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SPONSORED
PROGRAMS OPERATIONS GUIDE
Monitoring Project Performance
Upon the acceptance of grant and contract agreements, the University becomes responsible for complying with the regulations, guidelines, technical and fiscal reporting or billing requirements, and management procedures as prescribed by the awarding agency. The majority of grant and contract awards received by the University require standard accounting, reporting, and billing procedures; and, in most cases, normally approved University fiscal procedures, if properly applied in processing transactions, will satisfy procedural and documentation requirements.
The principal investigator is primarily responsible for the grant or contract. He/she has full responsibility for adherence to the award conditions. However, Grants & Contracts Administration will assist the principal investigator or other personnel in the clarification of any financial matter on which the principal investigator may be unclear. Federal grants and contracts must comply completely with applicable federal requirements. State grants and contacts also have their own particular requirements.
To ensure required reporting and funding of sponsored projects is accomplished in a timely manner, it is essential for all charges and adjustments to sponsored projects to be recorded on the official records as promptly as possible. Accordingly PI's and PD's should arrange for a prompt review of the monthly Statement of Accounts. Such review should be followed by the immediate processing of any changes, transfers, or adjustments appropriate, if such items are not already in process. Auditors are extremely critical of late charges, transfers, and adjustments to sponsored accounts. See Post Award Program Administration : Cost Transfers detailed in Section 7 of this Operating Guide.
The following areas usually require special attention of a principal investigator or project director.
Budget Categories Closely Controlled by the Sponsor. Expenditures require continuous internal monitoring to prevent budget category overruns.
Equipment Procured on Federally-Sponsored Projects. All research equipment costing $1,000 or more, and all general purpose equipment (i.e., equipment which can readily be utilized for some purpose other than research) costing $1,000 or more, should be itemized in detail in the proposal and in the approved grant or contract. Otherwise, specific written approval may be needed from the sponsor prior to the purchase of such equipment. In addition, for equipment costing $1,000 or more, internal and, when applicable, external screening for available suitable equipment must be performed. If suitable equipment is available, it must be used in lieu of purchasing additional equipment. Equipment screening forms must be attached to all purchase requistions for each item with a unit cost of $1,000 or more.
Controls and/or Requirements for Expenditures of Sponsored Program Funds. The expenditure of funds received from a grant or contract must be made in accordance with University policies and procedures governing the expenditure of general funds of the University. When grant or contract funds have additional controls and requirements imposed by the sponsor, strict compliance is required.
Commitments or expenditures will not be made until the grant is officially awarded and accepted, or the contract has been fully executed, or as provided for under a pending award account approved by the Office of Grants & Contracts Administration.
Commitments or expenditures will not be made subsequent to the completion date of the project. Pending receipt of a sponsor approved request for project extension, the department head may request in writing to the Office of Grants & Contracts Administration, preliminary extension of the project.
Rebudgeting. The principal investigator or project director is charged with the responsibility of establishing a project's operating budget and maintaining it within the limits set by the sponsor for the period(s) of the project. Limitations on the rebudgeting of project funds, and requirements to be met in rebudgeting such funds, vary markedly among agencies; consequently, general guidelines and specific procedures are omitted from this manual. Refer to the Rebugeting section of these procedures, or contact the Office of Grants & Contracts Administration for specific guidelines and requirements.
Other Federal Regulations Relating to Protection of Human Subjects, Care of Animals, Inventions and Patents, Publications, Copyrights, etc. The Office of Research Development may be contacted for counsel, advice, and assistance.
A labor distribution system is required by OMB Circular A-21. The requirements for an effort reporting system involve an after-the-fact certification of the percentage of effort directly devoted to sponsored projects, including contributed time; and verification that employees are not charging more than 100% of their time to sponsored projects.In order for charges to sponsored project accounts for personal services of professorial, professional and non-professional staff may be properly documented, the University maintains an appointment and workload distribution system.
Percentage of Salary. The planned percentage of salary allocated to the grant or contract account must reflect the planned percentage of effort to be devoted to the project.
After-the-Fact Certification of Time or Effort. This type of certification is required of all salaried personnel whenever a portion of their salary is charged to a grant or contract account.
Monthly Effort Report. This report documents the direct effort on a sponsored project and will be mailed monthly to each PI/PD. Each report is a representation of one month's activity on a sponsored project and all direct charges and adjustments will be listed per account number. There will also be a space for contributed time which must be added by the PI/PD. The contributed time certified for each project will be verified by the Office of Grants and Contracts Administration. The reports are generated from payroll information and will differ occasionally from the statements of account provided by the Office of Accounting. This difference is generally due to the timing of corrections.
Responsibilities of Principal Investigators/Project Directors. Each PI/PD must verify that the report includes the names of all individuals who were paid from project funds; that the percent time listed on the report is accurate with variances during the month being reflected; and that the contributed time section is completed if the PI/PD or any staff spent time on the project while being paid from non-federal sources.
If, after reviewing the Personnel Effort Report, the PI/PD determines that corrections are needed to the actual payroll charges, these corrections must be made immediately and supported by retroactive appointment forms. The Personnel Appointment Form (PAF) should be sent to Human Resources. Copies should be attached to the Personnel Effort Report and returned to the Office of Grants and Contracts. Any salary transfers requested after the report has been certified will be returned unprocessed.
Equipment. According to University policies and procedures, equipment is defined as any item of nonexpendable property having a useful life of over one year and an acquisition cost of more than $5,000 per unit. All equipment purchases with sponsored program funds must be approved by Grants & Contracts Administration. All equipment requisitions are checked against the grant or contract for prior sponsor approval; money available on grant; money budgeted in equipment budget class; and title to property.
Travel. Anyone wishing to travel to a foreign country must complete the form "Request for Approval for Foreign Travel" available in the office of the Vice President for Business Affairs.
Foreign travel does not include travel to Canada, Puerto Rico, and the Virgin Islands. Any foreign travel associated with a sponsored program also requires the approval of Grants & Contracts Administration prior to being sent to the Provost's Office. The Provost will forward the form to the Vice President for Business Affairs for approval. Failure to secure proper prior approval will result in no travel reimbursement being made from a grant or contract or other Educational and General funds of the University.
Subcontracts. In certain instances, a principal investigator will secure funding from a sponsor but will be unable to carry out all work at his/her institution. In these cases, the principal investigator should ask for a subcontract to the primary contract. Subcontract information should be a part of the proposal process; therefore, notifying the potential sponsor of the intention of the principal investigator to subcontract part of the work.
Consultants. Since a consultant is someone who provides services for the project, prior sponsor approval is necessary, unless itemized in the proposal budget.
Incremental Funding. In some instances, projects are funded incrementally. This is particularly true with many federal agencies. For example, the University may receive a contract for $300,000 for a period of 3 years. The contract may contain a statement similar to the following:
The total amount of this grant is $300,000. The amount currently available for payment is $100,000, which amount covers the period 01 Jan 19x1 through 31 Dec 19x1. The government's obligation for the difference of $200,000 is contingent upon the availability of funds. Accordingly, no legal liability on the part of the government for payment of this difference shall exist unless and until funds are made available to the grantee by an amendment to the grant.
This type of statement limits the funding ($100,000) to be allowed for the first year. This amount is not to be exceeded without written approval of the sponsor. When the $100,000 is expended (for direct and indirect costs), the excess is at the risk of the department.
In order to identify projects which are incrementally funded, Grants & Contracts Administration will, issue a notification letter showing the total project award, with an appropriate statement as to the project cost and time limits, set up a budget for only the amount that has been incrementally funded, and enter only the incrementally funded amount into the DEFINE so that Grants & Contracts Administration reports show the currently funded amount.
As subsequent times and amounts are approved by the sponsoring agency, new notification letters, budget amendments, and DEFINE entries will be updated to show current funding amounts.
The amount over the incrementally funded limit will be treated as pending funds, and a letter with appropriate approvals will be required for spending to exceed the limit. This letter should state the costs will be covered by appropriate departmental funds should funding not be allowed by the sponsor.
Changes in Project Direction or Management
With certain grants and contracts, especially federal grants or contracts, prior sponsor approval is required for a change in objectives, scope, principal investigator, or project effort. This is necessary since the main objective of the research will be changed. OMB Circular A-110 describes those actions requiring prior approval:
Changes in Objective or Scope. Sponsor approval is usually required for all grants and contracts desiring a change in objective or scope. In all instances, federal projects require such approval. Examples, though not all inclusive, are a change in specific aim approved at time of the award; any change from approved use of animal or human subjects; shifting emphasis of research from one area to another; applying a new technology; transferring the performance of substantive work to a third party ( subcontractor ); a change in key personnel whose knowledge is critical to the research; and significant rebudgeting.
Changes in Principal Investigator. In many instances, a sponsor decides to award funds because of the expertise of the principal investigator. Therefore, a change in principal investigator becomes an important factor in deciding whether to continue funding the research if a change in principal investigator occurs.
Long-Term Absence of Principal Investigator. If the principal investigator is going to be away for more than three months, approval must be obtained from the sponsor at least 30 days before the beginning of the anticipated absence.
Change in Level of Effort. If there is a 25% reduction in time devoted to the Project by the approved PI/PD, sponsor approval is required. Grants & Contracts Administration should be contacted.
Substitution in Principal Investigator. If a principal investigator finds he/she is not able to fulfill the obligations of the award, the sponsor will need to be notified and negotiations made for a substitute principal investigator to continue the project or terminate it. Grants & Contract Administration staff should be notified, if this situation does occur.
Contracting or Transferring the Project Effort. No part of the research or effort may be transferred or subcontracted to another agency without prior sponsor approval. This includes the situation where a principal investigator may accept employment with another institution. Grants & Contracts Administration should be contacted, if this situation develops.
Additional Funds. The need for additional funds requires prior approval.
Transfer of Amounts Budgeted for Indirect Costs. Transfer of amounts budgeted for indirect costs to absorb increases in direct costs or vice versa, if approval is required by the federal awarding agency.
Transfer of Training Allowances. Transfer of funds allotted for training allowances to other categories of expense.
Cost and No-Cost Time Extensions. As soon as the principal investigator determines a project's performance will require additional time, with or without the need for additional funding, the PI/PD should contact the Office of Grants & Contracts Administration. Procedures for requesting no-cost extensions vary significantly between agencies.
Actions Requiring Formal Contract Modification. The actions detailed above will require sponsor approval and will result in formal modification of the sponsored program agreement. Modifications of sponsored program agreements are handled by the Office of Grants & Contracts Administration.
Many times a principal investigator will submit a budget to a potential sponsor that represents his/her best effort at the time; however, due to unforeseen circumstances, the budget will need to be revised. Some sponsors are quite liberal in allowing the principal investigator complete control over the budget, while others are very rigid, allowing no budget class changes without sponsor approval. Grants & Contracts Administration should be notified as soon as the principal investigator recognizes the need for such a change. In addition to sponsor requirements, a Transfer of Funds must be completed to enter the changes into the University accounting system.
Requests for major budget revisions (ten percent or more of a specific budget level in the absence of guidelines from the sponsor) should be processed through the prescribed review and approving authorities to the Office of Grants & Contracts Administration. If required, that office will forward the request to the sponsor for action. When approval or disapproval authority has been delegated to the University administration by the sponsoring agency, the Associate Vice President for Financial Affairs, or his designee, will act on the rebudget request.