What Every P.I./Administrator Should Know

1. What Every P.I./AdministratorShould Know • Session will attempt to answer • What are the General Rules or Truisms? • Cut across job responsibilities • Set of principles that guide sponsored project enterprise • What is the Basic Vocabulary? • Cross cutting and shared 81

2. What Every P.I./AdministratorShould Know (Con’t) • A different way of looking at SPA • Different cut on information than Roles and Responsibilities • Different cut on information than life cycle workshops • Format • 21 topical areas 82

3. What Every P.I./AdministratorShould Know (Con’t) • General Rules • Major Federal Regulations • Cost Sharing/Matching • Salary/Effort Commitments and Reporting • Travel and Business Expenses • Equipment Purchases 83

4. What Every P.I./AdministratorShould Know (Con’t) • Indirect Costs • Consultant/Subcontract Expense • Budgeting/Rebudgeting • Performance Periods • Unallowable Costs • Cost Transfers • Program Income 84

5. What Every P.I./AdministratorShould Know (Con’t) • Monthly Financial Reviews • Agency Reporting • Invoicing • Recharge(Service) Centers • Regulatory Compliance • Other Research Related Policies • Problem Indicators • Know Your Resources 85

6. What Every P.I./Administrator Should KnowGeneral Rules • Read the Guidelines • Talk to a program officer • Follow all instructions • Share proposal drafts with colleagues • Get to know institutional rules • Get to know institutional processes 86

7. What Every P.I./Administrator Should KnowGeneral Rules (Con’t) • Understand who the key players are and their roles • Ensure PI status and obtain institutional approval, if necessary • Cost must be related to the project charge • Cost must be reasonable – prudent person test 87

8. What Every P.I./Administrator Should KnowGeneral Rules (Con’t) • Allocate cost benefiting multiple projects: • Based on proportionate benefit received, where possible • Based on any reasonable basis, where necessary • Cost may not be assigned base on fund availability, award expiration date or other inappropriate criteria • Charges may not exceed project award 88

9. What Every P.I./Administrator Should KnowGeneral Rules (Con’t) • Pre-award costs, where permitted, limited to 90 days • Unexpended funds may often, but not always, be carried forward • Read and follow terms and conditions 89

10. What Every P.I./Administrator Should KnowMajor Federal Regulations • Office of Management and Budget Circulars http://www.whitehouse.gov/omb/ • A 21 Cost Principles for Educational Institutionshttp://www.whitehouse.gov/omb/circulars/a021/print/a21_2004.html • A 110 Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Nonprofit Organizationshttp://www.whitehouse.gov/omb/circulars/a110/a110.html 90

11. What Every P.I./Administrator Should KnowMajor Federal Regulations (Con’t) • Office of Management and Budget Circulars (Con’t) • A 133 Audits of Institutions of Higher Education and Other Nonprofit Institutions http://www.whitehouse.gov/omb/circulars/a133/a133.html • Federal Acquisition Regulations (FAR) http://farsite.hill.af.mil/ • Code of Federal Regulations (CFR) http://www.access.gpo.gov/nara/cfr/cfr-table-search.html 91

12. What Every P.I./Administrator Should KnowMajor Federal Regulations (Con’t) • Federal Demonstration Partnership (FDP) Terms and Conditions http://thefdp.org/ • Agency Specific FDP Terms and Conditions • Agency Specific Regulations: • NIH (PHS) Grants Policy Statement http://grants1.nih.gov/grants/policy/policy.htm • NSF Grant Policy Manual http://www.nsf.gov/publications/pub_summ.jsp?ods_key=gpm 92

13. What Every P.I./Administrator Should KnowMajor Federal Regulations (Con’t) • Agency Specific Regulations (Con’t): • NASA Grant and Cooperative Agreement Handbook http://ec.msfc.nasa.gov/hq/grcover.htm • Department of Defense Grant and Agreement Regulations http://www.dtic.mil/whs/directives/corres/html/32106r.htm • Education Department Grants Administrative Regulations (EDGAR) http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html 93

14. What Every P.I./Administrator Should KnowMajor Federal Regulations (Con’t) • Other Federal and Non-Federal Regulations http://researchadmin.uchicago.edu/regulations/ 94

15. What Every P.I./Administrator Should KnowCost Sharing/Matching • Cost sharing/matching represents costs of carrying out a project not charged to the project/award. • Types of cost sharing: • Required cost sharing or matching is a programmatic requirement – often expressed as a percent of budget request or by requirement of faculty effort without compensation 95

16. What Every P.I./Administrator Should KnowCost Sharing/Matching (Con’t) • Types of cost sharing (Con’t) • Voluntary committed cost sharing is not required, but is offered to enhance a proposal’s competitiveness • Voluntary uncommitted cost sharing occurs when investigator chooses to devote additional time (not promised/not accounted for) • Voluntary cost sharing, including effort without salary, must be prudently allocated 96

17. What Every P.I./Administrator Should KnowCost Sharing/Matching (Con’t) • Required cost sharing should not generally exceed amount required • Commitments to cost share must be approved by the institution • Source of cost sharing must be secured prior to submission of proposal • Cost sharing commitments on Federal projects cannot be satisfied from other Federal projects 97

18. What Every P.I./Administrator Should KnowCost Sharing/Matching (Con’t) • Salary requests (BSD and off-quarter) and charges to projects should reflect effort committed • Cost sharing must be readily verifiable from University records • Cost sharing commitments over $100,000 require approval of University Budget Office and Provost (all units but BSD) 98

19. What Every P.I./Administrator Should KnowSalary/Effort Commitments and Reporting • P.I. determines level of effort to be committed by personnel • Personnel effort shown on budgets should be in accordance with agency guidelines • Salary caps apply only to relevant agency • Salaries charged should be consistent with effort • Significant variances in effort require redistribution 99

20. What Every P.I./Administrator Should KnowSalary/Effort Commitments and Reporting (Con’t) • No redistribution required for short-term fluctuations • Monthly effort monitoring reports provide guidance to departments • Annual October effort certification by exempt employees and academic staff confirms effort • Time card system constitutes effort certification for non-exempt employees 100

21. What Every P.I./Administrator Should KnowTravel and Business Expenses • Generally limited to commercial coach fare and U.S. carriers • Meals other than the traveler's are unallowable “Business” meals • Entertainment expenses are unallowable 101

22. What Every P.I./Administrator Should KnowTravel and Business Expenses (Con’t) • Expenses must conform with University Financial Policy No. 1202 http://adminet.uchicago.edu/admincompt/finpolic/1202.shtml • Must conform with University guidelines for “Buying and Paying for Goods and Services” http://cps.uchicago.edu/uchicago/ 102

23. What Every P.I./Administrator Should KnowEquipment Purchases • Definition of equipment has changed to $5,000 • Justify equipment needs at budget stage, include make and model • General purpose, as opposed to specialized scientific, equipment requires special justification 103

24. What Every P.I./Administrator Should KnowEquipment Purchases (Con’t) • If equipment cost allocated to sponsored award, principal purpose must be project-related • Equipment purchases during the last 60 days of terminal year may be problematic • Rebudgeting into or out of equipment impacts indirect cost recovery 104

25. What Every P.I./Administrator Should KnowEquipment Purchases (Con’t) • Equipment items are added to University’s inventory • University has title to most equipment, but Sponsor may choose to retain title • Sponsors require reporting of equipment they retain title to and may require reporting of other equipment 105

26. What Every P.I./Administrator Should KnowIndirect Costs • Also known as: overhead, facilities and administrative (F & A), indirect cost allowance (ICA) • Includes costs which are necessary to support projects, but which cannot be precisely allocated to individual projects 106

27. What Every P.I./Administrator Should KnowIndirect Costs (Con’t) • Includes costs such as: • Facilities (utilities, maintenance, security, etc.) • Libraries • Departmental administration (school/division/department) • General administration (President, Provost, Legal, URA, Comptroller, Purchasing, etc) 107

28. What Every P.I./Administrator Should KnowIndirect Costs (Con’t) • Indirect costs are charged by multiplying a defined based of expenditures by a rate • Most federal awards have rates applied to MTDC – modified total direct costs • Most non-federal awards (industry, non-profit and clinical trials) have rates applied to TDC – total direct costs 108

29. What Every P.I./Administrator Should KnowIndirect Costs (Con’t) • Federal rates are fixed by a negotiated agreement between the University and its cognizant agency • Separate federal rates for on-campus and off-campus activities • University policy provides for full indirect costs unless funding agency policy requires a lower rate 109

30. What Every P.I./Administrator Should KnowIndirect Costs (Con’t) • Waiver of indirect costs requires institutional approval and is discouraged • When lower rate is applied, the institution loses real dollars • Only URA (or in BSD, ORS) should contact sponsor to verify policy and rates 110

31. What Every P.I./Administrator Should KnowConsultants/Subawards • University personnel cannot be compensated as consultants on University administered projects • Some agencies have limits to what a consultant may charge per day 111

32. What Every P.I./Administrator Should KnowConsultants/Subawards (Con’t) • To hire a consultant on a sponsored project requires completion of Sponsored Consultant Agreement • The Sponsored Consultant Invoice should be used to request payment • Consultants must be independent contractors in keeping with IRS requirements 112

33. What Every P.I./Administrator Should KnowConsultants/Subawards (Con’t) • Agency approval is required to issue a subaward • Subrecipients included in a proposal must submit a budget, statement of work, copy of indirect cost agreement, letter/cover sheet indicating institutional approval • Subaward agreements are negotiated by URA 113

34. What Every P.I./Administrator Should KnowBudgeting/Rebudgeting • Budgeting should reflect program needs within confines of agency policy • Budget should meet test for allowability and reasonableness 114

35. What Every P.I./Administrator Should KnowBudgeting/Rebudgeting (Con’t) • Justification of all costs required, but certain categories are especially sensitive: • Non-project specific general office supplies • Clerical and administrative salaries • Rebudgeting occurs when spending differs from budget 115

36. What Every P.I./Administrator Should KnowBudgeting/Rebudgeting (Con’t) • Modest rebudgeting generally allowed without agency approval • Rebudgeting of 25% or more may be problematic (e.g. signal change in scope) • Significant rebudgeting of key personnel time indicates a scope change 116

37. What Every P.I./Administrator Should KnowBudgeting/Rebudgeting (Con’t) • Rebudgeting may affect indirect cost recovery and amount of funds available for direct costs • Obtain agency approval where required 117

38. What Every P.I./Administrator Should KnowPerformance Periods • Necessary to incur cost within performance and pre-award period • May generally extend performance period through no-cost extension • Unused funds not sufficient reason for no-cost extension 118

39. What Every P.I./Administrator Should KnowUnallowable Costs (Con’t) • “Unallowable cost” is a federal term denoting a cost not reimbursable under federal grants and contracts. • Federal regulations prohibit certain costs, most common: • Alcoholic beverages • Entertainment • Fines and penalties 119

40. What Every P.I./Administrator Should KnowUnallowable Costs (Con’t) • Federal regulations prohibit certain costs, most common (con’t): • Fundraising/alumni activities • Internal interest charges • Meals • Student aid, except in the case of training awards • Travel tickets in excess of coach 120

41. What Every P.I./Administrator Should KnowUnallowable Costs (Con’t) • Individual awards may designate additional costs as “unallowable” • University Financial Policy No. 1013 addresses unallowable costs • Unallowable costs may be charged to other sources when appropriate 121

42. What Every P.I./Administrator Should KnowUnallowable Costs (Con’t) • Unallowable costs are charged to unique subaccounts or 6-digit accounts • Any costs not reimbursable by the sponsoring agency will become the responsibility of the PI/department 122

43. What Every P.I./Administrator Should KnowCost Transfers • A cost transfer moves expenses from one 10-digit account to another. • Cost transfers are needed to distribute clearing account expenses, correct salary distribution estimates, correct clerical and bookkeeping errors, transfer pre-award costs, etc. • Federal regulations address cost transfers 123

44. What Every P.I./Administrator Should KnowCost Transfers (Con’t) • University Financial Policy No. 2111 addresses cost transfers • Guidelines for processing cost transfers are on the Web http://adminet.uchicago.edu/admincompt/costtran/intro_policy.html • Transfers should be the exception, not the routine • Transfers should be done on a timely basis 124

45. What Every P.I./Administrator Should KnowCost Transfers (Con’t) • Transfers must explain why the transfer is necessary • Explanation that simply states “to correct error” is not sufficient; how error occurred must be explained 125

46. What Every P.I./Administrator Should KnowProgram Income (Con’t) • Program income is income directly generated from a sponsored project award • Federal regulations address how income may be used to: • increase award funds • fund required cost sharing/matching • decrease award funds 126

47. What Every P.I./Administrator Should KnowProgram Income (Con’t) Program Income (Con’t) • University Financial Policy No. 2107 addresses program income 127

48. What Every P.I./Administrator Should KnowMonthly Acct./Financial Reviews • P.I.s and their administrators should review accounts monthly • Use of administrative staff encouraged but P.I. must be active in monthly review 128

49. What Every P.I./Administrator Should KnowMonthly Acct./Financial Reviews (Con’t) • University provides standard accounting reports • Monthly AMO 90, Account Statement in Whole Dollars • Monthly AMO 91, Report of Transactions • Monthly and Biweekly Payroll Registers • Business Objects reporting 129

50. What Every P.I./Administrator Should KnowMonthly Acct./Financial Reviews (Con’t) • Review reports to ensure that: • Costs are allowable • Cost allocations comply with University Financial Policy No. 2109 • Costs, which should have been charged, are reflected • Charges are consistent with P.I.’s expectations 130