Sponsored Programs at Penn Proposal Budget Preparation, Budgeting Using PennERA and Routing & Approval

1. Sponsored Programs at PennProposal Budget Preparation, Budgeting Using PennERA and Routing & Approval

2. Where Do You Start? • Gather the Facts • Talk to the Principal Investigator (PI) • What is the Scope of Work? • Who is the Sponsor? • Where will the work be performed? • Collaborators? • Consultants?

3. Sponsor Guidelines • Instructions and Contractual Terms • Requests for Proposal/Quote (RFP/RFQ) • Requests for Application (RFA) • Funding Opportunity Announcements (FOAs) • “Unsolicited” Applications • Send sponsor guidelines, instructions, contractual terms, etc., to Research Services

4. Cover Page • PI Name • Title • Name of Grantee • Trustees of the University of Pennsylvania • Period of Performance • Amount Requested • Required Signatures

5. RFQuotation RFApplication RFProposal • Government generates scope of work via Notices/Program Announcements. • You respond with how you will accomplish, budget and time frame. • Contract is usual award document for RFP/RFQ while a grant/cooperative agreement is usual award document for RFA.

6. Budget preparation is a collaborative effort! • Principal Investigator: • Should work with the Grants Manager to develop the budget. • Designates others who might have input, e.g., lab manager, research coordinator.

7. Reasons for carefully preparing the budget • Reduces the possibility of significant budget cuts by the sponsor. • Aids post-award management. • Aids the department in budget planning. • Significant budget changes are interpreted by sponsors as a change in scope!

8. Preparing the Budget • Costs requested in proposal budget must: • Be Allowable (Factors used in determining) • Allocable • Reasonable • Consistently Estimated • Directly benefit the proposed project Costs must be necessary for the performance of the award (OMB Circular A-21); SPP #2108, #2110, #2138

9. Regulatory guidance • CAS 501 (app. OMB A21, 48 CFR 9905.501) • “The purpose of this standard is to ensure that each educational institution's practices used in estimating costs for a proposal are consistent with cost accounting practices used by the educational institution in accumulating and reporting costs.”

10. Other considerations • Sponsor guidelines and limitations • Salary caps • F&A limitations • Direct cost or total cost limits • Expense category exclusions • Recover F&A as direct costs from non-governmental sponsors • SPP #2138 Direct Cost Expenditures for Non-Governmental Agencies • May be School-specific rules

11. Preparing the Budget (Salary) • Salary requests are expressed as % effort or person months • Plan realistically • Determine the percent of effort for all personnel needed to conduct the project • Downward adjustments of effort may need sponsor approval • Percent of effort=Percent of salary requested • Cost sharing is discouraged • Avoid hourly rates • Cannot usually charge clerical salaries or administrativecosts directly

12. Allowability of clerical and/or administrative staff expense • Generally part of F&A costs. • Possible exceptions (see OMB A21, Exhibit C): • Large, complex programs (e.g., Center grants). • Epidemiological studies, clinical trials. • Scheduling seminars/conferences attended by large numbers of participants. • Individual projects requiring project-specific tasks such as database management, human and animal protocols, etc.

13. Preparing the Budget (Benefits) • Fringe Benefits are charged as a % of Salary • As of 6/16/11, rates on federally sponsored projects: • Full-time employees – 31.8% • Part-time employees - 9.7% • For non-Federal sponsors, add Spouse and Dependent Tuition Benefit (2.2% ) for full-time employees • Current F&A and benefits rates

14. Preparing the Budget (Equipment) • Definition • “Equipment” costs $5,000 or more per item, and has a useful life of more than 1 year • Includes computer software that meets this definition (capitalized computer software). • Accounting Policy #1106.0 • Justification • Why is this item necessary to support the science? • When is it necessary? • Availability • Is the equipment available elsewhere in the University? • Competitive Bid Requirement

15. Preparing the Budget (Office Supplies) • Generally not treated as direct costs. • Can be allowable if specifically related to the project. For example: • Specific aim of the project is to create a manual or other instructional media. • Extensive human subjects data accumulation, questionnaires, etc., is required. • Must be necessary for conduct of project • OMB Circular A-21, Exhibit C

16. Preparing the Budget (Travel) • Usually restricted to employees • Domestic • Foreign • Fly America Act if Federal $$ • May require prior approval even if in budget

17. Preparing the Budget (Patient Care) • Defined in rate agreement:“…hospitalization and other fees associated with patient care whether the services are obtained from an owned, related, or third-party hospital or other medical facility…” • Excluded from MTDC base and F&A calculations.

18. What is not included in patient care? • Subject reimbursement and travel. • Costs of ancillary tests performed outside the hospital on a fee-for-service basis. • Costs accumulated in service centers at Penn, such as in Radiology for research patient care. • Consulting physician fees. • All of the above are “other” or “consultant” expense.

19. Preparing the Budget (Subcontracts) • Budget, including F&A costs • Copy of F&A rate agreement • Statement of Work (SOW) • Cover page/Letter of Intent with Authorized Signature • Reps/Certs required by sponsor

20. Preparing the Budget (Consultants) • Penn staff usually cannot be included in this category • If applicable, must coordinate payment through Penn Payroll Office. • Consultant’s letter of intent and cost • All costs related to the consultant including travel are usually accumulated in this category. • Statement of Work • Consortium agreements typically used if consultants are identified as Key Personnel.

21. Preparing the Budget (Other Direct Costs) • Service Center charges • Tuition and Fees (Research Projects) • Post Doctoral Health Insurance • Publication Costs • Protocol Review fees, when appropriate • Rent, when appropriate, but excluded from MTDC. • Animal per diem. • Subject compensation and travel SPP #2110 Federal Direct Cost Expenditures; SPP #2138 Direct Costs Expenditures for Non-Government Organizations

22. Preparing the Budget (F&A Costs) • F&A = Overhead = Indirect Costs • Pays for many costs that cannot be allocated to a specific project, i.e. utilities, administrative payroll and other support services, etc. • The “Colleges and Universities Rate Agreement” contains the federally negotiated F&A rates • F&A usually expressed as a % of a base • Modified Total Direct Cost Base (MTDC) • Excludes equipment, patient care costs, student tuition, and fees, alterations and renovations, rental of off-site facilities and the portion of each subcontract in excess of $25,000 • Check sponsor guidelines for appropriate base

23. Preparing the Budget (F&A Costs) • Which rate to use? • Research rates (on- and off-campus) [60% & 26%] • Certain DOD Contracts [62%] • Instruction [57%] • Other Sponsored Activities (on- and off-campus) [36% & 26%] • Examples: health or community service projects, seminars, conferences, exhibitions, lecture programs • Clinical Trials [28% Total Direct Costs (TDC)] • Corporate Contracts [62%] • Current agreement

24. When is the offsite rate applicable? • Use this rate whenever activity will occur for 3 months (or 25%) or more at a facility not owned by the University. • Consider preparing a split-rate budget when appropriate. • Remember that rent can be a direct charge when using the off-site rate. • Rent is excluded from MTDC and F&A calculations.

25. Don’t overlook • Are there humans involved? • Subject compensation and travel? • Related patient care costs? • Equate costs proposed to research plan, especially with the consents. • Are there animals involved? • Prepare detail cost estimate: included shipping and box charges. • Animal per diem? • Equate costs proposed to research plan.

26. …and more • Are there large pieces of equipment? • Installation and set-up included? • Maintenance contracts? • Space available or renovation costs included? • Provide a quote. • Are there pre- and or post-docs? • Tuition included? • Excluded from MTDC and F&A. • Health insurance costs listed? • Not excluded from MTDC.

27. Budget Justification • Each line item usually requires specific justification. • Unusual or extraordinary expenses such as equipment, clerical salaries and administrative expenses, may require additional justification. • Check sponsor guidelines for requirements.

28. Other Considerations • Specific Sponsor Requirements • NIH modular: ≤$250,000/year • Many non-Federal sponsors may not allow PI salary, benefits, travel, etc. • Penn Participation Agreement

29. Terms & Conditions • Terms and Conditions • Must be consistent with University mission of research, education and service • No bars on publication • University owns and controls intellectual property • Federal regulations appropriate to educational institutions are used

30. Budgeting Using PennERA Proposal Development (PD)

31. Budgeting Using PennERA PD • Type of budget is automatically determined by PD during proposal setup.

32. Budgeting Using PennERA PD • Type of budget is automatically determined by PD during proposal setup. • Proposal creator answers questions so that PD can “select” the correct configuration.

33. Sample Budget Configurations • Typical setup – can be detail or simplified entry. • Modified for NIH modular budget. • Federal S2S not requiring detail budget.

34. Budgeting Using PennERA PD • Two budget entry methods • Simplified • Minimal data entry • Use if not a Federal system-to-system (S2S) requiring a detail budget

35. Budgeting Using PennERA PD • Two budget entry methods • Detail • As required by Federal sponsor’s instructions • Can be used in any PD record

36. Detail – Personnel Expense

37. Detail – Personnel Detail Entry

38. Detail – Non-Personnel Expense

39. Detail – Non-Personnel Detail Entry

40. Detail – SubcontractExpense

41. Budgeting Using PennERA PD • Complete other sections: • F&A • Many proposals calculate F&A automatically • If manual entry is used, reset to autocalculation if editing expense data entry

42. Budgeting Using PennERA PD • Complete other sections: • Cost Sharing • Observe Penn’s cost-sharing policies • Complete cost-sharing form • Upload Budget Justification

43. Routing & Submission

44. PI and BA Submit Proposal • PI and Business Administrator (BA) have completed all components in PD • Participation Agreement signed and filed in department • Upload internal documents (e.g., subaccount worksheet) • Proposal is certified by PI in PennERA • BA completes e-transmittal form • Record submitted to routing path for internal review.

45. What’s a routing path? • …and…

46. What’s a routing path? • …and… • …and…

47. Research Services Review • Review e-Transmittal Form & PI certification for Accuracy & Completeness • Regulatory Issues • Determine Type of Award • F&A Cost Review • Conflict of Interest • Cost Sharing • Terms & Conditions if applicable • Check for electronic submission validation issues

48. Purpose of e-Transmittal • The Transmittal Form • Internal Form • Does not get submitted to sponsor • Uses • Departments, make commitments & determine that project is within total program and academic objectives of department • Deans, determine that project is consistent with the total program objectives of the school and that commitments for project (including any cost sharing/matching funds) are acceptable • Research Services uses it to create funds; accuracy matters

49. Proposal Routing and Submission • Approvals • If project includes faculty from multiple schools/departments • Plan for additional time to secure appropriate approvals • If project includes participation from another institution • Information from the other institution must also be obtained and presented in the application • Plan for delays • Electronic proposal submission issues • Administrative support assisting with multiple grant applications from multiple PI’s • Broken copiers, scanners

50. Proposal Routing and Submission • Applications requiring additional information (financial reports) require more time • Responses to RFP’s • Contractual terms sent to Research Services as soon as possible • Policy requires 5 days • PI’s transferring from another institution should begin the transfer process as soon as they have accepted a position at Penn • Observe individual School deadlines