Transcript What do you mean * I can*t charge food to my federal grant?

Developing your budget …
And introduction to the cost principles and
allowable costs and …..
OSP awareness
Oct 19, 2011
What is a budget?
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Financial expression of your work
plan (aka statement of work)
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Personnel costs
Other than personnel costs
Best estimate of financial resources
needed to accomplish project
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Accurate
Personnel Costs (a direct cost)
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SU folks whose effort will allow
project objectives to be realized
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Key or senior personnel
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Folks responsible for project – ordinarily
faculty
Others
Technicians
 Project managers
 Postdocs, grad students, undergraduates
 Admin/clerical
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Personnel Costs
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Salaries and wages
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How much?
Proportion time allocated to grant
 Full time, half time, 25%; 1 sum month
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Fringe benefits
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Federally negotiated rates
Annually updated
Five employee classifications
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Reg staff/AY faculty; summer faculty;
Grad Res Asst; PT/ES/OL; Adjunct
Other than Personnel Costs
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Everything else…
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Travel
Equipment (>$5,000)
Materials & Supplies
Non-SU people
Collaborators/consortia, consultants
 Participants
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Tuition
Publications
………
What about that ‘tax’ SU charges
Also called “indirect costs”
Or
 Facilities & Administrative costs
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Negotiated with federal government
 Research – on campus (47% FY 12), (48% FY 13)
 Instruction – on campus (32%)
 Other – on campus (33%)
 Off-campus Research, Instruction and Other (26%)
Percent of what?
 Modified total direct costs
 Direct costs – tuition, equipment, subcontract > 25k, rent
Estimating direct costs
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Check out osp.syr.edu
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http://osp.syr.edu/budgetdevelopment/Conceptualizing%20your%20Budget/Per
sonnel.html
Talk to those with more experience?
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What can you get done for the money?
What do sponsor’s expect when budgeting and
expending money….
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Cost principles
Cost Principles (Standards)
Premise:
Project costs = Allowable direct costs
allowable indirect costs (IDC (or F&A))
Guiding Principles – Costs must be:
 Allowable,
 Allocable,
 Reasonable, and
 Consistently treated
(DC)
+
What’s allowable?
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Must be reasonable (!);
Allocable to sponsored agreements;
Consistently treated; and
Conform sponsored agreement.
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Sponsored agreement trumps all
principles – no means no.
What’s Reasonable?
When you bought the item at price X and
quantity Y
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You acted prudently – others would have made
similar decision given facts and circumstances
at the time.
 necessary;
 followed good business practices and
applicable laws and regulations, and
sponsored agreement terms and conditions;
 acted prudently given the circumstances; and,
 followed institutional policies
If purchase posted on public blog, or NYS
Times etc etc – how would folks react?
What’s allocable?
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Item can be assigned (allocated) to
an award/project, or function
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In proportion to benefit received
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Direct costs – exclusive benefit to project
or can be reasonably assigned to multiple
projects
Indirect costs – benefit many projects or
activities, can’t be reasonably assigned
What’s Consistency?
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All costs incurred for the same purpose in
like circumstances are treated the same
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If in F&A pool, there it stays, UNLESS cost is
not for same purpose…
If allocate to one award, ordinarily can’t
shift to another award
If charge to one award, can’t shift to
another cause there’s $$ in the pot.
Basically …
Allowable as Direct Cost…
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Essential to support project
Cost to sponsor in proportion to
benefit received
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They pay the whole cost, they are the
sole beneficiary
University and sponsor allow
Allowable in F&A (not DC)
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Needed to support many projects
Not reasonable to assign proportion
of benefit, including but not limited to
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Sect’y/clerical (cost of doing business)
Lap top computers (general purpose
equipment)
Office supplies (cost of doing business)
Local phone calls (cost of doing business)
These are all administrative costs…
 (the “A” in F&A (“F” = facilities)
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Federal government’s concern
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Bear its fair share of sponsored
project costs
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Protect public’s interests ($$)
Protect public’s trust
Areas where folks stumble (post award)
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Allocability
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Yale 7.6M: “Spending down” awards
(cost transfers); deferred effort (did
not work during summer)
Consistency
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Charging admin personnel and ‘stuff’
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Duke 1.6M
And stuff like: Food….
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That’s entertainment!! (j.17)
Unless conference or meeting (j.32)
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PURPOSE – disseminate sponsor’s
results (Remember: How does expenditure allow
you to achieve project’s objectives?)
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Characteristics of meeting:
Formerly announced;
 Agenda;
 List of attendees;
 Minutes,
 Proceedings etc.
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Or stuff like travel
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Go to <city> for conference
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Rent car to travel to <city>
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Stay extra time
Can’t charge ‘extra time’ to grant
Lexus with all bells and whistles
Return
Gas receipt time stamped after car
returned
Lack itemized receipts for procard
transactions
Core questions when developing
budget AND spending $$..
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How does purchase/expenditure (as DC)
help accomplish the project’s objectives?
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Not allowed in solicitation / agreement?
Is prior approval necessary?
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If cost in generally in F&A, how is situation
non-routine, unlike?
If yes, and not obtained, not allowed.
Reasonable purchase?
DOCUMENT in budget justification
and when money $$ how purchase
advances project’s objectives
What do you think, #1?
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Sydney wants to buy a lap top using
NSF grant dollars.
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Not in budget narrative
Lap top will likely be in Sydney’s office
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Allowable cost?
What do you think, #2?
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George has included secretarial support in
his budget narrative for specific project
activities. Project Awarded
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25% of employee’s work load.
George’s project is winding down and is
now in the last year. The sec’ty quit at yr
4. George wants to charge 2% of senior
administrator effort to grant.
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Allowable cost?
What do you think, #3?
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Morgan wants to fly to Europe to
disseminate his NSA project results.
Tickets charged to NSA award,
which requires prior approval before
making the expenditure.
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Did not get prior approval
Allowable cost?
What do you think, #4?
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Helen has a grant to encourage increased
representation of minority students in
STEM fields. An important element is
networking events, which involve ……
food.
Helen is not charging the cost of food to
the sponsor, but wants to use the cost to
meet mandatory cost-sharing.
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Allowable cost?
What do you think, #5?
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Fred wants to buy a special freezer
to store samples acquired during
the award period. His department
is running out of space and he has
been asked to allocate ½ the
freezer space to dept purposes.
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Allowable cost?
What do you think, #6?
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Margie has weekly lab-group
meetings to discuss progress on
various sponsored projects. To
encourage participation, she
provides pizza and beer and wants
to charge the costs to the grant.
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Allowable cost?
Summary
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Follow the cost principles…AARC
Justification, documentation of
expenditures is essential & starts with
budget narrative.
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Rarely black and white… many shades of
grey..
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Make compelling case why needed, why cost in
proportion to benefit.
Sponsors want to pay for their fair share
Sponsors don’t want to pay for “cost of doing
business unrelated to their business”
But, sometimes, no means no…