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MANAGING SPONSORED PROJECTS FINANCIAL COMPLIANCE

MANAGING SPONSORED PROJECTS FINANCIAL COMPLIANCE. May 1, 2008 Office of Grants &Contracts Accounting. FINANCIAL COMPLIANCE. You Should Understand: Key Areas of Risk Your Responsibilities Resources and Tools Available. FINANCIAL COMPLIANCE What are the Risks Related to Grant Awards?.

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MANAGING SPONSORED PROJECTS FINANCIAL COMPLIANCE

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  1. MANAGING SPONSORED PROJECTSFINANCIAL COMPLIANCE May 1, 2008 Office of Grants &Contracts Accounting

  2. FINANCIAL COMPLIANCE You Should Understand: • Key Areas of Risk • Your Responsibilities • Resources and Tools Available

  3. FINANCIAL COMPLIANCEWhat are the Risks Related to Grant Awards? • Misuse of funds (purchasing cards, fraud) • Improper cost allocation (multiple projects) • Accelerated expenditures • Unobligated balances • Cost transfers • Restrictions on Notice of Award • Financial conflict of interest • Time and effort reporting • Unallowable costs

  4. FINANCIAL COMPLIANCEWhy All The Fuss? Because of Potential • Impact on MUSC • Shutdown of Operations • Fines and Penalties • Damage to University’s Reputation • Susceptibility to False Claims Allegations

  5. FINANCIAL COMPLIANCEWhy All The Fuss? Because of Potential • Impact on You • Loss of PI Status • Debarment • Possible Criminal and Civil Charges Remember: One of our primary goals in GCA is to safeguard the University and you

  6. FINANCIAL COMPLIANCEWho is Responsible? • Institution? • Principal Investigator (PI)? • Departmental Administrator? • Central Administration?

  7. FINANCIAL COMPLIANCEWho is Responsible? As PI, you: • Make the budgetary decisions • Approve expenditures • Should know special terms and conditions • Approve final Financial Status Reports (FSRs)

  8. FINANCIAL COMPLIANCEWho is Responsible? Tips: • Always remember that the financial aspects of your grant are just as important as the science • Don’t ever hesitate to question an expense on your grant

  9. FINANCIAL COMPLIANCETraining • What would your responses to the following questions be? • What training have you attended in the past 18 months? • Who sponsored this training? • What training programs are provided by the University? • Does MUSC have policies and procedures to ensure compliance with federal regulations? • Make every effort to attend training

  10. FINANCIAL COMPLIANCEUnderstanding Direct Costs vs. F&A Costs • DIRECT COSTS • Federal Definition (OMB Circular A-21, Section D) • F&A COSTS • Federal Definition (OMB Circular A-21, Section E) • It is a Direct Cost, but is the cost allowable? • Does the cost meet the following criteria? • Reasonable • Allocable • Allowable • Consistently Treated

  11. FINANCIAL COMPLIANCE Avoiding the PitfallsAllowable/Unallowable Expenditures • Know what charges are not applicable to your grant • If you have concerns of allowabilty or allocability question your Departmental Administrators • Become familiar with costs that can and cannot be charged direct to your grant

  12. FINANCIAL COMPLIANCEAvoiding the PitfallsCost Transfers • Try to avoid having frequent transfers • Understand the University’s Cost Transfer Policy • Be aware of the NIH Cost Transfer Policy • Question transfers off and onto your grant • Make sure cost transfers are adequately justified and well documented • Avoid transfers at the end of a grant spending period

  13. FINANCIAL COMPLIANCEAvoiding the PitfallsActivity Reporting • Be aware of the University’s policies and understand them • Submit Activity Reports on time • Be able to reasonably explain how you track the amount of time spent on an award • By You • By a Trainee or Post Doc • Know who your Department Coordinator is • Understand how activity is reported, to whom, and how often • Understand how your activity is approved • Know who maintains the Activity Reports • Make sure that you account for all of your activity

  14. FINANCIAL COMPLIANCEMost Common Direct Costs • Salaries & Fringe Benefits • Equipment • Supplies • Patient Care Cost • Travel • Subrecipient Agreements

  15. FINANCIAL COMPLIANCESalaries & Fringe • Combined Salary • NIH Salary Cap • Affiliate Salary Worksheet (Affiliate Salary - Policy/Procedure 4-3.07) • Fringe Benefits – rates negotiated only for grants • MUSC Online Activity Reportinghttps://appserve.musc.edu/effort

  16. FINANCIAL COMPLIANCEEquipment • Definition • Special purpose equipment • General purpose equipment • Excluded from the F&A Calculation on federal awards • Rebudgeting may require prior approval from the sponsor

  17. FINANCIAL COMPLIANCESupplies • Materials & Supplies • Expendable items • Medical/scientific/laboratory supplies • Equipment under $5000 or a useful life > 1 yr. • Office Supplies • Normally unallowable as a direct cost on federal awards

  18. FINANCIAL COMPLIANCEPatient Care Costs • Account Code • Most commonly used chart of accounts • Inpatient and outpatient expenses • Rebudgeting • Excluded from F&A Cost Calculation for Federal Awards

  19. FINANCIAL COMPLIANCETravel • Who can travel? • Contact GCA for further assistance prior to incurring travel expenditures. • Travel expenses incurred by consultants & private entities are subject to the Federal Travel Regulationshttp://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=17943&contentType=GSA_BASIC

  20. FINANCIAL COMPLIANCESubrecipient Agreements • Definition • Prior approval • Applicable F&A • Subrecipient invoice approvals

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