why we’re here :
DESCRIPTION
“Basics of Sponsored Projects Financial Administration” MUSC Grants and Contracts Accounting Spring 2003 http://research.musc.edu/gca/home.htm. Why We’re Here :. Annual Sponsored Awards FY 2001 = $ 123.9 million FY 2002 = $ 131.1 million FY 2003 YTD = $ 129.3 million through 4/2003 - PowerPoint PPT PresentationTRANSCRIPT
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“Basics of Sponsored Projects Financial Administration”
MUSC Grants and Contracts Accounting
Spring 2003
http://research.musc.edu/gca/home.htm
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Why We’re Here :
• Annual Sponsored Awards– FY 2001 = $ 123.9 million– FY 2002 = $ 131.1 million– FY 2003 YTD = $ 129.3 million through
4/2003
• Annual Sponsored Projects Expenditures– FY 2001 = $ 86.9 million– FY 2002 = $ 101.2 million– FY 2003 YTD = $ 96.7 million through
4/2003
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Part IGeneral Topics
• Key Terms (or “Acronym Soup”)
• Roles & Responsibilities at MUSC
• Types of Sponsors, Sponsored Agreements, & Functions
• The Life Cycle of a Sponsored Project
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Part IICosting Topics
• Regulatory Requirements• Allowable and Unallowable Costs• Direct Costs vs. Facilities &
Administrative Costs• Key Budget and Expense Items• Post-Award Monitoring• Reporting to the Sponsor• MUSC Financial Reports• Financial Closeout
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Part IGeneral Topics
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Key Terms• RFP = Request for Proposals = agency’s solicitation for
proposals• Proposal = descriptive narrative and proposed budget
submitted to funding agency• Proposal Data Sheet (The “Blue Sheet”) (MUSC)• NGA = Notice of Grant Award (NIH) = legal award document• GCA Form = Grant & Contract Acceptance Form (MUSC)• Project Period = period of time approved for project
programmatically• Budget Period = incremental period being funded• P.I. = Principal Investigator• Program Administrator = sponsor’s technical official• Grants Specialist = sponsor’s administrative/financial official
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Key Terms
• CAS = Cost Accounting Standards– DS-2 = Disclosure Statement
• OMB Circular A-21• OMB Circular A-110 • CFR = Code of Federal Regulations• FAR = Federal Acquisition Regulations
• UDAK = User-Defined Accounting Key• CAMR = Chart of Accounts Maintenance Request• PEAR = Position/Employee Action Form
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Key Terms
• Prior Approval = written authorization evidencing prior consent of sponsor
• Expanded Authority = delegation of approvals to grantee
• Allowable Costs• Unallowable Costs• Direct Costs• F&A Costs = Facilities & Administrative Costs• MTDC = Modified Total Direct Costs• TDC = Total Direct Costs• Carryover• Cost Sharing• Cost Transfer• Cost Overrun
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Key Sponsoring Agencies & Offices
• OMB = Office of Management and Budget
• DHHS = Department of Health and Human Services– DCA = Division of Cost Allocation (MUSC’s cognizant
audit agency)
• OIG = Office of Inspector General - each federal agency has an OIG responsible for audit, investigations, & inspections
• NIH = National Institutes of Health
• DOD = Department of Defense
• DOE = Department of Energy
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Roles & Responsibilities - Departmental
• Principal Investigator:– Serves as Project Manager– Accountable for the scientific conduct of the project and
expenditure of funds– Responsible for all technical reporting
• Departmental Business Personnel:– Monitors budgets and expenses from proposal to close-
out– Pre-audits expenditures and maintains supporting
documentation– Coordinates department’s activity (effort) reporting
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Roles & Responsibilities - Central
• Office of Research & Sponsored Programs (ORSP):– Coordinates proposal processing, regulatory compliance,
and awards administration– Reviews and processes budget revisions, no-cost
extensions, & other actions requiring sponsor approval
• Grants & Contracts Accounting (GCA):– Sponsor financial reporting, administration, & activity
(effort) reporting– Auditing sponsored projects expenditures– Preparing rate studies & negotiating Facilities &
Administrative (F&A) Cost Rates & Fringe Benefits Rates
– Developing policies and procedures & related training programs to ensure administrative compliance
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Roles & Responsibilities - Central
• Office of Research Integrity (ORI):– MUSC Academic Compliance Assurance Program– Institutional Review Board (IRB)
• Reviews, approves/disapproves research activities involving humans as subjects in accordance with federal regulations
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Types of Sponsors
• Federal Agencies– Note: Federal regulations apply to subawards
when the prime award is from a federal sponsor
• State & Local Government Agencies
• Corporations
• Foundations / Charities
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Sponsored Functions at MUSC
• Sponsored Research– Clinical Research– Non-Clinical (Basic) Research– Research Training
• Sponsored Instruction– Education/Training– AHEC = SC Area Health Education Consortium
• Other Sponsored Activities– Public Service– Other Activities
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Types of Sponsored Agreements
• Grant– Purpose is to transfer money, property, services, or
anything of value to a recipient in order to accomplish a public purpose
– No substantial involvement is anticipated between sponsor and recipient during the performance of activity
• Contract / Subcontract– Principal purpose is to acquire property or services for
direct benefit or use of the sponsor
• Cooperative Agreement– Principal purpose is to transfer funds to recipient to
accomplish a public purpose– Substantial involvement is anticipated between sponsor
and recipient during performance of activity
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Types of Sponsored Agreements
• Major Types of NIH Grants:
– "R" series = Research Project Grants (R01)
– Program Project Grants (P01)
– "K" series = Career Development Awards
– NRSA = National Research Service Awards (fellowships and traineeships)
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The Life Cycle of a Sponsored Project
• Pre-Award
PI conducts research and identifies funding opportunities
Internal review and routing of proposal - P.I., Department, ORSP, IRB, etc.
ORSP reviews submission of proposal to sponsor
ORSP negotiates with sponsor
ORSP receives funding/executes award agreement on behalf of MUSC
Refer to “The Grant Cycle” Flowchart.
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The Life Cycle of a Sponsored Project
• Post-Award
GCA establishes UDAK in General Ledger (via CAMR) GCA enters approved budget in G/L P.I. schedules project activities & progress reporting Department transacts against the award & pre-audits
expenditures GCA conducts post-audit of expenditures Report on award – Financial-GCA; Technical-P.I. GCA invoices/collects money from sponsor
Exception: Clinical trials are billed per patient by Department
Department & GCA close award GCA prepares cost analyses and acts as audit liaison
Refer to “The Grant Cycle” Flowchart.
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Part IICosting Topics
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Regulatory Requirements
• OMB Circular A-21:
– “Cost Principles for Educational Institutions”
– Guidelines concerning:
• Cost Accounting Standards
• Determining allowable and unallowable costs on sponsored awards
• Determining direct vs. facilities and administrative costs
• Preparation of facilities and administrative cost rate proposals
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Regulatory Requirements
• OMB Circular A-110:
– “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations”
– Guidelines for post-award grant and contract administration covering requirements for:
• Financial reporting
• Procurement
• Property standards
• Cost sharing
• Project close-out
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Regulatory Requirements
• NIH Grants Policy Statement:– Grantees’ policy requirements that serve as the
terms and conditions of NIH grant awards– Contains information on expanded authority, prior
approval issues, allowable vs. unallowable expenses, trainee costs, travel costs, etc.
• CFR: Code of Federal Regulations– General & permanent rules published by executive
departments & Federal agencies
• FAR: Federal Acquisition Regulations– Uniform policies for acquisition of supplies & services
by executive agencies
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Regulatory Requirements
• Cost Accounting Standards (CAS):– Historically applied to contractors– Applied to educational institutions effective
7/1/1998
– 501 : Consistency in Estimating, Accumulating and Reporting Costs
– 502 : Consistency in Allocating Costs Incurred for the Same Purpose
– 503 : Accounting for Unallowable Costs– 506 : Cost Accounting Period
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Regulatory Requirements
• MUSC’s CAS Policies and Procedures approved by the Board of Trustees in April 1999– Web address: http://research.musc.edu/cas/toc.htm
– Affiliates– Clinical Trials– Cost Sharing– Effort Reporting– F & A Costing– Proposal and Rebudgeting– Recharge Centers– Service Centers– Disclosure Statement (DS-2)
• Submitted to DHHS to provide a detailed description of MUSC’s cost accounting practices
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Regulatory Requirements
• When in Doubt:
– Review the award’s specific terms and conditions– Review the original approved budget– Review the proposal budget justification– Reference the sponsor’s regulations– Reference MUSC’s CAS policies/procedures and DS-2– Contact Grants and Contracts Accounting
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Allowable and Unallowable Costs
• Costs are reimbursable by the federal government only if they are:
– Reasonable– Allocable– Allowable– Consistently Treated
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– Reasonable:• A prudent business person would have purchased
this item and paid this price• Example - Purchase of first class airfare tickets
when coach tickets are available is unreasonable
– Allocable:• Expenses can be assigned to the activity on some
reasonable basis• Example - Charging projects based on availability
of funds does not have a reasonable allocation basis
Allowable and Unallowable Costs
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– Allowable:• Expenses must be allowable or not specifically
excluded as specified by government regulations
• Costs that the sponsor is willing to reimburse
– Consistently Treated:• Like costs must be treated the same in like
circumstances as either direct or F&A costs• Why? To help ensure that all costs are assigned
correctly by requiring that they be assigned consistently and to avoid inappropriate charges to the federal government & other sponsors
Allowable and Unallowable Costs
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Direct Costs
• Costs which can be identified specifically with a project, program, or activity at MUSC
• Must be included in the award budget, or have prior approval of sponsor– Examples: Salary of researcher, laboratory
supplies purchased for project, and animal care costs
• Refer to “Direct and Facilities and Administrative Costs Reference Table”
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Facilities & Administrative Costs
• Costs that benefit multiple projects or activities at MUSC, and cannot be easily identified with a specific project, program, or activity
– Examples: Administrative and clerical salaries, office supplies, and equipment depreciation
• Costs must be consistently treated - expenses for similar purposes must be treated the same under like circumstances
• Refer to “Direct and Facilities and Administrative Costs Reference Table”
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Post-Award Monitoring
• Monitor expenditures for allowability
• Monitor changes requiring prior approval of sponsor (or approval by ORSP under “Expanded Authorities”):
– Change in scope
– Change in key personnel
– Carryover of unobligated balances to next budget period
– No-cost extension
– Subcontracting
– Budget revisions
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Post-Award Monitoring
• Monitor cost transfers
– Follow MUSC and NIH Cost Transfer Policies
– Thorough written justification & GCA approval is required for transfers to Sponsored UDAKs
– Use PEAR Form “General Remarks” section for justification for salary transfers
• Monitor subrecipients to ensure:
– Technical compliance (P.I.’s responsibility)
– Financial compliance (shared responsibility of P.I., Department, & GCA)
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Key Budget and Expense Items
• Salaries & Fringe Benefits• Equipment • Supplies• Travel• Subawards• Cost Sharing• F&A Costs
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Salaries & Fringe Benefits• Salary expenditures charged via PEARs must accurately reflect the
time and effort expended on the award
• Key personnel should maintain the proposed level of effort
• Salary charges must be supported by Activity Reports– Monthly-paid employees certify effort on a quarterly after-the-fact basis– Bi-weekly-paid employees report effort via time-cards
• Fringe Benefits– MUSC charges fringe benefits to Sponsored Projects using fixed Fringe
Benefits Rates based on employment type (effective 7/1/02)
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Salaries & Fringe Benefits
• Combined Salary– Institutional base salary combining MUSC + Affiliate salary– Incentive pay must be excluded for all Federal awards
• NIH Salary Cap– Institutional base salary used to calculate salary charges
to NIH may not exceed Executive Level I salary level (currently $171,900 per year)
– Establish a NIH Salary Cap UDAK to account for effort in excess of cap (Department submits CAMR)
• Affiliate (UMA) Salaries– Submit Affiliate Worksheet with PEAR Form– Web address: http://research.musc.edu/gca/forms.htm
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Equipment
• Equipment = An article of non-expendable, tangible property having a useful life of more than two years and costing at least $5,000
– Special purpose equipment includes items that are generally usable only for research, medical, scientific, or technical purposes
• Can normally be charged as direct costs
– General purpose equipment includes such items as office equipment, heating and cooling units, and computing devices
• Cannot normally be charged as direct costs
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Supplies
• Materials & Supplies– Expendable items that are consumed or
expended when put to use, or have an expected service life of one year or less
– Medical/scientific/laboratory supplies– Equipment under $5000
• Office Supplies– Unallowable as a direct cost unless there are
unlike (special) circumstances
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Travel
• MUSC employees are subject to State of South Carolina travel regulations regardless of the source of funds being charged
• Limited to individuals named on or supported by the award
• Travel expenses incurred by consultants & private entities are subject to the Federal Joint Travel Regulations (FJTR)
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Subawards
• Contracting out substantive programmatic project work to another institution or entity
• If subcontracting becomes necessary after the award is issued, prior approval from the sponsor is required
• Account 50261 - First $25,000 of each new subaward; included in F&A cost calculations
• Account 50262 - Expenditures in excess of $25,000 for each subaward; excluded from F&A cost calculations
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Cost Sharing
• Cost Sharing (or “Matching”) represents the use of institutional funds to supplement project costs not borne by the sponsor
• Must be reported to the sponsor
• Administrative requirements for Cost Sharing are itemized in Circular A-110– Verifiable– Not counted toward more than one federal program– Necessary & reasonable– Allowable under applicable cost principles– Not funded by other Federal funds, unless authorized– Provided for in the approved budget
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Cost Sharing• Types of Cost Sharing:
– #1 - Mandatory• Required by the sponsor• Department must establish a Cost Share UDAK (Department
submits a CAMR)
– #2 - Voluntary Committed• Not required by sponsor but becomes mandatory when
included in proposal• Department must establish a Cost Share UDAK
– #3 - Voluntary Uncommitted• When actual effort (for senior personnel only) exceeds
committed effort
• Separate UDAK should not be established!
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F&A Cost Rates *
• If more than 50% of a project is performed in facilities not owned by the institution or rent is directly allocated to the project, then the Off-Campus Rate is applicable.
• The F&A cost rates apply to MTDC = Salaries & wages, fringe benefits, materials & supplies, services, travel, fixed charges, & the first $25,000 of each subcontract.
* Effective Period 7/1/2001 - 6/30/2004
On-Campus
Off-Campus
OrganizedResearch
Capped Uncapped
46.0%
49.0%
26.0%
29.0%
OtherSponsoredActivities
30.0% 26.0%
Instruction 35.9% 26.0%ClinicalTrials 25.0%
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Reporting to the Sponsor
• Financial Reports– Federal Financial Status Report (SF269)– Federal Report of Cash Transactions (SF272)– Invoice– Special reports as required by agreement
• Technical Reports– Progress Reports– Final Report
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Reporting to the Sponsor
• Federal Financial Status Reports (SF269)
– NIH SNAP (Streamlined Noncompeting Award Process) Awards:
• FSR not required annually, but final FSR must be submitted no later than 90 days after the end of the project cycle
– Non-SNAP Awards:
• Required annually, except for awards that require more frequent reporting
• Must be submitted no later than 90 days after the end of each budget period
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Reporting to the Sponsor
• Subawards under Federal Prime Awards:
– Check subcontracts terms & conditions for report/invoice due dates
– Typically due within 60 days so that prime recipient can meet 90-day reporting deadline
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Financial Closeout
• Final Financial Status Report or Invoice• Final Inventory Statement and Certification• Final Technical Report• All reports must be submitted on a timely basis,
in accordance with grant terms (usually within 60 to 90 days after project termination)
• Refund any unobligated cash advance• Account for real and personal property• Agency retains the right to recover disallowances
until final audit
– Failure to submit timely and accurate reports may affect future funding!
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MUSC Financial Reports• http://finlin1.harborview.musc.edu/NFuse15/html/login.htm
• Available Balance (online)
• Month-End Financial Reports (online)– Budget Transaction– Transaction Detail– Commitment/Encumbrance Report– Project Summary– Unit / Department Summary– Principal Investigator’s Report (new version coming soon)
• Grants & Contracts Management Reports– Active Projects Summary Reports (monthly)– Clinical Trials & Basic Research Projects Reports (monthly)– F&A Cost Recovery Reports (monthly)– Life-to-Date Transaction Report (ad hoc - contact GCA Accountant)
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Questions?