Fiscal Compliance Requirements for Sponsored Programs University of Missouri – St. Louis College of Education March 6,

1. Fiscal Compliance Requirements for Sponsored Programs University of Missouri – St. Louis College of Education March 6, 2009

2. Learning Objectives • To understand: • Compliance requirements related to allowability of costs • Responsibility of Fiscal Officer and Principal Investigator • Frequent issues and impact of non-compliance

3. Compliance Requirements Who sets the requirements? • Office of Management and Budget (OMB) – Oversight agency for the federal government • OMB Circulars – The federal rules for how awards are to be administered. • Sponsors – Individual sponsors may have additional requirements • APM and BPM – policies established jointly by Campuses and UM System

4. Compliance Requirements Whatcompliance requirements determine allowability on a sponsored program? • OMB Circular A-21- Cost Principles for Educational Institutions • Allowable Direct Costs + • Allocable Facilities & Administration • Specific Sponsor Administrative Guides

5. A-21 Definitions • Direct costs must be: • Identified specifically for a particular sponsored award • Directly assigned with relative ease and a high degree of accuracy • Consistently treated in like circumstances • Supported by documentation

6. A-21 Definitions • F&A is: • Incurred for a common or joint objective (e.g. utilities) • Cannot be easily identified with a particular award • Facilities: depreciation, interest on related debt, operational, maintenance, and library costs. • Administration: departmental, sponsored projects, student services, and other general administrative costs.

7. Importance of F&A • How are support staff paid? • What is the source of funding for the building where my lab is located? • How are the utilities paid? • How is research infrastructure paid for? • Who prepares my financial reports?

8. A-21Requirements • Reasonable: • Act with due prudence • Consistent with University policies and procedures • Necessary for performance of the sponsored award • Arms length and legal transactions

9. A-21 Requirements • Allocable: • Incurred solely to advance the work under the agreement • Benefits the sponsored program in proportions that can be reasonably approximated

10. A-21 Requirements • Consistent treatment: • Practices consistent with reporting other costs for: • same purposes, or • like circumstances • Conform to limitations or exclusions: • Sponsor may be more restrictive than A-21 • Specified in the award

11. Allowable Direct Charge?

12. A-21 Compliance • Certain costs are expressly unallowable: • Alcoholic beverages • Alumni activities • Bad debts • Donations and Contributions rendered • Entertainment • Furnished automobile • Goods or services for personal use • Housing and personal living • Losses on other sponsored agreements

13. A-21 Compliance • Certain costs are unallowable with exceptions: • Contingency provisions • Fines and penalties • Fundraising and investment costs • Lobbying • Pre-agreement costs • Selling and marketing costs • Student activity costs • Must be specified in the agreement to be allowable!

14. A-21 Compliance • Allowable - Direct charging of F&A costs: • Unlike circumstance must exist • Documentation to support • Include in the budget and agreement • Sponsor approval • Approval by sponsor without the above does NOT ensure allowability!

15. A-21 Compliance • Allowable costs – frequent issues: • Communications (phone, etc) • Federal Express and postage • Administrative Salaries • Equipment - capital and computer • Memberships and/or subscription fees • Materials – office, lab, program • Meetings • Travel • Documentation and sponsor approval required

16. Documentation Requirement • What is considered adequate documentation? • Sufficient Documentation should state: • the charge is allowable, and • the charge directly benefits the related award. • Substantial Documentation (for cost transfers > 60 days old) should address: • Who, What, When, Where, and Why? • What will be done to ensure this does not reoccur? • Retain for 3 years or longer per sponsor

17. Points to Remember • Allowability considerations throughout: • Proposal and budget • Monthly Managerial review • Cost Transfers • Cost Sharing • Subaward payments • PI Certification at end of award

18. PI Responsibility • Be knowledgeable of compliance requirements and restrictions • Shares administrative management responsibility with the Fiscal Officer • Ensuring all charges are: • Allowable • Authorized • Documented • The PI has ultimate responsibility for an award

19. Fiscal Officer Responsibility • Shares administrative management responsibility with the PI • The Fiscal Officer should be aware of: • Compliance requirements • Unique restrictions by sponsor • Budget • Alert PI of potential or known compliance issues • Contact ORA for assistance

20. Fiscal Officer Responsibility • Ensure transactions are properly recorded • Specific responsibilities include: - Processing expenditures - Providing monthly budget variance reports - Preparing timely cost transfers - Closing of award and deliverables - Ensure documentation exists for all charges

21. Frequent Issues • Unallowable costs directly charged to award • Lack of supporting documentation • Purchases late in the award period • Costs outside period of availability • Unlike circumstances not set out in sponsor agreement

22. Impact of Non-Compliance • Questioned or unallowable costs • Repayments to the sponsor • Fines and/or sanctions • Subject to additional external audits • Jeopardize future funding opportunities • Damage to reputation

23. Checklist for Success • Ensure costs are: • Authorized in the budget & agreement • Within the period of availability • Charged timely to the project • Meet the requirements of allowability • Appropriately documented • Timely review budget and costs • Make timely and allowable cost transfers

24. References Where can I get more information? • Reference Guide for Sponsored Programs • University Controller’s Office Policies – APM – Section 60 • OMB Circular A-21 • Facilities & Administration Fiscal Misconduct Reporting Line

25. Contact Information • Tina Hyken • Business and Fiscal Operations Specialist • 314.516.5127 • Hykent@umsl.edu • Karen Boyd • Manager, Business/Fiscal Operations • 314.516.5923 • boyd@umsl.edu