Transcript Faculty DS2 Presentation

DS2 - Faculty Preparation
Overview of UGA
Policies and Procedures
in complying with OMB
Circular A-21
DS2 - General Information
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Disclosure Web Site:
www.busfin.uga.edu/disclosure
All Policies and Procedures related to the University Disclosure
Statement may be found under the Disclosure Policies and
Disclosure Procedure links
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Policies are effective January 1, 2006
Substantial Changes must be approved by our
Cognizant Federal Agency
DS2 - Meeting Agenda
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What is a DS2?
How was the UGA DS2 developed?
Policy and Procedures - overview
Additional References
Conclusion
Questions
What is a DS2?
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Documents and discloses University cost accounting practices
Required to be submitted to cognizant agency and cognizant audit
agency.
Policies and procedures, instructions, and guidelines for individual
investigators, department heads, and administrators need to be
made available because it is their responsibility to understand and
know them.
Provides Guidelines for “charging costs to sponsored awards”
 Defines University direct costing policies and procedures
 Cost-sharing policies
 Time and effort reporting policies and procedures
 Policies on “Service Centers”
DS2 – How was it Developed
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Three working group committees were
formed comprised of College and
Departmental Business Managers and
Faculty representatives
Steering Committee comprised of
Associate/Assistant Deans, Department
Head, and Center Director representatives
DS2 - Policies
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New Policies
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Cost Transfer
Program Income
Service Center
Existing Policies – Revised
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Cost Share
Direct Cost
Personnel Activity Report
DS2 – New Policies
Cost Transfers
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Cost Transfer – movement of expense(s) between
two different university account numbers
Charges should be moved within 90 days of initial
charge
Charges moved after 90 days require PI signature
All transfers must have adequate
explanation/justification
No transfers allowed to a restricted account if
expense is more than a year old
DS2 – New Policies
Cost Transfers
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Appropriate Justification Includes:
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When the error, or need for a transfer was
discovered
What the charge was for
Why the charge was identified with a different
project originally
How the charge relates to the project that it is
being transferred to
DS2 – New Policies
Cost Transfers
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Conditions for not Allowing Cost Transfers
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No benefit to the project can be demonstrated
Cost overruns are being transferred to an account
with budget available
Charges are being “parked” on one account with
the intention of being moved to another
DS2 – New Policies
Program Income
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Program Income is gross income earned by the
recipient that is directly generated by a supported
activity or earned as a result of the award.
Principal Investigator must:
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Identify potential sources at proposal stage, note on
transmittal and application
Plan for use, prepare budget for program income accounts
Verify program income on reports
Address account balance issues at project termination
DS2 – New Policies
Program Income
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Federal Sponsors
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Use program income funds before sponsor funds.
If funds remain in the project or program income account after
the project has terminated, balances will revert to sponsor.
If the PI wishes to retain these funds, he or she must write a
letter to the sponsor requesting to use these funds, and
outlining a plan for their use.
Letter must be sent to OSP for endorsement and forwarding to
the sponsors for approval.
Non-Federal Sponsors
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In many cases, the sponsor does not have an established
program income policy. If the sponsor is silent on this issue, the
income is not reportable and is handled as a departmental sale
or recharge activity.
DS2 – Existing Policies-Revised
Cost Share
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The policy of the University of Georgia is
to limit its cost sharing on externally
funded projects to the amount specifically
mandated in the application guidelines of
the sponsor.
The University of Georgia will support
committed cost share that is either voluntary
or mandatory by the sponsor when :
DS2 – Existing Policies-Revised
Cost Share
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All cost shared amounts are specified on the Office
of Sponsored Programs Transmittal Form, and
Each cost shared amount is approved on the OSP
Transmittal Form by the relevant dean, director, or
department head. Approval signatures are binding
and indicate a willingness to provide cost share
resources in support of the proposed project.
DS2 – Existing Policies-Revised
Cost Share
Example of committed cost sharing and how it should be tracked:
PI stated in proposal narrative that they would spend 10% of their time on
project. PI’s monthly academic salary is $7,000.
Type of Account
Cost Share Not Tracked
Cost Share Tracked
(PAR not issued)
(PAR required)
Percent
Effort
Salary
Percent
Effort
Salary
Instruction (1011GH) - state
25%
1,750
25%
1,750
Dept. research (1025GR) - state
75%
5,250
65%
4,550
10%
700
100%
7,000
Cost Share (1021CR) - state
100%
7,000
DS2 – Existing Policies-Revised
Cost Share
Alternative:
PI stated in proposal narrative that they would spend 10% of their time on
project and asks sponsor to fund this effort. PI’s monthly academic salary is
$7,000.
PAR not issued
Type of Account
Percent
Effort
PAR required
Salary
Percent
Effort
Salary
Instruction (1011GH) - state
25%
1,750
25%
1,750
Dept. research (1025GR) - state
75%
5,250
65%
4,550
10%
700
100%
7,000
Sponsored research (1021RR) - grant
100%
7,000
DS2 – Existing Policies-Revised
Cost Share
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Cautionary Notes
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Cost share commitments can be stated in several places within a
proposal.
When faculty time is contributed as cost share in support of a project, it
is expected that budgeted research time be utilized for cost share before
instructional time is considered. Whenever cost share involves
instructional time, the faculty member's department head and/or dean
must be notified so that approval can be obtained.
In all instances where cost sharing is described, the institution is
committed to account for these expenditures. The budgetary unit
of record is responsible for documenting and tracking all
commitments made on a project, whether made by that
department or not, unless subaccounts are established so that
the responsibility can flow down to other units.
DS2 – Existing Policies-Revised
Cost Share
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Principal Investigator:
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Carefully consider cost share before including in
proposal
Identify source of cost share funds and ensure
they are not federal (unless authorized by statute)
Monitor budget and expenditures on cost share
account
Ensure accuracy of cost sharing/matching
DS2 – Existing Policies-Revised
Direct Cost Policy
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Major Changes
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More specific in order to address consistency
Determination factors defined: Allowable,
Allocable, Reasonable
Determination Strategy
Treatment of direct and facilities and
administrative (indirect) costs
Unallowable Costs
DS2 – Existing Policies-Revised
Direct Cost Policy
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Principal Investigator
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Development of proposal budget, and financial
management of project, consistent with UGA’s
Direct Cost Policy & Procedures
Allocation of costs to benefiting projects
Review of project budgets and actual costs to
ensure timely correction of any errors
DS2 – Existing Policies-Revised
Direct Cost Policy
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Examples of Problematic Costs:
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Administrative and Clerical Costs
Cell phones
Routine Postage
Individual Professional Memberships
General Office Supplies and Equipment
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Printer Toner, Copy Paper
Computers (unless scientifically justified)
PDAs/Blackberries
Submission of technical/final reports
DS2 – Existing Policies-Revised
Direct Cost Policy
Example of appropriate use of different funds:
1011GH – Instruction salaries & materials
1025GR – Dept. or general research salaries & materials
1011GJ – Dept. admin. salaries, general office supplies, paper,
basic telephone, routine postage, computers
102xAR – Same as GJ, but another funding source or use to
supplement research costs
1021RR – Organized research salaries & materials -- charges
that directly benefit aim of project
DS2 – Existing Policies-Revised
Direct Cost Policy
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Major Projects and Exceptions:
- Modular Grants rarely qualify for major project status.
- To qualify for a Major Project you must apply 
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Large , complex programs, such as general clinical research centers,
primate centers, program projects, and projects requiring managing
teams of investigators from other institutions.
Projects which involve extensive data accumulation, analysis and
entry, surveying, tabulation cataloging, searching literature, and
reporting, such as epidemiological studies, clinical trials, and
retrospective clinical records studies.
Projects that require making travel and meeting arrangements for
large numbers of participants, e.g. conferences or seminars.
DS2 – Existing Policies-Revised
Direct Cost Policy
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Major Projects and Exceptions (Continued)
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Projects where the principal focus is the preparation and
production of manuals and large reports, books and monographs
Projects that are geographically inaccessible to normal
departmental administrative services, such as seagoing research
vessels, radio astronomy projects, and other research field sites
that are remote from the campus
Individual projects requiring project-specific database
management; individualized graphics or manuscript presentation;
human or animal protocol; IRB; or multi-faceted coordination.
Extraordinary and extensive administrative support, significantly
greater than the routine level provided by academic department
staff may be budgeted and charged to sponsored projects
including research data gathering, computer programming,
research training,developing materials for presentations, etc...
DS2 – Existing Policies-Revised
Personnel Activity Reports (PARs)
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OMB Circular A-21 (Section J.10) contains
requirements for procedures and documentation
to support the distribution of salaries and wages
charged directly to an award or through
Facilities and Administrative (indirect) activities.
The employee’s salary must follow consistently
applied institutional policies regarding
compensation and be allocated through an
official payroll system that ties with the financial
records of the institution.
DS2 – Existing Policies-Revised
Personnel Activity Reports (PARs)
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The payroll distribution must reasonably
reflect the activity for which the employee is
compensated.
The method must recognize the principle of
after-the-fact confirmation so that costs
distributed represent actual costs.
The main objective of A-21 is verification that
compensation charged is appropriate to the
activity performed.
DS2 – Existing Policies-Revised
Personnel Activity Reports (PARs)
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Our verification method is in the form of
Personnel Activity Reports (PARs).
PARs are used to confirm that the distribution
of activity represents a reasonable estimate
of the work performed by the employee
during the period.
University wide, only 5% of PARs are
adjusted. For the majority of employees, the
review and certification of a PAR is not a
burdensome task.
Personnel Activity Reports (PARs)
Who receives a PAR?
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In any of the following situations an employee will
receive a PAR:
1. A portion of their salary charged directly to
restricted accounts or cost sharing accounts.
2. A portion of their salary charged to a major function
and an indirect cost activity.
3. A portion of their salary charged to more than one
indirect cost activity.
Personnel Activity Reports (PARs)
How do I verify and submit a PAR?
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A PAR will be generated for each pay period
for which an employee is paid.
To confirm that the distribution of activity
represents a reasonable estimate of the work
performed by the employee during the
period, each PAR must be reviewed for
accuracy and approved by the employee or
by a responsible official having first-hand
knowledge of the work performed.
Personnel Activity Reports (PARs)
How do I verify and submit an e-PAR?
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When PARs are generated, an email
notification will be sent to employee’s
registered email address and to their home
departmental administrator.
The electronic PAR system can be accessed
at https://webapps.ais.uga.edu/PCTE/
You will log on to the electronic PAR system
using your MyID and password.
Personnel Activity Reports (PARs)
How do I verify and submit an e-PAR?
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If the PAR reflects accurately the time expended on
a project tracked by a University account number,
you will check the “Check here to return this PAR
without any changes” check box.
Next, you will click the “Save and Submit” button to
transmit the approved document to the Accounting
Department.
Personnel Activity Reports (PARs)
How do I verify and submit an e-PAR?
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In those situations where the “current distribution”
does not reflect the time actually expended on a
project for the period covered by the PAR, your
department administrator should be notified of the
necessary changes.
Your department administrator will be able to enter
the changes and submit the revised PAR to the
Accounting Department.
DS2 – New Policies
Service Centers
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A departmental sales unit established for the
purpose of providing goods and services to
university departments, and only incidentally to
customers outside the university.
Service centers offer goods and services that are
unique, benefit the effectiveness of the University
when conveniently available, may require special
controls, are subject to federal and/or state
regulations, or are not readily available from external
sources.
Service Centers that generate revenues greater than
$100,000 per year need to prepare business plan.
DS2 – New Policies
Service Centers Billing Rates
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Departments are responsible for the development
and review of Service Center billing rates.
The billing rate should be calculated to break even at
the end of a fiscal year (accounting period).
The billing rate should only include costs to be
recovered (no profit margins).
The same billing rate must be used to charge all
UGA accounts (internal customers).
DS2 - Policy Summary
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Effective January 1, 2006
Cost Transfers (JV’s)
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Program Income
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Must be performed within 90 days of charge. Otherwise will require PI
signature
Must have adequate explanation/justification
No transfers to a restricted account more than a year old
Used before sponsored funds or must have approved authorization
Must have approval from sponsor for UGA to retain any funds
Cost-Share
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Try to limit and specify on Sponsored Program Transmittal Form
DS2 - Policy Summary
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Direct Cost
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PAR’s
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Can not routinely charge cell phones, routine postage, membership dues,
general office supplies and equipment to sponsored awards (exceptions may be
granted by justification through Sponsored Programs. General Federal Funded
Research projects seldom qualify for such an exception)
Electronic PAR’s will be implemented by July 1, 2006
Everyone will be able to certify with no changes
Departmental administrators will be only ones that can make changes
Service Centers
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Departments must develop billing rates
Must break-even (no profit)
Must charge same rate to all UGA customers
DS2 – Additional Training
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Faculty Preparation Course will be offered at
Training and Development on an ongoing
basis.
Business Manager, Departmental
Administrators and Office Manager training
will be offered either on request and/or at
Training and Development (Six Courses
lasting approx. two hours per course).
DS2-Faculty Presentation
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Questions???