Post on 15-Aug-2015
Overview of Accounting for Sponsored Projects
Designed to empower business managers and accounting staff!
What are sponsored projects?
Funds awarded by Governmental agencies & private companies to UT to perform research, instruction, public service and produce a deliverable.
Our professors are in demand due to their expertise in their field
Some have international reputations
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Importance ofsponsored projects
UT’s mission is instruction, research, and public service
External funding pays for research, instruction and public service work that our faculty members are interested in pursuing
Active researchers make better teachersPays for high-tech equipment & buildingsAttracts quality graduate students who want to work
with highly-regarded facultySpin-off companies improve state & local economy
Increasing our research initiatives will help the University move towards our goal of being a Top 25 Public Research University!
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How much $ is involved?
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FY 2010 $213,460,891
FY 2011 $239,966,194
FY 2012 $236,531,760
FY 2013 $241,437,691
FY 2014 $231,477,817
Who is involved?
Principal Investigator
Co-PI’s & research staff
Graduate students
Subcontractors
Dept Head Department accounting & clerical staff
College admin Research office
Campus / SPA
Controller’s Office
Treasurer’s Office
(A/P dept)
Payroll
Sponsor contracting
officer
Sponsor fiscal rep or A/P dept
Vendors
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Technical work
Administrative & support
staff
External to UT
Support staff goal
Provide superior service to the PI so that he / she can devote maximum time to technical aspects of the project & teaching students
Exceed sponsors’ expectations for fiscal responsibility & administrative performance
Promotes reputation of PI and UT
Sponsors will want to give us more money
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PI responsibilities
The PI is responsible for all aspects of the sponsored project – his/her reputation is on the line Technical
Financial
Administrative
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PI technical responsibilities
Ensure that all technical reports / deliverables are of high quality and are submitted by sponsor deadlines
Ensure that subcontractors are performing technical tasks adequately
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PI Financial responsibilities Ensure that all charges are reasonable, allowable,
allocable, and correctly classified as direct versus F&A
Ensure that all charges post to the correct sponsored project in a timely manner – initiate Advance WBS Element, if necessary
Ensure that the budget is followed
Ensure that any sponsor-required prior approvals are obtained
Budget changes, equipment purchases, travel
Ensure that subcontractor invoices are reasonable based upon the technical work performed and are allocable, allowable and correctly classified as direct versus F&A
Don’t approve payment of invoices until satisfied with technical performance.
Ensure subcontractor invoices include a signed certification statement.9
PI Financial responsibilities, cont.. The PI is responsible for certifying the Schedule of Final
Charges Form.
Ensure all expenditures posted to the project are allowable, allocable, reasonable and necessary to the scope of work by reviewing, verifying and signing departmental sponsored project ledgers.
The PI is also required to ensure all expenditures are incurred prior to the end of the project and posted no later than 60 days after it ends.
The PI is responsible for ensuring the project WBS Element reflects all actual allowable costs that have been incurred on the project, whether under or overspent.
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Administrative responsibilities Ensure that support staff are performing tasks
adequately
Ensure that support staff are given required information in a timely manner
Ensure that all applicable Federal, sponsor and UT rules & regulations are followed
Ensure that award amendments are requested in a timely manner
Business managers/Budget Directors can not certify the Schedule of Final Charges Form. The form can only be certified by the PI, or the Department Head in the PI’s absence!
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Department Head responsibilities
The Department Head is responsible for ensuring that the PI and support staff perform their jobs in an adequate, timely, and compliant manner. Technical
Financial
Administrative
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Department Headtechnical responsibilities
Ensure that scope of work advances UT’s mission and the goals of the academic unit
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Department Headfinancial responsibilities Ensure that all charges are reasonable,
allowable, allocable, and correctly classified as direct versus F&A
Ensure that all charges post to the correct sponsored project in a timely manner Approve PI starting work before signed award
document is received Approve Advance WBS Element, if necessary
Pay for any charges not collected from sponsors Including overruns, disallowances, cost sharing,
uncollected or disputed sponsor invoices
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Department Head administrative responsibilities
Ensure space exists to perform project work Ensure that support staff are performing tasks
adequately and are adequately trained Ensure that processes and culture are present
that promote financial compliance Ensure that all applicable Federal, sponsor,
and UT rules & regulations are followed
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Departmental Accounting Staff financial responsibilitiesSame as for the PI, plus:
Process accounting transactions
Monthly account reconciliation
Provide PI and Department Head with adequate financial information to manage project
Solve problems
Liaison between PI and everyone else
Assist PI in compliance with regulations
Closeout in a timely manner
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Sponsored Projects Accounting responsibilities Set up project in IRIS
Work with PI, department accounting staff & research office to get WBS Element opened as quickly as possible
Periodic financial reporting
Periodic invoicing / cash receipts performed to maximize UT’s cash flow
Assist department accounting staff & PI with regulation compliance
Closeout in a timely manner17
Office of Sponsored Programs administrative responsibilities
Review proposals and budgets for accuracy and financial compliance
Flow through financial rules to subcontractors Help the PI, department accounting staff & business office get
WBS Element opened as quickly as possible Get fully executed award documents from sponsor ASAP so that
invoicing can begin which maximizes UT’s cash flow Maximize F&A recovery Negotiate / disallow detrimental financial terms & conditions
Inconsistent costing, such as hourly rates versus % of effort
Unreasonable reporting deadlines
Non-standard invoicing and reporting forms
Backup documentation for expenditures
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Sponsored project life cycle
PI has great idea=>
PI prepares proposal
document
Proposal approved by
UT
Proposal submitted to
potential sponsor
Sponsor accepts proposal
=>
Sponsor & UT negotiate
award & UT may award
subcontracts
UT creates R account in
IRIS
PI starts technical
work & incurs charges
Periodic invoicing /
cash receipts=>
Interim technical &
financial reporting
Project ends and all
project costs are on R within 60
days
Final technical &
financial reports due within the contracted
date
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Proposals
Proposal document prepared by PI Includes statement of work Includes budget & budget justification
narrative Includes known subcontractors Includes all supplemental documentsSubmitted to Office of Sponsored Programs
Including cost sharing and space
Research office reviews total document
Proposal submitted on behalf of the University
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Awards
A successful proposal results in an award document between the sponsor and UT Grant
Cooperative agreement
Contract, purchase order
Standard information included in an award document
Start & end dates, award amount, budget, statement of work
Different award types have progressive levels of Sponsor control & restrictions
Reporting requirements21
Federal grants
“For the public good”
One or two page grant document
May not require UT to sign
Usually incorporates agency grant policies Guide usually located on their web site
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Flow-through awards
An award where the prime funding sponsor awards money to an awardee and the awardee awards part of the money to a sub-awardee Example: NASA gives Vanderbilt a grant for $1
million & Vanderbilt sub-grants $100,000 to UT UT’s sponsor is Vanderbilt, a private entity, because
that is who our award agreement is with; however, it is Federal flow-through funding because we know that the prime sponsor is NASA
Same compliance requirements as direct Federal award23
Restricted WBS Element
Restricted WBS Elements are cost collectors in IRIS
UT must spend the $ in accordance with the sponsor’s specifications
UT must maintain separate accounting of each project’s financial activity
Established by SPA at the request of the department or upon receipt of an award document from the OSP office
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Advance WBS Element
A restricted WBS Element can be established before the executed award document is received PI wants to start working on the project
If costs will be incurred, then where will they post?
Never to another sponsored project WBS Element!!!
Department evaluates likelihood of award and authorized PI to start work without an executed award agreement
Submits signed form to SPA along with the “Research and Laboratory Compliance” form completed by the PI.
Note: They may also need to meet a Financial Conflicts of Interest, if applicable. (This may hold up the account creation a bit!)
http://13134m1l2szd36ie6w8tg1djw2.wpengine.netdna-cdn.com/wp-content/uploads/2013/06/WBS.pdf
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Risks related to an Advance WBSE?
Factors affecting risk of setting up an advanced WBS Element Is the award coming from a Government or private sponsor?
Do we have a good and reliable past relationship with sponsor?
Is it a Competitive or non-competitive proposal?
Do we have an intent to award provided verbally or in writing by the sponsor?
Have we already started working?
If you don’t feel comfortable with the answers to these questions, an Advance WBSE probably isn’t the way to go!
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Restricted WBS Element creation
Required information Signed Advance WBS Element request form or
fully-executed award document TERA PAMS proposal Budget in IRIS Financial Conflict of Interest Form Research & Laboratory Compliance Form
submitted Delays can occur
Department must monitor new account creation progress
If award amount differs from proposed amount, then department must submit revised budget to OSP
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Timeline for creation
Restricted WBS Elements need to be established in a timely manner
Ideally, before the project start date
Provide adequate time for department to assign recurring costs
Payroll PIF’s, service centers, etc.
In reality, we are not always timely
Causes more work for everyone
Sponsors & auditors not happy
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Sponsored projects in IRIS
Master data in various IRIS modules
Project Systems module has most master data
Funds Mgmt module has some master data & budget
Sales & Distribution module has invoicing master data
Accounts Receivable module has invoicing & collection activity
You should review this information and make sure that it agrees with your award document
If not, call SPA
Errors can radically affect your project!
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IRIS transactions
CJ20N contains many attributes
Dates, obligated and award amount, F&A, cost sharing information, PI, invoicing, function, sponsor, project profile, project type, etc.
Learn what all of these represent
Field names aren’t always descriptive
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Accounting structure
CJ20N work breakdown structure
Project definition
Header only, not a chargeable object
WBS elements
Chargeable objects with many attributes
Different levels & flexibility
Link to funds centers
Can cross organizational lines
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Required structure
Award document requirements
New award document number from sponsor always requires a new Project Definition & WBS Element
Different F&A rates within one award
This always requires separate WBS Element for those charges that are treated differently for F&A computation
Example – NSF - participant support costs.
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Optional structure
Divide project for mgmt purposesBy technical phases of workFor different sub- or co-PI’s within UT
WBS Element linked to their funds centerThey have spending control
They have accounting ledger access
You can see other IRIS accounting reports, not ledger
They get F&A recovery and research “credit”
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Complex structure
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Project DefinitionR011024009
WBS ElementR011024009
(lead PI)
WBS ElementR074215115
(co-PI)
Funds CenterU013410024
Funds CenterU073415055
Charges to projects
Charges must be in compliance with the rules & regulations applicable to UTUniform Guidance
UT Fiscal Policy
Sponsor policy manuals
Award document clauses
Responsibility of PI and departmentConsequences of incorrect charges
Know your proposal and budget agreement specifics. 35
Types of charges
Direct costs
Salaries, staff benefits, supplies, long-distance phone calls, travel, equipment, subcontracts
Exception to “basic support” costs
Due to nature of project technical work
F&A costs
Facilities costs
Bldgs., equip, electricity, library
Admin costs
“Basic support” costs
Clerical & admin salaries, phone line charges, office supplies
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What are F&A costs?
Facilities & Administrative costs
Federally-approved rate applied to a specified cost base
Modified Total Direct Costs (MTDC) base
Salaries & Wages (S&W) base
Matrix of rates in effect
Campus, function, location, award year
Same rate for life of project
Reimbursement for expenses already paid by UT to support research
These are real costs!
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Expenses included in F&A
Facilities Buildings
Sidewalks
Electricity / fuel
Equipment
Library
Security
Custodial
Administrative Department clerical
& admin staff salaries
Research & business offices
Basic office supplies & expenses
Portion of other admin costs – Dept Head, Dean, system charge, etc.
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F&A cost sharing
Must be negotiated & approved in advance by OSP
A portion of collected F&A is returned to college / unit that generated it
Financial activity F&A is charged to WBS Element at full, audited rate
during month-end closing using cost element 501000
F&A cost sharing is credited during month-end closing using cost element 501990 in an amount sufficient so that the net F&A charge is equal to the amount or % allowed by the sponsor
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Transfers of costs
Cost transfers should only be to correct errors
To correct an error is not sufficient justification for documentation.
Subject to sponsor, Federal, State and internal audit disapproval
Excessive or late transfers
Cost transfers that do not document how target project benefited from the charge
Fiscal policy includes time limits and documentation requirements – similar to other universities
All cost transfers over 90 days require a “Cost Transfer Explanation” form.
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Sponsored Projects Accounting “Certification”
The Modules listed as Training Classes related to Sponsored Projects can also be taken as a Certification.
In order to gain a Certification in Sponsored Projects Accounting, you must take the training class and pass a quiz associated with the training module.
Trainings toward the Certification can be obtained through HR training courses, Blackboard, or In-House training (upon departmental request)
If taking the training through HR for the Certification you will need to take the quiz. Quiz’s are located in the Sponsored Projects Accounting project section in Blackboard.
You must be registered as a participant within this project in Blackboard to gain access.
To be setup in Blackboard contact Jay Taylor, Financial Compliance Officer, SPA @vtaylor@utk.edu or 974-0952.
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RAOR Meetings
ROAR meetings are held on the 3rd Wed. of each month between 10-11am.
Please consider attending these meetings. Each meeting has a specific topic and the meetings are open forum discussion. That means you should bring all your questions based on the topic being presented or just come to provide feedback about your experiences with others based on their questions.
Also, the topics are chosen by topics/concerns supplied by attendees. The ROAR Committee would love to hear your topic requests.
These meetings will give valuable information for you to take back to your department!
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Any Questions?
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