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Recharge Centers vs. Program Income: How to Comply with A-21 and A-110

Recharge Centers vs. Program Income: How to Comply with A-21 and A-110. Concurrent Session March 12, 2013. Agenda. Introductions Definitions and Applicable Regulations and Guidance Service Centers Program Income Service Center or Program Income, or Both? Considerations Examples.

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Recharge Centers vs. Program Income: How to Comply with A-21 and A-110

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  1. Recharge Centers vs. Program Income: How to Comply with A-21 and A-110 Concurrent Session March 12, 2013

  2. Agenda • Introductions • Definitions and Applicable Regulations and Guidance • Service Centers • Program Income • Service Center or Program Income, or Both? • Considerations • Examples

  3. Definitions and Applicable Regulations and Guidance

  4. Service Centers • Described in the DS-2, Part III, item 3.2.0 as “Service Centers” • Described as “departments or functional units which perform specific technical or administrative services for the benefit of other units within a reporting unit.” • Service centers include “specialized service facilities” and “recharge centers”.

  5. Service Centers • Specialized service facilities • Animal Care Facility • University-wide recharge centers • Facilities Management • Copy/Duplicating • Departmental recharge centers • Machine Shop • Stock Room

  6. Service Centers – Regulations and Guidance • 2CFR, Part 220 (Otherwise known as A-21) • Direct Costs (C.4.a) • Consistency (C.11) • Indirect Cost (F.6.b) • Specialized Service Facilities (J.47) • HHS Review Guide for Long Form University Indirect Proposals • Disclosure Statement (DS-2) • Federal Audits of Recharge Centers (HHS OIG) • A-133 Compliance Supplement • Internal service, central service, pension, or similar activities

  7. Program Income • Program income is defined as: • Gross income received by the grantee, a consortium participant, contractor or subgrantee directly generated by a grant supported activity, or earned only as the result of the grant agreement during the grant period. • “Grant period” refers to the time between the effective date of the award and the ending date of the award reflected in the final financial report.

  8. Program Income • Program income earned during a project period shall be retained by the University and is usually treated using one of three methods, depending on policy, sponsor type, and/or terms and conditions of the award.Federal regulations define the following three methods for recording program income: • Additive • Deductive • Matching Alternative

  9. Program Income – Regulations and Guidance • OMB Circular A-110 • Program Income (C.24) http://www.whitehouse.gov/omb/circulars_a110#24 • NIH Grants Policy Statement • Program Income (Part II, Subpart A, 8.3.2) http://grants.nih.gov/grants/policy/nihgps_2012/nihgps_ch8.htm#_Toc271264957

  10. Service Center or Program Income, or Both?

  11. Considerations • Can a department have revenue and not have a service center?  What if: • it is part of a center grant? • the grant program or program officer specifically requests that services be provided? • Federally provided resources are used to provide services?

  12. Examples • Discuss seven examples and review: 1) Description of the situation 2) Allowability of cost 3) Factors in determining rates 4) Treatment of income

  13. Example 1 • Institution A receives a grant to provide patient care services. • Some of the patients pay for the services. • How are the payments to be treated?

  14. Example 2 • Institution A receives a grant that provides instrumentation and technology to perform certain tests. • This technology is used almost exclusively within the grant providing the instrumentation. • Institution B requests use of the technology on privately sponsored grants. • Can Institution B use the technology?

  15. Example 3 • You purchase equipment on a Federal grant. • After the grant has been completed and the title vests with the institution, the equipment is assigned to a service center. • Can the service center include depreciation on the equipment within the rates?

  16. Example 4 • You receive a center grant and the program officer suggests that you provide services to other institutions at a specific rate. • The lower rate is the result of the grant subsidizing the service. • Can you provide this rate to other institutions?

  17. Example 5 • A PI requests permission to perform certain tests for a private company using technology and equipment provided by a Federal grant. • The PI wants to charge a premium price, significantly above cost. • Can he do that?

  18. Example 6 • Department A receives a grant from one Federal agency and Department B receives a grant from a different agency. • Department A wants to charge Department B for using equipment provided by the grant. • Can they do that?

  19. Example 7 • Mechanical Engineering sets up a service center to provide testing for local manufacturing using a process previously used for a Federal grant. • The staff doing the testing learned the technique while working on the grant, however the equipment, supplies and staff are all paid from the center. • Is there program income?

  20. Summary • Definitions and Applicable Regulations • Considerations • Allowability of Costs • Factors in Determining Rates • Treatment of Income • Examples

  21. Questions?

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