What Does the PI Need to Know to be an Effective Project Lead?

1. What Does the PI Need to Know to be an Effective Project Lead? John Hanold, PhD, Senior Associate Director, Office of Sponsored Programs Richard Killian, MBA, Manager, Research Accounting, Office of Corporate Controller The Pennsylvania State University

2. Mystery:What did the PI know and when? What’s my balance? What can I buy? What are my reporting obligations? What if the sponsor doesn’t pay? Who accepts financial risk?

3. Dr. Hanold, PI Mr. Killian, Grant Administrator Scenario: PI not aware of budget picture PI unfamiliar with policies Sponsor is 120 days past due on $75K invoice The Case of the Ignorant PI Budget

4. Dr. Hanold noticed from the project’s financial summary an available budget of $155,849, so he requests the following: Hire a visiting scientist from ShanghaiUniversity, estimated cost $30,000 (7/1/13-6/30/14) Schedule a trip to Shanghai to coordinate research plans, estimated cost $6,500 (May 3013) Purchase a Mixed Signal Oscilloscope, estimate cost $13,500 (ASAP) Total Cost: $50,000

5. What information is the PI lacking? The PI didn’t have a true picture of the available balance: • Financial summary not complete • Salary & fringe not fully encumbered • Sub-awards not paid • Purchase requests exceed budget

6. What other mistakes is the PI making? Was the capital equipment budgeted or approved by sponsor? Does foreign travel require approval? Can we hire a Chinese national on a project of this nature?

7. Is your PI involved in monitoring income? Can your PI view the income line? Does he or she understand what that means? Does your PI have any “skin in the game”? Who covers the bad debt in the event of non-payment?

8. What tools can we use to educate the PI? • Can your PIs check their balances live? • Are all anticipated costs encumbered?

9. What controls do you impose on the budgets? Do you place controls on line items (e.g., equipment, foreign travel, admin time)? Do you require additional approvals prior to late salary transfers and/or equipment orders? Can projects be flagged for additional scrutiny (e.g., hiring a foreign national on an export controlled project)?

10. Is faculty training even possible?How? What methods do you use at your university for faculty training? How do you communicate policy changes? What consequences do faculty members face for non-compliance?

11. Do sponsors always pay their bills? When do you get the PI involved if the company isn’t paying invoices? How do you inform administrative units of serious payment problems? Do you “flag” sponsors with a history of non-payment? How is this communicated with PIs?

12. Tools for tracking accounts receivable • Monitoring Accounts Receivable: • Aging Report • Quarterly Status Report, accounts > 150 days • Collection process • Management reports: Aging trend & Dashboard • Black list, sponsors with bad payment history

18. Is your PI involved in financial risk assessment? Do you have a way of informing your PI at the proposal stage that a potential sponsor has a history of not paying invoices? How can you mitigate risk? • Modified payment schedule? • Up front payment requirements?

19. Are reporting obligations clear? How do you communicate financial (and other) reporting obligations to your PI? Is your PI ever involved in preparing special financial reports? • Task based invoicing • Cost center reconciliation

20. Does your PI understand cost share? When you have multiple sources of cost-share on a project, who ties them together for financial reporting? Does your PI have access to this information?

21. Same perceptions & expectations?

22. PI’s Priorities

23. AG’s Priorities

24. Common goals