PRO334 - Budget Management for Sponsored Programs

1. PRO334 - Budget Management for Sponsored Programs

2. Before We Start… Cell Phones Pro 3 Certification Materials Roster Questions Break/Restrooms 10 10 Evaluations Fire Drill

3. Sponsored Research Training Series http://hr.ufl.edu/training/research/index.html

4. Welcome Today’s Instructors • Tiffany Schmidt, Contracts & Grants • Jonathan Evans, Contracts & Grants-IFAS

5. Welcome Audience Demographics • Contracts & Grants-COM? • Contracts & Grants-HSC? • Contracts & Grants-Campus? • Contracts & Grants-IFAS? • Contracts & Grants-Engineering? • PI’s or Principal Investigators? • Auditors?

6. Agenda - Course Purpose Course Purpose • Help Faculty and Department Administrators understand how to appropriately manage their sponsored programs funds

7. Course Overview Key Concepts Regarding Grants Budget Management • Rules and Regulations • Understanding and Managing the Budget • Expense Monitoring and Reconciliation • Cost Transfers • Closeout Procedures

8. Pre Course Quiz Question 1 If funding is released into Commitment Control (KK) Level 3, this alleviates the need to request a budget transfer in the future? False Question 2 As long as the salary retro does not cross a “prior-prior” fiscal year, such an action would fall within existing UF policies? False Question 3UF Faculty (or their designated Department Administrator) are expected to reconcile expenditures on a quarterly basis? False

9. Pre Course Quiz Question 4Budget Account Codes are used in myUFL to release funding on all awards. Is it True (or False) that the Budget Account Code 700005 is used for both Materials and Supplies and Subcontracts? True Question 5If funding is under the FDP then no prior permission is needed to re-budget your awarded dollars to foreign travel? False

10. Rules and Regulations

11. Rules & Regulations Pyramid Which rules and regulations apply to your project? Let's start here. OMB Circulars A-21, A-110, A-133 http://www.whitehouse.gov/omb/circulars/index-education.html

12. OMB Circular A-21 Federal Awards • US Office of Management and Budget (OMB) • OMB Circular A-21, “Cost Principles for Educational Institutions” • http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html • Four Primary Areas: • Reasonable • Allowable • Allocable • Consistent Treatment

13. Reasonable Costs OMB Circular A-21, Section C.3 Reasonable Costs • “A cost may be considered reasonable if the nature of the goods or services acquired or applied, 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.”

14. Allowable Costs OMB Circular A-21, Section J Allowable Costs • “Sections 1 through 54 provide principles to be applied in establishing the allowability of certain items involved in determining cost. These principles should apply irrespective of whether a particular item of cost is properly treated as direct cost or F&A cost.” • Note that unallowable costs may not be charged to a federal award, used for cost sharing, or used in UF’s F&A proposal. • Failure to mention a particular item within Section J does not imply that it is either allowable or unallowable.

15. Allowable or Unallowable? Refer to Handout #1

16. Allowable or Unallowable? • Allowable Charges • Lab Supplies • Equipment • Salary and Fringe • Post Doc/Research Associate • Domestic/Foreign Travel • Unallowable Charges • First class travel • Entertainment • Alcoholic beverages • Fines and penalties • Recruitment Costs • Unallowable Activities • Fund Raising • Lobbying • Public Relations • Alumni Activities • Allowable Activities • Meetings and Conferences • Extension/Training Refer to Handout #1

17. Allocable Costs OMB Circular A-21, Section C.4 Allocable Costs • “A cost is allocable to a particular cost objective (i.e., a specific function, project, sponsored agreement, department, or the like) if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship.” • Cost Allocation Methodology: Section C.4 (b-d) • If a cost benefits two or more projects, the cost should be allocated based on the proportional benefit. • Subsection d (Documentation and Allocation Standard).

18. Allocable Costs OMB Circular A-21, Section C.4 (b-d) Allocable Costs Cost Cannot be Allocated for the following: • Shifting “cost overrun” from one project to another. • Avoiding restrictions imposed by law or terms of the sponsored agreement. • Other reasons of convenience, such as: • "Well…that project has more money."

19. Allocable Costs Let’s Look at Some Examples

20. Example 1 Example 1: • A PI has two projects, both requiring the purchase of a multispectral camera, the camera will be used for these two projects only; how would you allocate this expense? • Would you require any documentation? • If yes, what specific documents would you require?

21. Example 2 Example 2: • A PI comes to you with a large equipment purchase; she previously requested the balance and end dates on all of her sponsored projects. She requests that the equipment purchase be placed on a project ending at the end of the month with a large balance remaining. • How would you allocate the equipment? • Would you require any documentation? • If yes, what specific documents would you require?

22. Example 3 Example 3: • A PI comes to you asking that a new computer purchase be distributed over three different projects, all ending this month. • How would you allocate the equipment? • What questions might you ask of the PI to aid in the allocation process? • Would you require any documentation? • If yes, what specific documents would you require?

23. Example 4 Example 4: • A PI submits a Travel Request. The project team will be travelling to a professional conference to present their findings for two separate federal awards. The PI will be presenting at four different sessions for the first award and two different sessions for the second award. • How would you allocate the travel expenses? • Would you require any documentation? • If yes, what specific documents would you require?

24. Example 5 Example 5: • A research and education center has a tractor used for three research projects as well as general lawn upkeep. The tractor requires regular maintenance and the maintenance charge has come across your desk. • How would you allocate the maintenance for the tractor? • Would you require any documentation? • If yes, what specific documents would you require?

25. Example 6 Example 6: • A department has ordered a pallet of soil that costs $400. The pallet contains 50 bags to be used for various research projects. A PI is conducting an experiment that will use 10 bags of soil. • How much of the cost would you allocate to the PI’s project? • Would you require any documentation? • If yes, what specific documents would you require?

26. Direct or F&A OMB Circular A-21, Section F.6.b Determination of Departmental costs as direct or F&A (Facilities & Administrative) • Special care should be exercised to ensure that costs incurred for the same purpose in like circumstances are treated consistently as either Direct or F&A. • “Items such as: Salaries of Administrative and Clerical Staff, Office Supplies, Postage, Local telephone costs, and Memberships shall normally be treated as F&A costs.”

27. CAS - Cost Accounting Standards OMB Circular A-21, Appendix A Cost Accounting Standards (CAS) CAS 502 – Consistency in allocating costs incurred for the same purpose • “Adherence to these cost accounting concepts is necessary to guard against the overcharging of some cost objectives and to prevent double counting.” • Attempts to ensure that the federal government is not charged twice for the same cost. • UF CAS Policy:http://www.fa.ufl.edu/departments/cost-analysis/costing-guidelines-and-policies/charging-costs-directly-or-indirectly-to-sponsored-projects/ • CAS Exemption Form: http://research.ufl.edu/research/pdf/casexemptionform.pdf

28. CAS 502 - Consistent Treatment OMB Circular A-21, Appendix A CAS 502 – Consistency in allocating costs incurred for the same purpose • Administrative/Clerical salaries and fringe • Staff recruitment and relocation • Local Telephone Services • Telephone lines and equipment costs • Cell phones • Fax machines

29. CAS 502 - Consistent Treatment OMB Circular A-21, Appendix A CAS 502 – Consistency in allocating costs incurred for the same purpose • Office supplies • General computer services / networking • General purpose equipment • Personal computers and Networking costs • Furniture • Copy Machines

30. CAS 502 - Consistent Treatment OMB Circular A-21, Appendix A CAS 502 – Consistency in allocating costs incurred for the same purpose • Postage (Including the cost of using FedEx to send the proposal to the Agency) • Dues and Memberships • Subscriptions/Books/Periodicals

31. Refer to Handout #2

32. Rules & Regulations

33. Rules & Regulations Pyramid Which rules and regulations apply to your project? Let's discuss. Agency Award Policies

34. Agency Policies • Beyond the Circulars, what other rules might apply? • Must review each Agency’s Policies • Specific conditions of the award document • Three major agencies for UF (FY 12/13) • National Institutes of Health (NIH) = $148M • National Science Foundation (NSF) = $43M • US Dept. of Agriculture (USDA) = $31M

35. Refer to Handout #3

36. Refer to Handout #3

37. Rules & Regulations Pyramid Which rules and regulations apply to your project? Now, let's examine this. FDP http://www.thefdp.org/

38. FDP - Federal Demonstration Partnership • A formal collaboration between federal agencies and research institutions • Its goal is to increase productivity • By streamlining the administrative process • While maintaining effective stewardship of federal funds • It was a test bed for demonstrations • Benefit means greater responsibility for UF • http://www.thefdp.org

39. Rules & Regulations Pyramid Which rules and regulations apply to your project? Now, let's examine this. RTC http://www.nsf.gov

40. New Award Terms and Conditions • January of 2008, federal agencies received a new set of core administrative terms and conditions on research from the National Science and Technology Council (NSTC) • Subject to OMB Circular A-110 • This is largely based on the Federal Demonstration Partnership (FDP) • Referred to as Research Terms and Conditions or RTC

41. Research Terms and Conditions (RTC) • As of July 1, 2008, agencies and awarding offices in the FDP must use this new RTC • Can supplement with agency-specific, program-specific or award-specific administrative requirements • Agencies not in the FDP are encouraged to replace administrative requirements with the new RTC • The National Science Foundation has established the RTC web page: http://www.nsf.gov/awards/managing/rtc.jsp

42. The NSF's RTC Website

43. Let's read this matrix together… Refer to Handout #4

44. THESE ARE AGENCIES PARTICIPATING IN RTC • National Science Foundation (NSF) • National Institutes of Health (NIH) • Department of Agriculture (USDA) • Office of Naval Research (ONR) • Department of Energy (DOE) • Air Force Office of Scientific Research (AFOSR) • Army Research Office (ARO) • Army Medical Research and Material Command (AMRMC) • National Aeronautics & Space Administration (NASA) • Environmental Protection Agency (EPA) • Department of Commerce (DOC)

45. LIST OF REQUIREMENTS on Page 1 • General Requirements • Cost Related Requirements

46. LEGEND on Page 1 • Numbered exceptions to requirements • R = Required Prior Approval • W = Prior Approval Requirement Waived

47. LISTS OF REQUIREMENTS on Page 2 • Cost Related Requirements, continued • Property-Related Requirements • Project Management Requirements

48. LEGEND on Page 2 • Numbered exceptions to requirements • R = Required Prior Approval • W = Prior Approval Requirement Waived

50. Number "5" refers to the exception, "Waived only for first-time requests for extensions of 12 months or less."