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Roles and Responsibilities

Principal Investigators

University of Missouri – St. Louis

College of Education

February 11, 2009

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Learning Objectives

• To understand:– Principal Investigator (PI) responsibility for

sponsored programs– Key fiscal compliance requirements – Common issues and impact of non-

compliance

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Overview

I. Definitions

II. Compliance Requirements

III. Responsibility

IV. Common Issues

V. Concluding Points

Definitions

• Sponsored Award – Activities related to a proposal funded by an external entity for a specific purpose.

• PI/Co-PI – Principal Investigator. Named by sponsor on award document with ultimate responsibility for ensuring compliance.

• Fiscal Officers – the individual assisting the PI with the administrative management of an award.

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Definitions

• Unallowable costs – Costs charged to an award not meeting the requirements.

• APM – Accounting Policy and Procedures Manual. Codification of accounting policies.

• BPM – Business Policy Manual. Codification of business and administrative policies.

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Compliance Requirements

Who sets the requirements? • Office of Management and Budget (OMB) –

Oversight agency for the federal government– OMB Circulars – The federal rules for how awards are

to be administered.

• Sponsors – Individual sponsors may have additional requirements

• APM and BPM – policies established jointly by Campuses and UM System

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Compliance Requirements

Who enforces the requirements?• External Auditors – Identify questionable costs

and internal control issues. • Office of Inspector General (OIG) – Final

enforcer of requirements. May require funds be returned to sponsor, impose fines, and/or sanctions.

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Compliance Requirements

What compliance requirements apply to sponsored programs? – OMB Circular A-21 - Cost Principles for

Educational Institutions– OMB Circular A-110 - Administrative

Requirements for Grants and Agreements– OMB Circular A-133 - Single Audit

Requirements– Specific Sponsor Administrative Guides

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Compliance Requirements

When do these requirements apply?– Receipt of direct federal awards– Awards containing federal flow-through dollars– Awards where terms and conditions reference

OMB Circulars

However, the University requires all awards to follow the requirements for federal awards.

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PI Responsibility

1. General Compliance and Oversight

2. Project Planning and Proposal Submission

3. Award Set-up

4. Management During the Award

5. Award Closeout and Reporting

6. Effort Verification Reports

7. Cost Transfers

8. Cost Sharing

9. Subawards

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1. General Compliance, Oversight

• Aware of applicable requirements–OMB Circulars, University policies–Sponsor restrictions

• Ensure compliance• Attend training• Work with Fiscal Officer• The PI has the ultimate responsibility

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2. Planning/Proposal Submission

• Complete proposal timely• Obtain all approvals (PSRS) • Manage technical/programmatic

negotiations with sponsor• Establish pre-award accounts• Ensure all costs are allowable and unlike

circumstances are justified

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3. Award Set-up

• Notify ORA upon receipt• Delegate authorization• Ensure accuracy of budget in PeopleSoft• Identify federally funded equipment• Establish payroll distribution of effort - PAF

See APM 60.35 – Establishing an Award

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4. Management of Award

A. Monitor project timely

B. Ensure all expenses are authorized

C. All charges are allowable

D. Notify sponsor for significant changes

E. Supporting documentation exists

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4A. Monitor Project Timely

• Managerial review monthly:– All costs are posted and allowable– Within the period of availability– Unreasonable or unusual activity– Address budget deficits or excess costs

• Notify sponsor if significant changes

– Sign/date documentation evidencing review

See Segregation of Duties – APM’s 2.25.55 and 2.25.55.01

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4B. Proper Authorization

• Ensure all expenses are authorized• PI may delegate authorization:

– Direct knowledge of the sponsored award– Aware of terms and conditions– Aware of compliance requirements– University employee

See APM 2.25.55.01 – Segregation of Duties – Sponsored Programs and 2.25.55.02 – Delegation Form

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4C. Allowable Charges

• Ensure all costs are allowable – Per OMB (A-21) and sponsor requirements

• Allowability requirements: • Reasonable• Allocable• Consistent Treatment• Conform to limitations or exclusions

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4C. Allowable Costs

• Direct costs must be: – Identified specifically for a particular

sponsored award– Directly assigned with relative ease and a

high degree of accuracy– Consistently treated in like circumstances– Supported by documentation

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4C. Allowable Costs

• F&A is: – Incurred for a common or joint objective (e.g. utilities)– Cannot be easily identified with a particular award

• Facilities: depreciation, interest on related debt, operational, maintenance, and library costs.

• Administration: departmental, sponsored projects, student services, and other general administrative costs.

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4C. Allowable Costs

• Certain costs are expressly unallowable: – Alcoholic beverages– Alumni activities– Bad debts– Donations and Contributions rendered– Entertainment– Furnished automobile – personal use – Goods or services for personal use– Housing and personal living– Losses on other sponsored agreements

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4C. Allowable Costs

• Certain costs are unallowable with exceptions:– Contingency provisions– Fines and penalties– Fundraising and investment costs– Lobbying– Pre-agreement costs– Selling and marketing costs– Student activity costs

• Must be specified in the agreement to be allowable!

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4D. Notify Sponsor

• Notify sponsor when there is a: • Change in scope or objective• Significant change in budget• Change in key person specified in award• Absence of the PI for more than 3 months,

or a 25% reduction in time devoted • No-cost time extension

• Work with ORA to notify sponsor

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4E. Supporting Documentation

• What is considered adequate documentation?– Sufficient Documentation should state:

• the charge is allowable, and• the charge directly benefits the related award.

– Substantial Documentation (for cost transfers > 60 days old) should address:• Who, What, When, Where, and Why?• How will error be prevented in future?

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5. Award Closeout & Reporting

• Ensure awards are closed timely– Review notice of award closings– Closeout deficits

• Provide final technical reports• Certify allowability of costs• Documentation exists for all costs

See APM 60.20 – Closing Sponsored Awards and APM 60.07.01 - Certification

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6. Effort Verification Reports

• Ensure all payroll costs directly charged reflect actual efforts

• All EVRs are reviewed, signed, and completed by due date

• Signed by person with suitable means• Update payroll records for differences > 5%.• Note: 100% funding of PI is red flag

See APM 60.32 – Effort Verification Reports

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7. Cost Transfers

• A reallocation of costs to an award after the transaction has occurred

• To correct an error• All cost transfers should be:

– an allowable and allocable charge,– properly documented, and– made in a timely manner.

See BPM 213 – Adjustment of Income and Expense Items

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7. Cost Transfers

• Cost transfers should not be done to:– Meet budget deficits– Avoid restrictions– Shift unrestricted budget– Spend out unused award budget– For other conveniences

• Red flag if excessive transfers at end

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8. Cost Sharing

• At proposal: – Identify funding source– Obtain appropriate approvals– Document exceptions in agreement

• During the award: – Ensure cost sharing requirements are met– All cost sharing is allowable– Documentation exists to support

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9. Subawards

• Determine the need, scope, and budget for subaward

• Ensure proper classification• Monitor progress and deliverables• Review and approve payments• Subject to same compliance requirements

See APM 60.85 – Subrecipient Monitoring Procedures

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Common Issues

• Unallowable costs on projects• Lack of documentation:

– Cost Transfers – Cost Sharing – supporting requirements

• Incomplete and/or late EVRs• Late cost transfers • Purchases in last 3 months of award• Delay in filing final reports

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Impact of Non-Compliance

• Questioned or unallowable costs• Repayments to the sponsor• Fines and/or sanctions• Subject to additional external audits• Jeopardize future funding opportunities• Damage to reputation

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Checklist for Success

Ensure costs are: Authorized in the budget & agreement Charged timely to the project Meet the requirements of allowability

Timely review budget and costs Make timely and allowable cost transfers Appropriately document all costs

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References

Where can I get more information?– OMB Circular A-21 – University Controller’s Office Policies –

APM – Section 60 – Reference Guide for Sponsored Programs – PI Roles and Responsibilities – Facilities & Administration

Fiscal Misconduct Hotline

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Contact Information

• Tina Hyken• Business and Fiscal Operations Specialist• 314.516.5127• Hykent@umsl.edu

• Karen Boyd• Manager, Business/Fiscal Operations• 314.516.5923• boyd@umsl.edu