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Grants & Contracts Accounting 20 February , 2014

Financial Management. Grants & Contracts Accounting 20 February , 2014. Financial Management. This Course has been designed to provide a basic understanding of: The flow of activities from proposal to closeout, The work to be done, Activities performed by G&C Accounting

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Grants & Contracts Accounting 20 February , 2014

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  1. Financial Management Grants & Contracts Accounting 20 February, 2014

  2. Financial Management This Course has been designed to provide a basic understanding of: • The flow of activities from proposal to closeout, • The work to be done, • Activities performed by G&C Accounting • Activities performed by Unit Financial Officers • The tools available for your use, and • The places where you can obtain assistance

  3. Financial Management Additional training available: • GT Grants System • Electronic Cost Transfer System • Salary Planning & Distribution (SPD) • SPD System – Ad Hoc Reporting • General Ledger – Ad Hoc Reporting • Allowable/Unallowable Costs • OMB Circulars (With OSP Training) • Other: OSP Budget Wizard Training

  4. Financial Management Major Topics to be Covered • Introduction to Grants & Contracts Accounting • Establishing Sponsored Projects in the G&C System • Managing Sponsored Program Activities • Monitoring Sponsored Program Activities • Completion & Closeout of Sponsored Programs

  5. Introduction Key Responsibilities • Office of Sponsored Programs • Resident Instruction (GTRC) • GA Tech Research Institute (GTARC) • Grants & Contracts Accounting • GTRI Accounting • Grants Management System

  6. Introduction to Grants & Contracts Accounting • Received $622 million in new awards in FY 2013 • 72% increase over last 5 years from ~$445 million • Expended $766 million in awards in FY 2013 • Managed 13,577 Projects (Including Sub-Projects) • 6,885 exempt employees funded by Sponsored Projects

  7. Introduction to Grants & Contracts Accounting Five Operating Teams – Staff Listing (Handout #1) • Project Accounting • Cost Accounting • SPD Center • Reporting and Compliance Systems • BOR Sponsored Programs

  8. Introduction to Grants & Contracts Accounting • Project Accounting • Sponsored Project Management • Project number assignments • Project set-up • Post initial project budgets • Review/Approve/Process: Sub-Project requests, budget revisions, cost transfers • Invoicing • Sponsor financial report preparation • Assist with audit requests • Grants Management (GM) system operations • Grants Management (GM) system training

  9. Introduction to Grants & Contracts Accounting • Cost Accounting • F&A, fringe benefits, and GSTRP rate studies (Handout #2) • Rate negotiations and audits • Sponsored activities reporting • Service Center rate studies • Salary Processing & Distribution Center • SPD system management • Process salary distribution changes, when required • Prepare and distribute system reports • Monitor and process late salary distribution changes • SPD system training

  10. Introduction to Grants & Contracts Accounting • Reporting and Compliance Systems • Designs, tests, and delivers various G&C reports for campus administrators and senior management • Conducts quarterly and annual reviews of expenditures on sponsored projects, including invoicing and financial reporting of those expenditures • Maintains and manages the Grants Management Accounting sub-system (GM) • Conducts training related to the Grants Management Accounting sub-system 5. BOR Sponsored Operations • Special unit established to manage contractual and financial activities of the BOR Office • Services provided are similar to activities of Unit Financial Managers and Administrative Managers of Academic Units

  11. Establishing Sponsored Projects G&C System Topics: • Project Header and Project Numbers • Project Budget – From the Project Header • Cost Sharing Projects • Establishing Sub-Projects • Special Terms and Conditions

  12. Establishing Sponsored ProjectsG&C System Project and Fund Numbers • Assigned at the time of acceptance of award • OSP completes agreement and requests project and fund number from G&C • G&C assigns numbers and enters into OSP system • OSP completes project header for distribution (Handout #3) Sponsored Project Established in GL & GM • G&C receives project header information from OSP • G&C enters approved budget in prime project (Handout #4)

  13. Establishing Sponsored Projects G&C System Cost Sharing Project Established • G&C Establishes Project in GL & GM • Only contractually obligated cost sharing • Total obligation reported on PEB summary (Handout #5) • State Funded Budgets are Established by Department • Funding is provided through Budget Office • State-funded budgets cover one fiscal year • In-Kind Cost Sharing Procedures • Prepare plans for documentation at project initiation • Provide supporting documents to G&C for entry into GT Grants in Other Memo expenditure accounts

  14. Establishing Sponsored ProjectsG&C System Establishing Sub-Projects • Process managed by G&C (Not recorded in OSP) • https://gtwebapps.gatech.edu/cfprod/grantsys/ • Sub-Projects requested by units using GM Budget Revision to Sponsored Project form (Handout #6) • Why create sub-projects? • PI in another department will be performing some of the work • A piece of the award will have a different F&A rate applied (e.g. Participant Support)

  15. Establishing Sponsored ProjectsG&C System Special Terms & Conditions - Addressed at Project Initiation • Standard GIT/GTRC procedures provide for CRNF • Monthly Cost Reimbursement No Fee • Invoices are prepared from GM at month-end • (Same Information as month-end PEB) • Minor Billing Variations are Managed by GM Billing • Quarterly billing provisions • Advance payment provisions • Pre-established billing amounts/schedule • Special invoice formats (information same as PEB) • Bill upon a milestone • Need to establish plan for notification of status

  16. Establishing Sponsored Projects G&C System • Conditions Requiring Special Projects or Reports • May require collection of special information from unit • Project budget projections • Invoice details (Handout #7) • Time & Materials billing provisions (Handout #8) • Conditions Requiring Special Monitoring/Reporting • Milestone billing provisions (Who monitors the milestones?) • Fixed Price Agreements (Handout #9) • Not-to-exceed Price Agreements • Notification required when 75% of budget is expended

  17. Managing Sponsored Program Activities Topics: • Unit/Department Responsibilities • Direct and Indirect Charges to Sponsored Projects • Plan Confirmation System & SPD • Budget Revisions to Sponsored Projects • Undesignated Sponsor • Cost Transfers • Special Costing Procedures • OMB Circular A-133 Audit Exceptions • Audit Findings

  18. Managing Sponsored Program Activities Unit/Department Responsibilities • Establish department files • Appoint personnel according to project budget • Process SPD changes as needed • Manage unit undesignated sponsored projects • Purchase required Materials and Supplies • Approve allowable expenses • Control expenditures within approved budgets • Initiate action to correct budget or expense variances • Monitor project deliverables • Monitor cost sharing requirements • Initiate and support closeout procedures

  19. Managing Sponsored Program Activities • Unit Financial Manager’s Signature of Approval of transactions is used to Support: • Certification Statements Required on Invoices: • I certify that all payments are for appropriate purposes and in accordance with the agreement set forth in the application and award document. • I certify that to the best of my knowledge and belief the data above are correct and that all outlays were made in accordance with the grant conditions or other agreement and that payment is due and has not been previously requested. • Would you sign these statements for your project charges?

  20. Managing Sponsored Program Activities Direct and Indirect Charges (Handout #10) • Direct charges must meet the following requirements: • Goods or services are directly relatedto the project scope • Charges are reasonable and allowable by the project budget, terms, and conditions of the award • Charges have been incurred within project time period • Charges incurred inaccordance with GIT financial and accounting policies & procedures • Charges have been incurred in accordancewith terms & conditions of sponsored agreement

  21. Managing Sponsored Program Activities • Charges Specifically Identified as Indirect (F&A) • Departmental administrative and clerical Staff • Salaries and expenses charged to: • Departmental Administration – Instruction • Departmental Administration – Research and other sponsored projects • Office supplies, local telephone service costs • Departmental/unit postage, copying, and shipping costs • General purpose equipment

  22. Managing Sponsored Program Activities Plan Confirmation System & SPD • Plan Confirmation System Requirements – See handbook • New employees and acknowledgement form • Training video • Annual Statement of Reasonableness (ASR) of salary distribution • Acknowledgement Form – Required for SPD coverage • Distributed at new faculty orientation • Mailed to department for other additions during the year • Employee Responsibilities • Review monthly updated Workload Assignment Form • Inform supervisor of any significant changes • Definition of significant changes (Handout #11) • Retain workload assignment files for the year

  23. Managing Sponsored Program Activities • SPD System Procedures • Current period change - less than 60 days • Late changes (over 60 days) same fiscal year - with justification • Provides for rejection of proposed salary distribution if over 120 days after payment (unless charges are being moved to Institute Funded projects) (Handout #12) • Note: Prior fiscal year changes are not processed by the SPD system

  24. Managing Sponsored Program Activities Example SPD System Reports: • New Workload Assignment Form – (Handout #13) • Annual Statement of Reasonableness of salary charges (Handout #14) • Forms must be completed accurately with all required signatures to be accepted • When ASR’s are not submitted, salary charges to sponsored projects may be questioned or rejected by sponsors

  25. Managing Sponsored Program Activities Budget Revisions to Sponsored Projects • Federal Demonstration Partnership (FDP) • Budget revision initiated by department via GM • Reviewed and approved by G&C • All revisions must comply with the terms and conditions of the award

  26. Managing Sponsored Program Activities Undesignated Sponsored Projects (Handout #16) • Undesignated Sponsored Instruction (580), Sponsored Research (680) and Sponsored Other (880) projects were devised as a means of facilitating the budgeting of personal services only when specific accounts were not known. • Undesignated expenditures must be completely removed from the accounting records before the end of each fiscal year.

  27. Managing Sponsored Program Activities General Guidelines/Applicable Policies • Undesignated accounts should only be used where there exists a high degree of assurance that the projects will be approved or where administrative delays have been encountered in the issuance of award documents and the assignment of project numbers. • They were never intended as a budgetary device to cover salaries for which adequate funding had not been made and only hopes exist to cover them in the future.

  28. Managing Sponsored Program Activities Undesignated Sponsored Projects - Reporting • A report is produced each month by the Salary Planning and Distribution (SPD) Center for each unit and for the Provost Office. • For the first nine months (July - March) of the fiscal year, any undesignated expenditures over 60 days will require justification in accordance with procedures managed by the Provost Office. • Prior to the end of the fiscal year, any balances in the Undesignated Sponsored Accounts must be removed and posted to an appropriate unit project or other funding source.

  29. Managing Sponsored Program Activities Cost Transfers • Definition: Action to move incurred costs from or to a Sponsored Project • Cost transfers should be made within 60 days of the date that the costs were incurred to be considered timely • All costs moved to a sponsored project must be allowable and in accordance with the terms and conditions of the award • Most Cost Transfers will be processed using the ECT System • Other Requests for cost transfers are to be documented on the Cost Transfer Request Form (Paper-based) (Handout #16) • Note: Encumbered costs corrections are to be moved according to the procedures of the Procurement Office

  30. Managing Sponsored Program Activities Transfers Requiring Special Documentation • Transfers made over 60 days after expenditure • Transfers to a project after term date • Transfers of equipment costs at end of project (final 90 days)

  31. Managing Sponsored Program Activities Preparing the Paper Cost Transfer Request • Complete all Sections of the form • Provided appropriate justification as follows: • All requests for cost transfers must provide documentation that the costs being moved to a project are directly related to the project scope, allowable by the project budget, and the expense is required to complete the terms of the sponsored agreement • Attach supporting documentation with details • Approval of PI or Authorized Financial Officer

  32. Managing Sponsored Program Activities Updates to Cost Transfer Policy • Provides for rejection of proposed cost transfers TO sponsored projects if over 120 days after payment • Charges over 120 days after payment will be accepted for Institute Funded projects and projects within the same fund • Similar to SPD 120 day policy

  33. Managing Sponsored Program Activities Electronic Cost Transfers (ECT) System • The purpose of the electronic cost transfer is to provide authorized campus users the ability to make timely cost transfers between projects, within certain restrictions • The electronic cost transfer system features are used on both sponsored and non-sponsored projects • Authorization to use the ECT system based on prior training, completion of ECT training program and examination (Handout #17 - Authorization Form)

  34. Managing Sponsored Program Activities Benefits of the ECT System • When applicable, the ECT System will replace current year paper processing that is time consuming and difficult to monitor • Eliminates the need for duplicate data entry • Utilize systems edits to test for keying accuracy • Utilize system edits to test for available funds • Has improved the timeliness of corrections

  35. Managing Sponsored Program Activities Special Costing Procedures • Graduate Student Tuition Remission Program (Handout #18) • Graduate Teaching and Graduate Research Assistants are covered by the program as appointed by Academic Units • Charges are assessed on a monthly basis at predetermined rates • Charges are prorated to benefiting projects based on percent of effort • GSTRP charges for Institute Funded (non-sponsored) Projects are supported by GIT with no GSTRP charges • Requests for Waivers are considered by Vice Provost for Research

  36. Managing Sponsored Program Activities Special Costing Procedures (Cont’d) • Cost Sharing Requirements, Records, Reports • Recognition of F&A charges on cost sharing project • Claimed on G&C Accounting System • Cost Sharing Certifications (Handout #19) • Required for third party cost sharing • Cost Sharing Requirements - OMB Circular A-110 (Handout #20) • Fabricated Equipment Charges • Sponsored projects provide for construction of an equipment item as a Project Deliverable (Handout #21) • Memberships • Institute policies and procedures limit membership charges to institutional memberships • Guidelines for membership expense (Handout #22)

  37. Managing Sponsored Program Activities OMB Circular A-133 Audit Exceptions • On an annual basis, the Institute contracts for an audit of sponsored program activities according to the provisions of OMB Circular A-133 • For all audit exceptions identified during the audit, the Institute must respond to the findings and propose a Corrective Action Plan designed to avoid suchexceptions in the future • Exceptions identified in recent audits include: • Late submission of sponsored program progress reports and financial reports • Lack of adequate cost share documentation and reporting • Late salary distribution cost transfers • Inadequate supporting documentation for charges

  38. Managing Sponsored Program Activities Audit Findings • Notification letters are sent to each Project Director, Department Head, Unit Financial Officer, OSP Contract Officer and G&C Accountant for each sponsored project that had an exception • Example letters are presented in the supporting documents • Late report submission (Handout #23) • Matching funds not properly documented and reported to sponsor (Handout #24)

  39. Managing Sponsored Program Activities Audit findings • Settlements at Other Institutions Effort (Personal Services) Reporting and Administrative Expenses Charged as Direct

  40. Monitoring Sponsored Program Grants Management Reports (Handout #’s 25, 26, 27) • Expenditure Reports and Burn Charts • Project Deliverables Reports – OSP • Project Billing and Collection – OSP • Exception Reports – Initiated by G&C • Actions that Delay Billing and Collection

  41. Monitoring Sponsored Program Grants Management Reports • Project Expenditure and Budget (PEB) Reports • Available on Web with daily updates (Handout #4) • Presents summary information by budget category • Provides month, fiscal year, and project to date balances • Reports individual project and combined reports (Total Award by Fund)

  42. Monitoring Sponsored Program Grants Management Reports (Cont’d) • Project Status Reports • Invoice History by Fund • 90 Days to Expiration Date • Past Term Report

  43. Monitoring Sponsored Program Expenditure Reports and Burn Charts • Presents PEB details at month end • Presents chart of available funds by month • Projects future months activity • Announcement and example (Handout #28)

  44. Monitoring Sponsored Program Project Deliverables Report - OSP

  45. Monitoring Sponsored Program Project Billing and Collection - OSP

  46. Monitoring Sponsored Program Actions that Delay Billing and Collection • Agreements that require supporting documentation • Over Budget conditions (No Invoices) • Late Deliverables • Not meeting all cost sharing requirements

  47. Monitoring Sponsored Program Sponsored Project Exception Reports • Monthly report prepared by G&C Accounting Provided to help identify projects that require attention to avoid problems • Identifies Sponsored Projects with: • Expenditures in excess of budget • Expenditures in excess of budget and post term

  48. Completion & Closeout – Sponsored Programs • Preparing for Project Close-outs • Sponsored Expenditures Should Match Budget • Have Cost Sharing Obligations been met? • Have Project Deliverables been Provided to Sponsor? • Watch for Actions that Delay the Closing Process

  49. Completion & Closeout – Sponsored Programs • Preparing for Project Close-outs • Start the process 90 Days before termination date • Utilize all monitoring procedures • PEB and General Ledger Expense Reports • Deliverable schedules • Billings and Collections on schedule • Consider any special terms & conditions • Consider the need for an extension of time

  50. Completion & Closeout – Sponsored Programs • Sponsored Expenditures Should Match Budget • Confirm adequacy/accuracy of project budget and charges • Request main project budget revision from Sponsor, if required • Confirm adequacy/accuracy of sub-project budget and charges • Address instances of low expenditures • Address instances of over expenditures • Reassign available budgeted funds if needed • Make required revision to sub-project budgets as needed • Confirm status of billings, collections, and match to PEB

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