Introduction to Post Introduction to Post Award Research Award Research AdministrationAdministration

Ted Mordhorst, CRATed Mordhorst, CRA Assistant Director for Post AwardAssistant Director for Post AwardFinancial ComplianceFinancial ComplianceUniversity of Washington University of Washington Research Accounting & AnalysisResearch Accounting & AnalysisA Division of Financial ManagementA Division of Financial Management

Lily Gebrenegus, CRALily Gebrenegus, CRA Assistant Director, Campus ServicesAssistant Director, Campus ServicesUniversity of Washington University of Washington Grant and Contract AccountingGrant and Contract AccountingA Division of Financial ManagementA Division of Financial Management

Course ObjectivesCourse Objectives

Our objective is to provide you with a Our objective is to provide you with a foundation upon which to grow as you are foundation upon which to grow as you are engaged in the daily activity of facilitating engaged in the daily activity of facilitating cutting edge research, discovery and the cutting edge research, discovery and the education of our next generation of education of our next generation of scientists.scientists.

Learning ObjectivesLearning Objectives Identify who is involved and their responsibilitiesIdentify who is involved and their responsibilities Describe the regulatory environment and how it Describe the regulatory environment and how it

is structuredis structured Identify the various types of agreements that Identify the various types of agreements that

fund projectsfund projects Distinguish the types of costs incurred and apply Distinguish the types of costs incurred and apply

the regulations to determine allowabilitythe regulations to determine allowability Recognize a few of the more complicated Recognize a few of the more complicated

concepts involved in research administration.concepts involved in research administration.

Who are Sponsors?Who are Sponsors? Federal GovernmentFederal Government

DepartmentsDepartments AgenciesAgencies

Independent AgenciesIndependent Agencies

State GovernmentState Government Foundations and Non-Profit OrganizationsFoundations and Non-Profit Organizations IndustryIndustry

Large Entities (over 500 Employees)Large Entities (over 500 Employees) Small Entities (under 500 Employees)Small Entities (under 500 Employees)

Stewards, Not OwnersStewards, Not Owners Financial resources are entrusted to the Financial resources are entrusted to the

University for use in research, instruction, and University for use in research, instruction, and public service.public service.

Management of the resources must be able to Management of the resources must be able to withstand public scrutiny.withstand public scrutiny.

Team: DepartmentalTeam: Departmental Principal Investigator (PI)Principal Investigator (PI) Department AdministrationDepartment Administration

Chief Administrative Officer/ Chief Administrative Officer/ Chief Financial Officer/ Chief Financial Officer/ Management Service OfficerManagement Service Officer

Fiscal ManagersFiscal Managers Personnel and PayrollPersonnel and Payroll PurchasingPurchasing Research AssistantsResearch Assistants Students Students

Team: Central AdministrationTeam: Central Administration

Office of ResearchOffice of Research Office of Sponsored Programs Office of Sponsored Programs

(OSP)(OSP) Human Subjects Division (HSD)Human Subjects Division (HSD)

Research Accounting and Research Accounting and AnalysisAnalysis Grant & Contract Accounting (GCA)Grant & Contract Accounting (GCA) Management Accounting & Analysis Management Accounting & Analysis

(MAA)(MAA) Equipment Inventory Office (EIO)Equipment Inventory Office (EIO)

UW Tech TransferUW Tech Transfer Institutional Animal Care & Institutional Animal Care &

Use CommitteeUse Committee Internal AuditInternal Audit

Financial AccountingFinancial Accounting PurchasingPurchasing Financial ServicesFinancial Services eCommerceeCommerce PayrollPayroll TravelTravel Student Fiscal ServicesStudent Fiscal Services Graduate SchoolGraduate School Human Resources Human Resources

Research Administration is a Research Administration is a Balancing ActBalancing Act

The research administrator seeks a balance of The research administrator seeks a balance of interests that recognizes the shared responsibilities interests that recognizes the shared responsibilities throughout the institution.throughout the institution.

Research administrators balance facilitating the Research administrators balance facilitating the research, teaching, and public service activities of research, teaching, and public service activities of faculty, students and other investigators while faculty, students and other investigators while accommodating the priorities and expectations of accommodating the priorities and expectations of the institution, governmental entities, sponsors and the institution, governmental entities, sponsors and the public all the while maintaining stewardship of the public all the while maintaining stewardship of extramural funding.extramural funding.

Roles and ResponsibilitiesRoles and Responsibilities

GIM 2GIM 2 Fiscal Responsibilities on Grant and Contract Fiscal Responsibilities on Grant and Contract

Accounts Accounts (Post Award)(Post Award) Grants and contracts are awarded to the University; Grants and contracts are awarded to the University;

not to individual investigators or departments.not to individual investigators or departments. Responsibility is shared within the institution by the Responsibility is shared within the institution by the

investigator, his chairman or director, dean, and the investigator, his chairman or director, dean, and the Grant and Contract Accounting Office.Grant and Contract Accounting Office.

Roles and ResponsibilitiesRoles and Responsibilities Principal Investigator (PI)Principal Investigator (PI)

Develops an over-all plan for the commitment of grant Develops an over-all plan for the commitment of grant and contract fundsand contract funds

Initiates expenditures Initiates expenditures Supervises expenditure Supervises expenditure Assumes accountability for deficits or disallowances Assumes accountability for deficits or disallowances

Chairman, Director, DeanChairman, Director, Dean Establishes systematic procedures in the college for Establishes systematic procedures in the college for

supervision of grant and contract accountssupervision of grant and contract accounts Provides reasonable coordinated administrative Provides reasonable coordinated administrative

support support Consults with principal investigator concerning the Consults with principal investigator concerning the

resolution of deficits or disallowances resolution of deficits or disallowances

Roles and ResponsibilitiesRoles and Responsibilities Grant and Contract AccountingGrant and Contract Accounting

Provides principal investigator/administrator with Provides principal investigator/administrator with information about any special terms, conditions, or information about any special terms, conditions, or limitations of the award.limitations of the award.

Consults on specific questions about the propriety of Consults on specific questions about the propriety of a given expenditure, on budget monitoring a given expenditure, on budget monitoring techniques, etc.techniques, etc.

Monitors certain types of grant -related transactions Monitors certain types of grant -related transactions on a sampling basis. on a sampling basis.

Provides required fiscal reports to sponsoring Provides required fiscal reports to sponsoring agencies.agencies.

Award LifecycleAward Lifecycle

Identify FundingIdentify Funding Prepare ProposalPrepare Proposal Review & Submit ProposalReview & Submit Proposal

Negotiate & Accept AwardNegotiate & Accept Award Set Up AwardSet Up Award

Perform WorkPerform Work Financial ManagementFinancial Management Technical ReportingTechnical Reporting Monitor ActivityMonitor Activity Invoice & Collect PaymentsInvoice & Collect Payments Monitor Accts ReceivableMonitor Accts Receivable Close-out AwardClose-out Award

Principal Investigator (PI)Principal Investigator (PI)

PI & Departmental StaffPI & Departmental Staff

PI & Office of Sponsored Programs PI & Office of Sponsored Programs (OSP)(OSP)

OSP & PIOSP & PI

Grant & Contract Accounting (GCA)Grant & Contract Accounting (GCA)

PIPI

PI, Departmental Staff & GCAPI, Departmental Staff & GCA

PIPI

PI & Departmental StaffPI & Departmental Staff

GCAGCA

GCA & Departmental Staff GCA & Departmental Staff

PI, Departmental Staff & GCAPI, Departmental Staff & GCA

Award Step Responsible Party

Know Your Sponsor andKnow Your Sponsor andAward DetailsAward Details

Award Terms

Departmental Policies

University Policies & Procedures

Sponsor Policies

Federal Policies and Governmental Law

Accounting & Financial Policies

NIH - GPSA-21

A-110FARs

Learn How to Apply the Rules:

Regulatory ComplianceRegulatory Compliance U.S. Department of Health and Human U.S. Department of Health and Human

Services (DHHS) Services (DHHS) Defense Contract Audit Agency (DCAA)Defense Contract Audit Agency (DCAA) Office of Naval ResearchOffice of Naval Research

System ReviewsSystem Reviews Other Agencies Other Agencies

Federal Federal StateState County County PrivatePrivate

Grant & Contract Accounting (GCA)Grant & Contract Accounting (GCA) Internal AuditInternal Audit

Federal Regulatory Compliance: Federal Regulatory Compliance: OMB Circular A-110OMB Circular A-110

Uniform Administrative Requirements for Grants Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher and Agreements with Institutions of Higher

Education and Other Non-profit OrganizationsEducation and Other Non-profit Organizations

I.I.Financial and programmatic managementFinancial and programmatic managementII.II.Cost sharingCost sharingIII.III.Program incomeProgram incomeIV.IV.Property standardsProperty standardsV.V.Procurement standardsProcurement standardsVI.VI.Reporting and Records RetentionReporting and Records Retention

Sets forth standards for obtaining consistency and Sets forth standards for obtaining consistency and uniformity among Federal agencies. uniformity among Federal agencies.

OMB Circular A-21, OMB Circular A-21, “Cost Principles for Educational Institutions”“Cost Principles for Educational Institutions”

Establishes principles for determining costs Establishes principles for determining costs applicable to grants, contracts, and other agreements applicable to grants, contracts, and other agreements with educational institutions (Direct and F&A)with educational institutions (Direct and F&A)

Prescribes methods for the determination and Prescribes methods for the determination and application of Facilities & Administrative (F&A) ratesapplication of Facilities & Administrative (F&A) rates

Contains general provisions for selected items of cost Contains general provisions for selected items of cost

OMB Circular A-133, OMB Circular A-133, “Audits of States, Local Governments, “Audits of States, Local Governments,

and Non-Profit Organizations”and Non-Profit Organizations”

Sets forth standards for obtaining consistency Sets forth standards for obtaining consistency and uniformity among Federal agencies for the and uniformity among Federal agencies for the audit of States, local governments, and non-audit of States, local governments, and non-profit organizations expending Federal awards. profit organizations expending Federal awards.

Requires an annual audit of the non-federal Requires an annual audit of the non-federal entity as a recipient of federal funding.entity as a recipient of federal funding.

Federal Acquisition Regulations Federal Acquisition Regulations (FAR)(FAR)

Is the procurement manual for federal purchases. Is the procurement manual for federal purchases. Provides administrative requirements for Federal Provides administrative requirements for Federal

contracts.contracts.

Grants Information MemorandumGrants Information Memorandum

Grants Information Memoranda(GIM)Grants Information Memoranda(GIM) Statements of UW policy related to grant and contract Statements of UW policy related to grant and contract

issues.issues. Explain how the UW interprets and applies Explain how the UW interprets and applies

regulations applicable to grants & contracts.regulations applicable to grants & contracts. Link: http://www.washington.edu/research/osp/gim/Link: http://www.washington.edu/research/osp/gim/

Formal AgreementsFormal Agreements

Types of Agreements:Types of Agreements: Assistance Agreements:Assistance Agreements:

GrantGrant Cooperative AgreementCooperative Agreement

Procurement Agreements:Procurement Agreements: ContractContract

Assistance Agreements Assistance Agreements GrantGrant

Used to transfer money, property, services, or anything Used to transfer money, property, services, or anything of value to recipient in order to accomplish a public of value to recipient in order to accomplish a public purpose.purpose.

The idea originates with “performer”.The idea originates with “performer”. No substantial involvement of the sponsor is anticipated No substantial involvement of the sponsor is anticipated

during performance of activityduring performance of activity

Cooperative AgreementCooperative Agreement Differs from a Grant in that:Differs from a Grant in that:

The idea The idea maymay originate with “performer” originate with “performer” Substantial sponsor involvement is anticipated.Substantial sponsor involvement is anticipated.

Procurement Agreements: Procurement Agreements:

ContractContract The issuer determines that a procurement contract is The issuer determines that a procurement contract is

appropriateappropriate Usually the purpose is to acquire property or services Usually the purpose is to acquire property or services

for direct benefit or use of the issuerfor direct benefit or use of the issuer Idea originates with the issuerIdea originates with the issuer

Purchase OrdersPurchase Orders Short duration Short duration Specific itemSpecific item

Contract TypesContract Types

Cost-reimbursable ContractCost-reimbursable Contract Fixed Price ContractFixed Price Contract Time-and-Materials ContractTime-and-Materials Contract Labor-hour ContractLabor-hour Contract Plus variations of each of the abovePlus variations of each of the above

Cost-Reimbursable ContractsCost-Reimbursable Contracts

Procurement of non-commercial items, where Procurement of non-commercial items, where the specifications are unknown or indefinite.the specifications are unknown or indefinite.

Issuer generally imposes tighter controls.Issuer generally imposes tighter controls. Little incentive for contractor to control costs.Little incentive for contractor to control costs. May include significant administrative controls.May include significant administrative controls.

Fixed Price ContractsFixed Price Contracts Procurement of supplies or services when Procurement of supplies or services when

specifications are fairly well known; therefore, costs specifications are fairly well known; therefore, costs can be fairly accurately estimated.can be fairly accurately estimated.

Contractor has incentive to control costs.Contractor has incentive to control costs. Minimum administrative burden for the contractor.Minimum administrative burden for the contractor. Preferred method of contracting by the government.Preferred method of contracting by the government.

The BudgetThe Budget

Provides the framework for financial complianceProvides the framework for financial compliance We create a budget(s) number for an award to We create a budget(s) number for an award to

accumulate costs associated with the project.accumulate costs associated with the project. Set up the budget attributes and allocate the Set up the budget attributes and allocate the

budget in the financial systembudget in the financial system Direct cost object codesDirect cost object codes Facilities and Administrative costs Facilities and Administrative costs

Total CostsTotal Costs

A-21, section C.1.A-21, section C.1. The cost of a sponsored agreement is comprised The cost of a sponsored agreement is comprised

of the allocable direct costs incident to of the allocable direct costs incident to performance of the project, plus the allocable performance of the project, plus the allocable portion of the allowable F&A costs of the portion of the allowable F&A costs of the institution….institution….

Direct Costs - UsualDirect Costs - Usual SalariesSalaries BenefitsBenefits Project Supplies – e.g. paper, pencils for a Project Supplies – e.g. paper, pencils for a

survey projectsurvey project Equipment – i.e. SpectrometerEquipment – i.e. Spectrometer Telephone Toll/Long Distance Telephone Toll/Long Distance ConsultantsConsultants Subcontracts or SubawardsSubcontracts or Subawards Patient Care Patient Care Services – e.g. analytical, shopServices – e.g. analytical, shop

Direct costs - ServicesDirect costs - Services

Internal UW services are often charged by a Internal UW services are often charged by a cost or recharge center.cost or recharge center. Cost Center Cost Center - charge less than $175,000 annually - charge less than $175,000 annually

to federally sponsored programs AND less than to federally sponsored programs AND less than $1,000,000 in total charges.$1,000,000 in total charges.

Recharge Center Recharge Center - charge more than $175,000 - charge more than $175,000 annually to federally sponsored agreements OR more annually to federally sponsored agreements OR more than $1,000,000 in total charges.than $1,000,000 in total charges.

Facilities and Administrative CostsFacilities and Administrative Costs (F&A) (F&A)

Costs that are incurred for common or joint Costs that are incurred for common or joint objectives, and, therefore, cannot be identified objectives, and, therefore, cannot be identified readily and specifically with a particular readily and specifically with a particular sponsored project, an instructional activity, or sponsored project, an instructional activity, or any other institutional activityany other institutional activity

Examples of F&A Costs:Examples of F&A Costs: Salary of Department AdministratorSalary of Department Administrator Building utility and maintenance costsBuilding utility and maintenance costs President and Provost offices President and Provost offices

Facilities and Administrative CostsFacilities and Administrative Costs (F&A) (F&A)

F&A costs (previously called Indirect costs or F&A costs (previously called Indirect costs or overhead) are charged to budgets as a overhead) are charged to budgets as a percentage of direct costs.percentage of direct costs.

The percentage rate is negotiated with the The percentage rate is negotiated with the federal government or a rate specified by the federal government or a rate specified by the sponsor.sponsor.

Facilities and Administrative CostsFacilities and Administrative Costs (F&A) (F&A)

F&A charges are calculated automatically by the F&A charges are calculated automatically by the system and added to the expense total dailysystem and added to the expense total daily

F&A charges need to be verified periodically for F&A charges need to be verified periodically for accuracy. accuracy.

Costs- Direct or F & A?Costs- Direct or F & A? Salaries of a computer technician?Salaries of a computer technician?

May be allowable if activity is directly related to the May be allowable if activity is directly related to the objectives of the funded project and over and above their objectives of the funded project and over and above their normal responsibilities. If the activity is general support for normal responsibilities. If the activity is general support for the unit or area their salary would be more administrative the unit or area their salary would be more administrative in nature and normally not allowable as a direct costin nature and normally not allowable as a direct cost

Employee benefits?Employee benefits? Benefits related to direct salary charges to the project are Benefits related to direct salary charges to the project are

allowableallowable Telephone?Telephone?

The monthly cost of a phone line and equipment is generally The monthly cost of a phone line and equipment is generally considered an F&A cost and therefore not normally allowed considered an F&A cost and therefore not normally allowed as a direct cost. Long distance phone call charges may be as a direct cost. Long distance phone call charges may be allowable as a direct cost when they can be specifically allowable as a direct cost when they can be specifically identified as supporting the sponsored activityidentified as supporting the sponsored activity

Costs- Direct or F & A?Costs- Direct or F & A? Laptop for the Professor?Laptop for the Professor?

Allowable with specific sponsor approvalAllowable with specific sponsor approval

Scientific equipment?Scientific equipment? Allowable with the prior approval of the sponsoring agencyAllowable with the prior approval of the sponsoring agency

Chemical supplies?Chemical supplies? Chemicals and other lab supplies the consumption of which Chemicals and other lab supplies the consumption of which

can be specifically identified with a sponsored project are can be specifically identified with a sponsored project are allowable as a direct costallowable as a direct cost

Photocopy costs?Photocopy costs? If specifically identifiable as supporting the sponsored project If specifically identifiable as supporting the sponsored project

are allowableare allowable

Samples used in the lab?Samples used in the lab? Allowable if they can be identified with a specific sponsored Allowable if they can be identified with a specific sponsored

projectproject

The BasicsThe Basics

Program announcement: Request for Proposals Program announcement: Request for Proposals (RFP) – Federal Register(RFP) – Federal Register

Topic: Effects of Fertilizers on DogsTopic: Effects of Fertilizers on Dogs Three year projectThree year project Awards of up to $150,000 per yearAwards of up to $150,000 per year New project New project

The Basics – Budget ElementsThe Basics – Budget Elements What are the budget elements?What are the budget elements? SalarySalary BenefitsBenefits Supplies and Services Supplies and Services

TravelTravel Stationery suppliesStationery supplies Vivarium (animal care & use) chargesVivarium (animal care & use) charges Laboratory testingLaboratory testing

EquipmentEquipment F & AF & A

Reasonable

Allocable

Consistent

Allowable

A-21: Core RequirementsA-21: Core Requirements

Attributes of an “Allowable” CostAttributes of an “Allowable” Cost

An allowable cost must be:An allowable cost must be: REASONABLE: REASONABLE: A prudent business person would A prudent business person would

have purchased this item at this time and paid this have purchased this item at this time and paid this price.price.

ALLOCABLE: ALLOCABLE: It can be assigned to the activity on It can be assigned to the activity on some reasonable basis.some reasonable basis.

CONSISTENTLY TREATED: CONSISTENTLY TREATED: Like costs must be Like costs must be treated the same in like circumstances, as either treated the same in like circumstances, as either direct or F&A costs.direct or F&A costs.

ReasonableReasonable

““A cost may be considered reasonable if the A cost may be considered reasonable if the nature of the goods or services acquired or nature of the goods or services acquired or applied, and the amount involved, reflect the applied, and the amount involved, reflect the action that a action that a prudent personprudent person would have taken would have taken under the circumstances prevailing at the time under the circumstances prevailing at the time the decision to incur the cost was made.”the decision to incur the cost was made.”

Allocability Allocability A cost can be allocable as a direct or an indirect costA cost can be allocable as a direct or an indirect cost Direct cost if the goods or services provided are Direct cost if the goods or services provided are

assignable in accordance with the relative benefits assignable in accordance with the relative benefits received….received…. Incurred solely to advance the work under the sponsored Incurred solely to advance the work under the sponsored

agreementagreement It benefits both the work under the sponsored agreement It benefits both the work under the sponsored agreement

and other work of the institution in proportions that can be and other work of the institution in proportions that can be approximatedapproximated

If a cost benefits two or more interrelated projects in If a cost benefits two or more interrelated projects in proportions that cannot be definitively determined, the proportions that cannot be definitively determined, the cost may be allocated on any reasonable basiscost may be allocated on any reasonable basis

As a Facilities & Administrative (Indirect) cost:As a Facilities & Administrative (Indirect) cost: if it is necessary for the overall operation of the institution if it is necessary for the overall operation of the institution

(and conforms with the other principles in A-21)(and conforms with the other principles in A-21)

Examples: Allocability of CostsExamples: Allocability of Costs Travel by PI to conference Travel by PI to conference (not related to specific (not related to specific

project)?project)? Generally allowable when directly related to the sponsored Generally allowable when directly related to the sponsored

project and not specified as unallowable by the sponsor. project and not specified as unallowable by the sponsor. Some non-federal sponsors specifically disallow travel to Some non-federal sponsors specifically disallow travel to conferencesconferences

Salary of research technician?Salary of research technician? Generally allowableGenerally allowable

Salary of administrative assistant?Salary of administrative assistant? Generally unallowable. Considered a Facilities and Generally unallowable. Considered a Facilities and

Administrative costAdministrative cost Proposal preparation costs?Proposal preparation costs?

Generally unallowableGenerally unallowable

ConsistencyConsistency

Four Cost Accounting StandardsFour Cost Accounting Standards CAS 501: Consistency in estimating, CAS 501: Consistency in estimating,

accumulating, and reporting costsaccumulating, and reporting costs CAS 502: Consistency in allocating costs incurred CAS 502: Consistency in allocating costs incurred

for the same purposefor the same purpose CAS 505: Accounting for unallowable costsCAS 505: Accounting for unallowable costs CAS 506: Cost accounting periodCAS 506: Cost accounting period

REVIEWREVIEW

Introduction to Post Award Research AdministrationIntroduction to Post Award Research Administration Course ObjectivesCourse Objectives Learning ObjectivesLearning Objectives Who are the sponsorsWho are the sponsors Internally who is involved and their roles & Internally who is involved and their roles &

responsibilitiesresponsibilities Regulatory environmentRegulatory environment Types of AgreementsTypes of Agreements Direct & F&A CostsDirect & F&A Costs

Reasonable

Allocable

Consistent

Allowable

A-21: Core RequirementsA-21: Core Requirements

AllowableAllowable Generally, it is not the type of cost that determines Generally, it is not the type of cost that determines

allowability, it is the purpose and circumstance of allowability, it is the purpose and circumstance of the expenditure. the expenditure.

A direct cost must be necessary for performance of A direct cost must be necessary for performance of the project and consistent with the institution’s the project and consistent with the institution’s practicespractices

A cost may be allowable but only as an indirect A cost may be allowable but only as an indirect (F&A) cost, not a direct charge, e.g. proposal (F&A) cost, not a direct charge, e.g. proposal preparationpreparation

A cost may be “expressly” unallowable under the A cost may be “expressly” unallowable under the terms of the agreement, i.e. it is always unallowable terms of the agreement, i.e. it is always unallowable as either a direct or indirect.as either a direct or indirect.

Unallowable CostsUnallowable Costs(Cannot be charged against Federal agreements, used (Cannot be charged against Federal agreements, used

as cost sharing or placed in the F&A cost base)as cost sharing or placed in the F&A cost base)

Unallowable ActivitiesUnallowable Activities(Something you do)(Something you do)

Organized fund raisingOrganized fund raising LobbyingLobbying General public relations & General public relations &

alumni activitiesalumni activities Student activitiesStudent activities Managing investments Managing investments

solely to enhance incomesolely to enhance income

Unallowable Objects Unallowable Objects (Something you buy, a line item)(Something you buy, a line item)

AdvertisingAdvertising Alcoholic beveragesAlcoholic beverages EntertainmentEntertainment Fines & penaltiesFines & penalties Moving costs if employee Moving costs if employee

resigns within 12 monthsresigns within 12 months Certain recruitment costsCertain recruitment costs

Examples: Allowable Versus Examples: Allowable Versus Unallowable CostsUnallowable Costs

Meal expense on campus, no documentation of business Meal expense on campus, no documentation of business purpose?purpose? The purpose must be related to the sponsored project and usually The purpose must be related to the sponsored project and usually

must include the dissemination of Technical informationmust include the dissemination of Technical information Travel expense of Dean and Spouse?Travel expense of Dean and Spouse?

The cost for the Dean may be allowable but the cost of the spouse The cost for the Dean may be allowable but the cost of the spouse travel is generally unallowabletravel is generally unallowable

Alcohol served at a business function?Alcohol served at a business function? Generally unallowable on a sponsored agreement. If the sponsor Generally unallowable on a sponsored agreement. If the sponsor

specifically approves, the funds for the purchase of the alcohol specifically approves, the funds for the purchase of the alcohol must be placed is a 64-XXXX sub-budget and the alcohol must be placed is a 64-XXXX sub-budget and the alcohol purchases made from that discretionary budgetpurchases made from that discretionary budget

Membership in airline courtesy club?Membership in airline courtesy club? Generally unallowableGenerally unallowable

Audit PerspectiveAudit Perspective

How do I know that the cost belongs to this How do I know that the cost belongs to this specific project?specific project? Was the cost included in the budget?Was the cost included in the budget? Is it generally allowable according to A-21?Is it generally allowable according to A-21? Is the cost reasonable as a direct charge to this Is the cost reasonable as a direct charge to this

project?project? Was the cost charged directly to this project?Was the cost charged directly to this project?

Timing of the cost relative to the project periodTiming of the cost relative to the project period

Costing Decision ProcessCosting Decision Process

Principal Investigator initiates expense or has Principal Investigator initiates expense or has delegated authority to individuals associated with delegated authority to individuals associated with the project that have sufficient expertise to the project that have sufficient expertise to determine:determine: Is the cost essential to performance of the project?Is the cost essential to performance of the project? Is the cost a benefit to the project?Is the cost a benefit to the project? Is there a technical basis to support the cost?Is there a technical basis to support the cost? Is there every expectation that the cost will be used for Is there every expectation that the cost will be used for

the purpose intended?the purpose intended?

The Costing Decision ProcessThe Costing Decision ProcessDepartmental Grant Administrator reviews Departmental Grant Administrator reviews cost to determine:cost to determine: Do the services or materials meet the sponsors Do the services or materials meet the sponsors

rules for allowable expenses?rules for allowable expenses? Do the proposed costs exceed any budget Do the proposed costs exceed any budget

category limitations?category limitations? If using federal funds, is the vendor or If using federal funds, is the vendor or

subcontractor debarred or suspended?subcontractor debarred or suspended? Is there a sufficient budget balance?Is there a sufficient budget balance? Is it normally a direct or F&A expense?Is it normally a direct or F&A expense?

If needed, request assistance.If needed, request assistance.

Expense Allowability Flow ChartExpense Allowability Flow Chart

Is it an expense? NO(receipts, etc.)

Use alternate procedures.

Is it legal? NO(illicit drugs, etc.)

Don’t do it or youmay go to JAIL!

Is it permissible? NO(parking tickets, etc.)

Pay for it yourself or don’t do it.

Is it for an allowable activity?

NO(fund raising, etc.)

Use an unallowable object code and/or charge it to a non-sponsored account.

continued

Flow Chart (continued)Flow Chart (continued)

Is it an allowable object? NO(alcohol, fines, etc.)

Use an unallowable object code and/or charge it to a non-sponsored account.

Is it for a sponsored project?

NO Use a non-sponsored budget

Permissible by agency? NO Use a non-sponsored budget.

Charge it to: Sponsored Research Account

Allowable Object Code

continued

YES

Food for ThoughtFood for Thought

If a cost is not “unallowable” by mention, it is not If a cost is not “unallowable” by mention, it is not necessarily “allowable” by inference.necessarily “allowable” by inference.

Just because an item is in the approved budget Just because an item is in the approved budget doesn’t necessarily mean it is an allowable cost.doesn’t necessarily mean it is an allowable cost.

EFFORT REPORTINGEFFORT REPORTING

Personnel CostsPersonnel Costs

Personnel costs include salaries/wages and Personnel costs include salaries/wages and fringe benefits and associated F&A.fringe benefits and associated F&A.

Make up the largest expense category charged Make up the largest expense category charged to grants & contracts. to grants & contracts.

Allowable Personnel CostsAllowable Personnel Costs

The apportionment of employees' salaries and The apportionment of employees' salaries and wages which are chargeable to more than one wages which are chargeable to more than one sponsored agreement or other cost objective will sponsored agreement or other cost objective will be accomplished by methods which will-be accomplished by methods which will-

1)1) be in accordance with Sections A.2 and C; be in accordance with Sections A.2 and C;

2)2) produce an equitable distribution of charges for produce an equitable distribution of charges for employee's activities; and employee's activities; and

3)3) distinguish the employees' direct activities from their distinguish the employees' direct activities from their F&A activities.F&A activities.

Allowable Personnel CostsAllowable Personnel Costs

Reference: OMB Circular A-21, J10Reference: OMB Circular A-21, J10 Requires certification of payroll costs charged to Requires certification of payroll costs charged to

federally sponsored agreements.federally sponsored agreements. The process, must recognize the principle of The process, must recognize the principle of

after-the-fact confirmation or determination so after-the-fact confirmation or determination so that costs distributed represent actual costs, that costs distributed represent actual costs, unless a mutually satisfactory alternative unless a mutually satisfactory alternative agreement is reached. agreement is reached.

After-the-Fact: Activity RecordsAfter-the-Fact: Activity Records

At the UW, we have two after-the-fact effort At the UW, we have two after-the-fact effort certification processes:certification processes: The Faculty Effort Certification (FEC) process applicable The Faculty Effort Certification (FEC) process applicable

to all faculty paid from sponsored awards.to all faculty paid from sponsored awards. The Grant and Contract Payroll Certification The Grant and Contract Payroll Certification

Report(GCCR) for non-faculty personnel paid from Report(GCCR) for non-faculty personnel paid from sponsored awardssponsored awards

University policy on faculty effort is found in GIM 35University policy on faculty effort is found in GIM 35

SUBAWARDINGSUBAWARDINGSubgrant, Subcontract, or ?Subgrant, Subcontract, or ?

SUBAWARD OR SERVICESUBAWARD OR SERVICE Characteristics indicative of a payment for goods Characteristics indicative of a payment for goods

and services received by a vendor are when the and services received by a vendor are when the organization: organization:

1)1) Provides the goods and services within normal Provides the goods and services within normal business operations; business operations;

2)2) Provides similar goods or services to many Provides similar goods or services to many different purchasers; different purchasers;

3)3) Operates in a competitive environment; Operates in a competitive environment; 4)4) Provides goods or services that are ancillary to Provides goods or services that are ancillary to

the operation of the Federal program; and the operation of the Federal program; and 5)5) Is not subject to compliance requirements of the Is not subject to compliance requirements of the

Federal programFederal program. .

SUBAWARDSSUBAWARDS

Subawards are issued and monitored in the Subawards are issued and monitored in the Office of Sponsored Programs (OSP)Office of Sponsored Programs (OSP)

Documentation retained in Department filesDocumentation retained in Department files Endorsement from organization’s business office.Endorsement from organization’s business office. Budget, justification, scope of work statement Budget, justification, scope of work statement

included in the proposal.included in the proposal. Technical reportsTechnical reports

Cost SharingCost Sharing

A-110: A-110: Post Award COST SHARINGPost Award COST SHARING

Cost Sharing (or Matching) is the portion of the Cost Sharing (or Matching) is the portion of the cost of a project not borne by the sponsoring cost of a project not borne by the sponsoring agencyagency

Types of cost sharing:Types of cost sharing: Mandatory (M)Mandatory (M) Committed (Voluntary) (R )Committed (Voluntary) (R ) Voluntary – Not recordedVoluntary – Not recorded

Cost SharingCost Sharing A-21/CAS considerationsA-21/CAS considerations

All costs of a project must be classified consistently, All costs of a project must be classified consistently, regardless of the funding sourceregardless of the funding source

Cost sharing can have a Cost sharing can have a significantsignificant impact on the F&A impact on the F&A rate, auditors and negotiators want institutions to capture rate, auditors and negotiators want institutions to capture all cost sharing, mandatory and committedall cost sharing, mandatory and committed

Funding agency requirementsFunding agency requirements Commitments made in a research proposal become a Commitments made in a research proposal become a

condition of the award, whether or not the cost sharing condition of the award, whether or not the cost sharing was required (mandatory)was required (mandatory)

Cost SharingCost Sharing What Can be Used as Cost Share?What Can be Used as Cost Share?

Cash ExpendituresCash Expenditures Third Party In-Kind ContributionsThird Party In-Kind Contributions Unrecovered F&A costs (can be used if agency has Unrecovered F&A costs (can be used if agency has

approved)approved) Volunteer Services: Volunteer Services: IFIF a necessary and integral a necessary and integral

part of the projectpart of the project Other employee servicesOther employee services Donated supplies (must be reasonable and at fair Donated supplies (must be reasonable and at fair

market value)market value)

Cost Sharing ConsiderationsCost Sharing Considerations Cash and third party in-kind contributions must Cash and third party in-kind contributions must

meet all the following criteria:meet all the following criteria: Are verifiable from the recipient’s recordsAre verifiable from the recipient’s records Cannot be used as cost sharing on other federal Cannot be used as cost sharing on other federal

projectsprojects Are necessary and reasonable for accomplishment of Are necessary and reasonable for accomplishment of

project objectivesproject objectives Are allowable under the cost principlesAre allowable under the cost principles Are not paid by the Federal government under another Are not paid by the Federal government under another

award award Are provided for in the approved budget when Are provided for in the approved budget when

required by Federal agencyrequired by Federal agency Conform to other provisions of A-110, as applicableConform to other provisions of A-110, as applicable

Potential Problems Associated Potential Problems Associated with Cost Sharingwith Cost Sharing

Can we demonstrate to the funding agency that Can we demonstrate to the funding agency that the cost sharing commitment has been fulfilled?the cost sharing commitment has been fulfilled?

Do we track cost sharing on a project-by-project Do we track cost sharing on a project-by-project basis?basis?

Are we treating cost sharing consistently with Are we treating cost sharing consistently with other project costs, i.e., classify it as organized other project costs, i.e., classify it as organized research? research?

Are we overstating our F&A rate by not capturing Are we overstating our F&A rate by not capturing cost sharing?cost sharing?

Potential Problems Associated Potential Problems Associated with Cost Sharingwith Cost Sharing

Do effort reports capture cost shared effort (both mandatory Do effort reports capture cost shared effort (both mandatory and voluntarily committed)?and voluntarily committed)? The Faculty Effort Certification (FEC) reports do capture faculty effort The Faculty Effort Certification (FEC) reports do capture faculty effort

cost share. Non-faculty effort cost share is captured using the Non-FEC cost share. Non-faculty effort cost share is captured using the Non-FEC cost share report.cost share report.

Are the same cost sharing funds used to meet the matching Are the same cost sharing funds used to meet the matching requirements on more than one project?requirements on more than one project? Generally an expense may only be claimed as cost share one time for Generally an expense may only be claimed as cost share one time for

one award.one award. Do we recover cost sharing expenditures through our F&A Do we recover cost sharing expenditures through our F&A

rate?rate? Cost shared expense go into the research base for F&A rate Cost shared expense go into the research base for F&A rate

determination and therefore are not recovered in the F&A rate. The determination and therefore are not recovered in the F&A rate. The F&A rate is applied to all research base costs on a Modified Total Direct F&A rate is applied to all research base costs on a Modified Total Direct Cost (MTDC) basisCost (MTDC) basis

Cost Sharing-Recurring IssuesCost Sharing-Recurring Issues

DocumentationDocumentation

CertificationsCertifications

Accounting SystemsAccounting Systems

Sub-Recipient MonitoringSub-Recipient Monitoring

Program IncomeProgram Income

Recipients must account for income related to Recipients must account for income related to projects financed by the federal governmentprojects financed by the federal government

Recipients may retain and use income if Recipients may retain and use income if allowed by agency by:allowed by agency by: Adding to the project to further the objectivesAdding to the project to further the objectives Financing the non-federal shareFinancing the non-federal share Deducting from the total cost of the projectDeducting from the total cost of the project

A-110: Program IncomeA-110: Program Income

If agency does not specify in award:If agency does not specify in award:1)1) Support research - added to projectSupport research - added to project2)2) All others - deducted from the cost of the projectAll others - deducted from the cost of the project

No obligation to government for income earned after No obligation to government for income earned after end of projectend of project

Costs for generation of income may be deducted from Costs for generation of income may be deducted from gross incomegross income

No obligation to government for income earned from No obligation to government for income earned from license fees and royaltieslicense fees and royalties

Set up in a sub-budgetSet up in a sub-budget Subject to terms and conditions of the award.Subject to terms and conditions of the award. Should be expended prior to expenditure of award Should be expended prior to expenditure of award

funds.funds. No funds remaining at the end of the project.No funds remaining at the end of the project.

Program IncomeProgram Income

Cost TransfersCost Transfers

OMB Circular A-21OMB Circular A-21

Any costs allocable to a particular Any costs allocable to a particular sponsored agreement under the standards sponsored agreement under the standards provided in this Circular may not be shifted provided in this Circular may not be shifted to other sponsored agreements in order to to other sponsored agreements in order to meet deficiencies caused by overruns or meet deficiencies caused by overruns or other fund considerations, to avoid other fund considerations, to avoid restrictions imposed by law or by terms of restrictions imposed by law or by terms of the sponsored agreement, or for other the sponsored agreement, or for other reasons of convenience.reasons of convenience.

Cost TransfersCost Transfers PurposePurpose

Allow for reassignment of costs to a sponsored program Allow for reassignment of costs to a sponsored program from another source of funds (account)from another source of funds (account)

PolicyPolicy Written justification and approval needed for Written justification and approval needed for

reassignment of expensesreassignment of expenses

Cost Transfers are appropriate if the transfer is for: Cost Transfers are appropriate if the transfer is for: 1)1) correction of error correction of error 2)2) charges benefit more than one program (distribution charges benefit more than one program (distribution

of costs based on benefits received)of costs based on benefits received)3)3) programs involve closely related workprograms involve closely related work

UW Cost Transfer Policy is contained in GIM 15UW Cost Transfer Policy is contained in GIM 15

Cost TransfersCost Transfers

Cost Transfers are Cost Transfers are notnot Appropriate if the transfer is: Appropriate if the transfer is:1)1) To reduce overruns if transfer is from one federal To reduce overruns if transfer is from one federal

program to another; program to another; 2)2) For reasons of convenienceFor reasons of convenience

Transfers should be processed:Transfers should be processed:1)1) In accordance with institutional policies and In accordance with institutional policies and

procedures, inclusive with conditions cited in the procedures, inclusive with conditions cited in the award; award;

2)2) In a timely manner; and In a timely manner; and 3)3) For older transfers, high level approval sometimes For older transfers, high level approval sometimes

required.required.

Other ItemsOther Items

Budget and Program Plan RevisionsBudget and Program Plan Revisions Deviations must be reported and prior approval Deviations must be reported and prior approval

requestedrequested Prior approval required in non-construction awards as Prior approval required in non-construction awards as

follows:follows: Change of Key PersonnelChange of Key Personnel Absence of 3 months or 25% reduction in time of P.I.Absence of 3 months or 25% reduction in time of P.I. Additional fundingAdditional funding Transfer of F&A to direct or vice versaTransfer of F&A to direct or vice versa Inclusion of costs requiring prior approval in CircularsInclusion of costs requiring prior approval in Circulars Transfer of funds allotted for trainingTransfer of funds allotted for training Sub awardsSub awards Change of scopeChange of scope

A-110: A-110: Budget and Program ChangesBudget and Program Changes

No other prior approvals can be imposed No other prior approvals can be imposed Agencies authorized to waive approvals except Agencies authorized to waive approvals except

for:for: Change in scope of workChange in scope of work Additional fundingAdditional funding

Transfers may be restricted if award is $100,000 Transfers may be restricted if award is $100,000 or more and transfer exceeds 10% of approved or more and transfer exceeds 10% of approved budgetbudget

A-110: A-110: Budget and Program Changes Budget and Program Changes

Principal Investigator TransferPrincipal Investigator Transfer

Options during the term of an award Options during the term of an award If both institutions and the sponsor agree, the award If both institutions and the sponsor agree, the award

may be transferred to the new institutionmay be transferred to the new institution Institution may nominate replacement P.I., subject to Institution may nominate replacement P.I., subject to

sponsor approvalsponsor approval May subcontract portion of work to PI’s new May subcontract portion of work to PI’s new

organizationorganization Request termination of awardRequest termination of award

Departmental MonitoringDepartmental Monitoring

Continuous OversightContinuous Oversight Technical ProgressTechnical Progress Financial StatusFinancial Status

Departmental Fiscal Departmental Fiscal Support ToolsSupport Tools Online SystemsOnline Systems Web-based Web-based

applicationsapplications Data downloadsData downloads

Items Requiring Special MonitoringItems Requiring Special Monitoring Salary LimitationsSalary Limitations Effort ReportingEffort Reporting Cost Sharing/MatchingCost Sharing/Matching Program IncomeProgram Income F&A CostsF&A Costs FabricationFabrication Patient Care CostsPatient Care Costs Alterations/RenovationsAlterations/Renovations Payment to Students Payment to Students

and Fellows and Fellows

Current Hot ButtonsCurrent Hot Buttons Final ReportsFinal Reports Cost TransfersCost Transfers Cost SharingCost Sharing Effort ReportingEffort Reporting Departmental Administrative CostsDepartmental Administrative Costs DS-2 ComplianceDS-2 Compliance Subrecipient MonitoringSubrecipient Monitoring Program IncomeProgram Income

. . . and they lived happily ever . . . and they lived happily ever after?after?

SummarySummary Take a proactive approach to fund management. Take a proactive approach to fund management. It is imperative that all parties work as a team. It is imperative that all parties work as a team. Proper fund management involvesProper fund management involves

– Adhering to institutional and sponsor guidelines and Adhering to institutional and sponsor guidelines and regulations, regulations,

– Establishing a proper financial Establishing a proper financial accountabilityaccountability structure, and structure, and

– Ensuring proper financial management with attention Ensuring proper financial management with attention to the integrity of data. to the integrity of data.

In ConclusionIn Conclusion

ResourcesResources OMB A-21 & OMB A-110 OMB A-21 & OMB A-110

http://www.whitehouse.gov/omb/circulars_default/

CFR – Code of Federal Regulations CFR – Code of Federal Regulations http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=%2Findex.tpl

FAR – Federal Acquisition Regulations FAR – Federal Acquisition Regulations http://acquisition.gov/comp/far/index.html

Grants Information Memorandums (GIMs) Grants Information Memorandums (GIMs) http://www.washington.edu/research/osp/gim/

Office of Sponsored Programs Office of Sponsored Programs http://www.washington.edu/research/main.php?page=osp

Grant & Contract Accounting Grant & Contract Accounting http://www.washington.edu/research/gca/office/index.html