.
In specific “special purpose and circumstance” situations, costs which are normally treated as F&A may be charged as a direct cost.
The grant must be for a Special Purpose and an adequate justification for why the item is to be charged as a direct cost must be provided and approved.
Something that would normally be considered an F&A cost but is being charged as a direct cost item we call a “CAS item”.
CAS Items
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Examples of projects which could be considered special purpose or circumstance: Industry or foundation sponsored projects State sponsored projects (not fed flow-through) Training or Planning grants Geographically inaccessible projects Large, complex projects Extensive data management or reporting projects Projects with unusual aspects
Special Purpose/Circumstance
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Note that the determining factor in classifying salaries of administrative and clerical staff as direct costs must relate to the different work they perform to meet the exceptional requirements of the project as compared to that of administrative and clerical staff who perform work related to routine departmental or general institutional administration. Generally, a project that requires more of the same type of administrative support as that required for routine departmental or institutional administrative support would not meet the criteria of a different purpose and circumstance.
Secretarial/Clerical Salary
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Questions to consider: 1. What will this individual be doing that is
different or in addition to his/her normal duties? 2. What is unique about the responsibilities on
the project? And, how does this tie in to scientific/programmatic objectives of the project?
3. Is the position specific to the project and will not exist if the project is not funded?
4. How much effort is being charged?
Secretarial/Clerical Salary cont.
© Sean Scott,, 2014
Jane Doe, Administrative Assistant. This cost is normally treated as an F&A cost at the University of Kentucky. However, due to the requirements of this project, university policy allows this cost to be requested and justified as a direct cost. The proposed project involves development, implementation and evaluation of eight workshops attended by on-site and off-site trainees with approximately 40 standardized patients. Ms. Doe will assist in the preparation of Student Guides and Instructor Reference for use by the trainees during their residency. Ms. Doe will be solely responsible for coordinating and scheduling the training workshops for on-site and off-site attendees. She will coordinate and schedule the standardized patients for the workshop. At the end of the workshops, it will be Ms. Doe’s responsibility to compile the student evaluations into a usable format for reporting results and for use in future workshops. 50% of her time will be devoted to this project.
Good Example #1
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Larry Jones, Administrative Assistant: This cost is normally treated as an F&A cost at the University of Kentucky. However, due to the nature of this project, university policy allows this cost to be requested and justified as a direct cost. This Program Project is large and complex, containing ten (10) separate components and additional supplemental funding. Further, the Program Project also entails multiple subcontractual agreements, which require extensive monitoring and liaison with the recipient institutions. Mr. Jones will be responsible for processing all payment documents involving all of the Program Project accounts. He will monitor and reconcile all fiscal accounts and will communicate regularly with Core and individual Project Leaders regarding the fiscal activity of the grant. He will be responsible for preparing a monthly financial report for each Core, Project and Pilot Program Leader. Further, he will develop overview reports of the financial activity on all projects within the Program for the Director, Dr. Smith. Mr. Jones will devote 80% of his effort to this Program Project.
Good Example #2
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Computing hardware is normally an F&A cost because computers are used in support of a variety of activities. However, in accordance with university costing policy computers may be charged to a sponsored agreement when all of the following criteria are met. The hardware must be required to fulfill the scientific objects.
Sponsors expect employees of institutions to be provided with tools to do their jobs.
Your institution's threshold for capital equipment will determine if computers meet that definition
Computers
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A desktop computer (Dell, Optiplex 5200 GXMT) is requested to support the extensive cloning experiments and plasmid constructions described in this proposal. This cost is normally treated as F&A at the University of Kentucky. However, due to the requirements of this project, University policy allows this cost to be requested and justified as a direct cost. This computer is essential to fulfill the Specific Objectives of the proposal, including the construction of the human/rabbit chimeras, the construction of the multicistronic plasmids, and the design of oligonucleotide primers for polymerase chain amplification. The computer will be exclusively for the scientific aims of this proposal. The software needed to design the plasmids, chimeric proteins, and oligonucleotide Primers (Lasergene, DNAStar, Inc.) will also be purchased on this grant.
Good Example #1
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$3,000 is requested for a laptop computer. This cost is normally treated as F&A at the University of Kentucky; however, due to the requirements of this project, university policy allows this cost to be requested and justified as a direct cost item. The computer will be exclusively dedicated to the accomplishment of the specific aims of this project as described in the research plan; Specific aims 1 and 2 involve collection of clinical data from primates at three off-campus test sites. The laptop will enable the researchers to enter data from primates at three off-campus sites. The laptop will enable the researchers to enter the data as it is received and review the entered data while still at the site. The data can then be transferred from the test sites directly to the university for analysis. On-site computer entry facilitates quality control and removes the possibility of human error which could occur while transferring data from a hand written record to a computerized data base.
Good Example #2
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This cost is normally treated as F&A at the University of Kentucky. However, due to the requirements of this project, University policy allows this cost to be requested and justified as a direct cost. The specific aims of this project are the gathering, analysis and dissemination of information to medical professionals in Kentucky. Specific Aim #1 will require mailing large surveys to 3000 medical professionals requiring far more than normal departmental usage of paper, toner and postage. Specific Aim #3 will require mailing out of the generated information to the same 3000 individuals, again requiring far more office supplies that would normally be used. We project the need for 10 boxes of paper, six toner cartridges and 3000 3-ring binders.
Office Supplies example
© Sean Scott,, 2014
Justification Examples - Bad
The PI has not landed a grant in a while to which he can broadly charge supplies. In truth we have been limping along. For this reason the materials and supplies lines in the first two years might seem a little high. We need this money to get back on our feet.
This is needed to accomplish the scope of work. The nature of our work is such that we often
get unexpected results. While these materials may not be needed now, they would be needed if the experiments did not go as planned.
© Sean Scott,, 2014
Facilities & Administrative Costs
Also referred to as F&A, overhead, or indirect costs
Rates are set by negotiated agreement with Federal Agency
F&A costs never fully covered all cost shared F&A negatively affects future F&A rates
Amount of F&A is rate x base F&A bases – Salaries & Wages, Total Direct
Costs, Modified Total Direct Costs, Cash Receipts
Know your institution's rate and base!
© Sean Scott, 2014
Cost ShareWhen mandatory or voluntary cost sharing is specifically identified and described in the proposal budget and made a condition of the resulting award, the institution has an obligation to record the costs in the accounting system. Consequences of committing cost sharing in the proposal include, but are not limited to: tracking and documenting cost sharing is an administrative burden; unfulfilled cost sharing commitments or lack of documentation may result in expenditures not being reimbursed by the sponsor; cost sharing dollars in the aggregate have a negative impact on the University’s Facilities and Administrative cost rate; the higher the amount of cost sharing, the lower the resulting F&A rate.
© Sean Scott, 2014
Types of Cost Share Mandatory Committed Cost Share: Cost sharing that is required by law,
statute, regulation, written in the application guidelines for a specific program or included in the award document. Mandatory committed cost share is recorded in the University’s accounting system and must be reported to the sponsor.
Voluntary Committed Cost Share: Cost sharing that is not required by
law, statute, regulation, nor written in the application guidelines, but was offered by the investigator in the proposal. Voluntary committed cost share is recorded in the University’s accounting system and must be reported internally. DON’T DO!!!!!!!!!!
Voluntary Uncommitted Cost Share: Cost sharing that is not offered in the proposal and is not included in the award document. Voluntary Uncommitted Cost Share is not recorded in the University’s account system and is not reported internally or externally. Uncommitted cost sharing most commonly results from an investigator’s effort which is over and above that committed in a proposal or award.
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Now it gets serious….
Success!! Now what?
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Award ReceiptInstitution normally receives award via e-mail
or paper, most federal sponsors have moved to electronic
Need to check:• Scope of work – has the PI approved?• Budget – was the full proposed budget
funded or was it cut? If cut, has PI approved? Was a full budget included in proposal?
• Deliverables – what reports (technical or financial) or other deliverables are required and when are they due?
• Dates – What are start and end dates
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Two Major Kinds of Awards A fixed-price award is one where the
institution is paid a flat fee for doing a project◦ Fixed-price agreements carry the greatest risk for
the institution A cost-reimbursable award is one where UK is
paid for actual costs incurred on the award◦ Payment can be made several ways – invoice
regularly for costs incurred, scheduled payments, milestone payments. But even when money is provided up front, at the end of the project, any amount over costs is returned to the sponsor
◦ Cost-reimbursable awards can still be limited by the sponsor as to what is allowable so not all costs covered sometimes. (ex. limited F&A, limited PI salary)
© Sean Scott, 2014
Read the entire award notice every time◦ Always check for special terms and conditions as
you never know when they may crop up, even on basic research awards
Be sure the research administrator and the PI have the same award information
Pay attention to special requirements of training grants, fellowships and career awards
The terms of the award notice supersede any general award policies
Be sure you have the most recent policy/notice
Suggestions & Tips
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Scope of Work and Budget – if either of these varies significantly from what was proposed and the PI can’t accept them then negotiation with the sponsor will be required
Most federal grants won’t have other issues to negotiate. However, for some sponsors and for federal contracts, other issues could include:◦ Legal – “drop dead issues”, governing law,
indemnification, open records◦ Best business practices – invoicing, documentation,
payments◦ Non-profit status – Intellectual Property, “Work for
Hire”
Negotiation
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Are there any additional requirements for accepting the award?
Is an Institutional Signature required? Do we have NIH required PI certification? Has any Conflict of Interest been disclosed?
Has it been managed? Has all required internal paperwork and
approvals been received?
What else should we know before accepting the award?
© Sean Scott, 2014
Set up an account for the project to keep funds separate.◦ May require more than one account depending on
expanded authorities, terms and conditions, or possibly funding source
Establish an accurate and detailed budget If federal, then Cost Accounting Standards
apply◦ CAS apply to awards with modular proposal budgets
as well PI also responsible for financial management of
subawards
Financial Management
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Awards may have restrictions on rebudgeting funds
Revisions must still comply with allowable, allocable and reasonable standards
Must be able to show it benefits the project Standards for CAS justifications are the same
but additional information as to why it was not included in proposal should be included
Timing can be a factor May require a revision to F&A as well
Budget Revisions
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What is a Cost Transfer? A transfer of an expense from one cost object to another
Institutions that receive federal funds are subject to audit disallowances without sufficient control and documentation of cost transfers
University is required to retain external auditors to conduct extensive reviews of federal grant and contract expenditures including cost transfers
If federal requirements are not met, the transfer may be disallowed causing the College/School to pick up the cost
If a number of cost transfers are disallowed, the auditors may extrapolate and recommend disallowing a percentage of all cost transfers
© Sean Scott, 2014
Normally Allowable Cost Transfers
Correct bookkeeping or clerical errors Removing expenditures that do not benefit a
sponsored project (regardless of age) Properly allocate costs in accordance with CAS• Item must be a direct cost• Specifically identified with and benefits each
project• Reasonable allocation method (FTE,
percentage of use, etc) Reclassify overexpenditures to voluntary cost
sharing
© Sean Scott, 2014
Normally Unallowable Cost Transfers
Transfer of any expense to a sponsored project when direct benefit to the project cannot be demonstrated
Changing an indirect code to a direct code when back-up refers to an indirect item (pens)
Transfers to prevent overruns or move over expenditures (Charge must remain on project which received direct benefit)
Transfers to multiple projects without sufficient back-up to support the allocation
© Sean Scott, 2014
Unacceptable Cost Practices Rotation among sponsored projects Charging to account with largest balance Charging budgeted rather than actual cost Assigning a charge in advance of actual cost
incurred (subs) Identifying a cost as something other than
what it actually is (job titles, “gl shopping”) Charging expense entirely to sponsored
projects when it supported other activities Charging cost of normal administrative
support (F&A costs)
© Sean Scott, 2014
Administrative ManagementExpanded Authorities (carryforward, pre-award, no cost extension)
Prior Approvals (equipment, effort reduction, change in scope, new subcontracts)
Progress reports, other deliverables
No cost Extensions© Sean Scott, 2014
Effort Reporting Is the method of certifying to the granting agencies
of sponsored projects that the effort charged or cost-shared to the project has actually been completed
Is mandated by the federal government in◦ Federal Regulation 2CFR220◦ Replaced Office of Management and Budget Circular
A-21 – Cost Principles for Educational Institutions Because labor charges represent a majority of all
Federal research funding, the government expects a high degree of compliance to their regulations.
Effort reporting remains a focus of Federal audits and investigations.
© Sean Scott, 2014
PI Effort – No Cost Extension
The sponsor assumes PI effort will not change during a project extension period. If the PI’s effort on a project will be reduced during an extension period and sponsor permission for this change is required, the PI must notify the sponsor in writing indicating the reduced effort percentage and a brief explanation for the reduction in effort on the project, e.g. what activities will be carried during the extension. Written approval from the sponsor is required. For NIH this can be accomplished in the latest Progress Report.
The PI should consider the following: PI’s E-mail to sponsored projects office should not conflict with the
information provided to the sponsor PI should include effort for preparing the final report, publication
and other activities associated with shutting down the research project when calculating his/her effort during the extension
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Submit all required closeout reports in a timely manner◦ Final Progress Report◦ Invention Statement◦ Final Financial Report
Has become a priority for federal sponsors Not submitting closeout reports on time
could put funding at risk.
Closeout
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“I don’t fear computers. I fear the lack of them.”
- Isaac Asimov
Electronic Research Administration
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The way we work has changed on a fundamental level, eRA has totally changed the landscapeHarder deadlinesMoving a document is very different
Smaller margin for errorsTechnical glitches can killRequires additional institutional resources
Effects of eRA
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“The iTunes philosophy”
Website issues
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“Any personally identifiable information in electronic communications to this Internet site is governed by this site’s Privacy Policy. The owners of this site shall be free to use or copy all other information in any such communications, including any ideas, inventions, concepts, techniques or know-how disclosed therein, for any purposes. Such purposes may include disclosure to third parties and/or developing, manufacturing and/or marketing goods or services.”
What you can find
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"Everything should be made as simple as possible, but not simpler." - Albert Einstein
It takes a village to effectively manage sponsored projects!
Use all the resources available to you to be the strongest competitor you can be!
Communicate early and often!
Good research administration leads to more grants and a stronger institution!!!
Ideas to take away….
© Sean Scott, 2014