Transcript Research Administration

Post Award
MUHAS, Dartmouth, UCSF
Terms & Conditions; Policies & procedures for
effort reporting, cost transfers
Tuesday October 21, 2014
Agenda
O Policies and procedures
O Cost accounting standards
O Effort reporting
O Cost transfers
Policies – what does MUHAS have?
Polices for MUHAS are posted here:
http://www.muhas.ac.tz/index.php/polic
y-documents
O MUHAS Audit Committee Charter 2013
O MUHAS Internal Audit Charter 2013
O MUHAS Financial Regulations 2012
O Resource Mobilization and Cost
Containment – Operational Policy and
Procedures Draft 2014
Policies: What other policies should
MUHAS consider developing?
O Conflict of Interest
O Allowable effort on federally funded sponsored
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O
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projects
Cost accounting standards (CAS) guidelines:
Charging practices for sponsored projects
Deficit monitoring and resolution
Effort reporting of federally sponsored projects
Cost transfers
Cost sharing
Conflict of Interest
O Researchers must submit financial disclosure
forms at the time of proposal submission for
research funding, when research gift funding is
received, and when an application for protocol is
submitted for a clinical study. “Funding” includes
money and/or materials.; “Conflicts” include
intellectual property (“IP”), income, investments,
service on a Scientific Advisory Board (or its
equivalent), member of Board of Directors,
employee of a company or entity, ownership of a
company, and so forth. Conflicts must be
reviewed and approved before funding can be
accepted and the research can begin.
Conflict of Interest
Federal Demonstration Partnership website
http://sites.nationalacademies.org/PGA/fdp/
PGA_061001
O CONFLICT OF INTEREST MODEL POLICY
O Financial Interests Report
Allowable effort on federally
funded sponsored project
O Some sponsor agencies, such as agencies
of the U.S. federal government (e.g. NIH),
prohibit faculty from devoting 100% of their
effort to sponsored activities when their
academic appointment requires them to be
engaged in non-sponsored activities.
Cost accounting standards (CAS)
guidelines: Charging practices for sponsored
projects
O Federal regulations mandate that universities establish consistent
practices for defining and charging costs either directly or
indirectly
O Cost Principles for Educational Institutions, sets forth the
principles for determining the costs – direct vs. Facilities &
Administrative (F&A), allowable vs. unallowable, etc. – applicable
to federally sponsored projects and acceptable allocation
methodologies.
O The allowability of a particular charge to a particular AwardProject-Fund always depends on specific facts, circumstances,
terms, conditions, restrictions, and policies in effect at the time of
the charge.
Cost accounting standards (CAS)
guidelines: Charging practices for sponsored
projects
O
In order for an expense to be considered allowable as a direct cost, the cost must be:
Allowable – The cost must be allowable under the terms and conditions of the
sponsored award, under applicable sponsor regulations (OMB Circular A-21, C2), and
under University policies.
Reasonable– The cost may be considered reasonable if the nature of the goods or
services acquired, and the amount involved therefore, reflect the action that a
prudent person would have taken under the circumstances prevailing at the time the
decision to incur the cost was made. (OMB Circular A-21, C3)
Allocable – The cost must benefit the project and be directly attributable to the
project or activity being performed. The cost can only be assigned and allocated to
the project(s) based on that portion of the expense that represents the direct benefit
to the project. (OMB Circular A-21, C4)
Consistently treated – Costs incurred for the same purpose in like circumstances
must be treated consistently as either direct or F&A costs. (OMB Circular A-21, C10)
and (OMB Circular A-21, C1
Deficit monitoring and
resolution
O Campus administrative officials, including vice chancellors,
deans, department chairs and principal investigators, have a
fiscal responsibility to monitor financial results of departments or
programs under their control, ensuring that sufficient revenue,
allocations, or reserves are available to support their
activities. All monies must be spent in accordance with University
policy and sponsors' terms and conditions.
O Deficits generated on sponsored projects generally result from a
timing issue, when billing/revenue recognition lags behind
recording expenditures. Billing and revenue recognition is
dictated by the terms and conditions detailed in the award
document and resulting deficits are permitted during the life of
the award.
Deficit monitoring and
resolution
O Expenditures incurred must be allowed in accordance with University
policy, project terms and conditions and, when applicable, as defined
by Office of Management and Budget (OMB) Circular A-21, Cost
Principles for Educational Institutions.
O Project principal investigators must incur expenditures within the
performance period as outlined in the award documents. Exceptions
may be authorized only by the appropriate division of the Office of
Sponsored Research or by the appropriate official of the funding
agency.
O Project general ledgers must be reviewed regularly to ensure
budgetary control and appropriate recording of expenditures. For
federally funded projects, ledgers must be reviewed monthly.
O Project principal investigators must ensure that the expenditures
inccured are within the total authorized budget. In the event of a cost
overrun, the principal investigator is responsible for the transfer of
such overrun out of the project.
Effort reporting of federally sponsored
projects – some definitions
O Effort is the portion of time spent on a Federal research activity and
expressed as a percentage of the total professional activity for which
an individual is employed by the University of California. Total
professional activity includes research, teaching, patient care,
administrative and other University appointed activities
O Effort Reporting is a process required by Title 2 Code of Federal
Regulations (2 CFR), part 220 to verify that salary and wages charged
to federally sponsored projects are reasonable estimates in relation to
the actual work performed. An effort report is an “after the fact”
certification of all professional activities for which the employee was
compensated by the institution.
O Effort certification is to verify that effort supported (paid) by a federal
project has been performed as agreed, and that effort expended in
support of a federal project but not paid by the project has been
performed as agreed (committed cost sharing).
Effort reporting of federally
sponsored projects
O All personnel paid from, or with effort committed to, a federal-
sponsored project sponsored (including federal flow-through
subcontracts that the campus receives as a second-tier contractor of
the federal agency) are required to review, correct, complete and
certify effort reports on a regular basis. Exceptions are pre and
postdoctoral individuals supported 100% by a fellowship (stipends)
with no additional employment compensation and College Work Study
employees.
O An effort certification is required semiannually (six-month period
ending June 30 and December 31) for academic and non-academic
employees.
O Academic employees must certify their effort report either by
themselves or by another responsible academic official who has firsthand knowledge of the work performed.
Effort reporting of federally
sponsored projects
O Non-academic staff, postdoctoral scholars and students, however,
cannot certify effort reports. Their effort must be certified by a
responsible official who has firsthand knowledge of the effort using a
suitable means of verification that the work was performed.
O Any committed cost shared effort must be considered in the effort
report. Committed cost sharing also must be documented based on the
commitment made in the proposal and/or the award in accordance with
the sponsor's terms and conditions.
O Timely certification of effort reports is a condition of acceptance of
federal funding when direct salary charges are contemplated and
incurred or cost shared salary is proposed on an award. The effort report
should be certified within 120 days of the end of the reporting period.
Cost transfers
O Expenses should be charged directly to the fund to
which they pertain. Occasionally cost transfers may
be necessary to ensure that charges are made to the
appropriate funding source. Federal guidelines state
that frequent, tardy, and unexplained (or
inadequately explained) cost transfers should be
avoided, particularly in cases involving funds with
significant budget overruns or unexpended fund
balances. Such adjustments could raise serious
questions regarding both the propriety of the
adjustments themselves and the overall reliability of
the accounting system and internal controls.
Conditions Under Which Cost
Transfers Are Appropriate
Once an expense entry has been reported, it is appropriate to make cost
transfers only in the following situations:
O to correct an erroneous recording, such as instances in which the
original source document(s) (e.g., invoice, purchase order) cited an
incorrect fund, FY or account;
O to record a change in original decisions regarding the use of goods or
services (e.g., a case of beakers originally ordered for and charged to a
teaching program should be subsequently transferred to the research
project that actually used them). In requesting a cost transfer, a cost
transfer preparer should exercise caution and bear in mind that the
original recording was duly certified as proper and legitimate against
the fund, FY, and account cited; this original certification is now being
invalidated and a new certification is being made that the second
designated set of fund, FY, and account is the correct one to charge;
O to clear an overdraft of a sponsored fund to a discretionary fund.
Cost transfer criteria
Where possible, the cost transfer must relate to individual items of expenditures
(e.g., a cylinder of oxygen or fraction thereof) incurred by the department requesting
the adjustment and must be:
O in the same amount originally recorded in the general ledger or;
the appropriate fraction of the charge based on usage or benefit to the fund the
cost is being transferred to.
O The cost transfer must be fully explained, justified, and approved by the
appropriate authorized officials to ensure adequate review and legitimacy of the
transfer. For government funds, the explanation should indicate how the error
occurred and why the expense is being transferred to the fund now being
charged.
O The cost transfer must be in compliance with applicable campus and UC policies
and terms of funding source agreements.
O For any transfer involving federal funds, the transfer must be recorded in the
general ledger within 120 days of the original charge appearing in the ledger. If,
due to unavoidable circumstances, an adjustment has to be made beyond the
120-day period, the preparer must provide a full explanation including a welldocumented statement of events leading to the late adjustment.
Cost sharing
O Cost sharing is a commitment of University resources or funding that
supplements externally sponsored projects. Mandatory cost sharing
is that which is required by the sponsor and also quantified and
committed in the proposal. Voluntary committed cost sharing is not
formally required by the sponsor but is committed in the proposal
and becomes mandatory once the award is made, requiring
administrative tracking and reporting. These costs are not
reimbursed by the sponsor or charged to the sponsored project and
therefore must be supported by University funds.
O Committed cost sharing is a contribution of effort or other costs,
which are quantified in the proposal narrative, budget, budget
justification, or in the award document. Committed cost sharing may
be either mandatory or voluntary.
Cost sharing
O Cost sharing commitments on sponsored project proposals or
awards should be limited to situations where it is in the best
interest of the University. The interest of the University should
be considered in terms of the value of the endeavor to the
overall mission of the university and the extension of its
scientific knowledge base. Mandatory cost sharing policy of
the sponsor or the University's determination that such
commitments are necessary to ensure the success of specific
competitive proposals may be considered, but should not be
the sole or over-riding determiner in concluding that the
commitment is in the best interest of the university. Principal
Investigators and departments should refrain from making
commitments to cost share whenever possible.