Transcript Slide 1

Managing Grants and
Other Sponsored Projects
Presented by Sean Scott, CRA
© Sean Scott, 2014
© Sean Scott, 2014
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Policies, Policies, Policies:
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Audits, Audits, Audits – The most important
interpretation!
◦ 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
© Sean Scott, 2014
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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.
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Universities are required to comply with the four standards
below:
◦ CAS 501
Costs
◦ CAS 502
◦ CAS 505
◦ CAS 506
- Consistency in Estimating, Accumulating, and Reporting
- Consistency in Allocating Costs for the Same Purpose
- Accounting for Unallowable Costs
- Cost Accounting Period
© Sean Scott, 2014
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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.
© Sean Scott, 2014
© Sean Scott, 2014
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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
The 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:
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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
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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
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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
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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
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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”.
© Sean Scott,, 2014
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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
© Sean Scott,, 2014
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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.
© Sean Scott,, 2014
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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?
© Sean Scott,, 2014
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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.
© Sean Scott,, 2014
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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.
© Sean Scott,, 2014
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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
© Sean Scott,, 2014
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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.
© Sean Scott,, 2014
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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.
© Sean Scott,, 2014
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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.
© Sean Scott,, 2014
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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
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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
When 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
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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.
© Sean Scott, 2014
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it gets serious….
© Sean Scott, 2014
Institution 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
© Sean Scott, 2014
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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
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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
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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
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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
© Sean Scott, 2014
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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”
© Sean Scott, 2014
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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?
© Sean Scott, 2014
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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
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Establish an accurate and detailed budget
If federal, then Cost Accounting Standards apply
◦ CAS apply to awards with modular proposal budgets as
well
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PI also responsible for financial management of
subawards
© Sean Scott, 2014
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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
© Sean Scott, 2014
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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
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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
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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
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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
 Expanded
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
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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 A21 – Cost Principles for Educational Institutions
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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
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
© Sean Scott, 2014
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Submit all required closeout reports in a
timely manner
◦ Final Progress Report
◦ Invention Statement
◦ Final Financial Report
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Has become a priority for federal sponsors
Not submitting closeout reports on time
could put funding at risk.
© Sean Scott, 2014
“I don’t fear computers. I fear the
lack of them.”
- Isaac Asimov
© Sean Scott, 2014
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way we work has changed on
a fundamental level, eRA has
totally changed the landscape
Harder deadlines
Moving a document is very
different
Smaller margin for errors
Technical glitches can kill
Requires additional institutional
resources
© Sean Scott, 2014
“The iTunes philosophy”
© Sean Scott, 2014
“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.”
© Sean Scott, 2014
"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!!!
© Sean Scott, 2014