Fiscal Officer Management of Grant/Contract
Establishing Grant/Contract Account Number
Personnel Compensation from Grant/Contract
Time and Effort Reporting, see Policies & Compliance
Travel Expense Vouchers
Travel Using Federal Funds
What are F&A costs?
Financial Accounting on Grants and Contracts
Cost Principles of Educational Institutions (OMB A-21)
Allowable and Unallowable Costs
Financial Reporting to Funding Agencies
The principal investigator/project director of a grant usually serves as fiscal officer of the project. The principal investigator/project director must be familiar with institutional procedures and the granting agency requirements applicable to the specific grant. Responsibility for the expenditure of grants and contract funds rests with the fiscal officer. Over or improper expenditures of funds could result in embarrassment to the fiscal officer and the University. The Office of Research and Projects Fiscal Management works closely with the principal investigator/project director regarding expenditure of grant or contract funds.
The Office of the Research and Projects arranges for a new account and assumes responsibility for the administration of sponsored grant funds and assists the principal investigator in assuring that grant funds are expended in accordance with State, Federal and other regulations. ORP reports on the financial status of the account to the funding agency and copies are forwarded to the principal investigator/project director.
The principal investigator/project director has primary responsibility for the performance of the research/project in accordance with the proposal submitted. Because all factors affecting the project cannot be anticipated, changes in project procedures or objectives may be necessary. The requirements for reporting or obtaining approval for changes are usually specified in grants, contract documents, or other administrative information provided by the sponsoring agencies. Requests for changes in either the proposed project or budget must be approved in advanced by the Office of Research and Projects.
Most funding agencies require the submission of regular narrative/performance reports in addition to the regular financial reports during and/or after the completion of a project. The principal investigator/project director has the responsibility of completing the narrative/performance reports and for filing them prior to the agency's deadline. A copy of each report must be sent to the Office of Research and Projects prior to its submission to the agency.
A grant/contract 6-ledger account is established when an award has been fully executed between the funding agency and the university. ORP will secure the appropriate 6-ledger account number from the Administrative Accounting Office and an AIS Request for Chart of Accounts/Accounting Flex field Values form will be generated and forwarded to the fiscal officer of the grant/contract account for signature. The dean and/or director of the fiscal officer’s unit must also sign the request form. A new fiscal officer will also be required to sign a Fiscal Officer Attestation Form. By signing the attestation form, the fiscal officer certifies that he/she will be responsible for fiscal and financial matters with regard to the account being established and any subsequent accounts that may be established under his/her name in the future. The fiscal officer is also assuring the university that he/she will comply with all policies, procedures and regulations of the university, State of Illinois and the funding agency. The required attestation form is to be signed and submitted once. The Forms are maintained on file by SIUE’s administrative financial units, and any subsequent new accounts established will only require that a Request for Chart of Accounts/Accounting Flex field Values be completed.
The signed Request for Chart of Accounts/Accounting Flex field Values should be returned to ORP. Approval signatures of the Director for ORP and the Provost/Vice Chancellor for Academic Affairs are also secured and the form is forwarded to Administrative Accounting for account establishment and activation.
From the date that ORP receives the signed request form back from the fiscal officer, it will normally take seven (7) to ten (10) working days for the account to be activated in the Financial Accounting System. You will not receive an official notice that the account is activated from either Administrative Accounting or ORP, but please feel free to call us if you need to check on the status of the activation of your account.
The grant/contract fiscal officer is responsible for hiring personnel for the funded project. The following University forms are utilized for personnel who are to receive compensation from a sponsored grant/contract:
If any personnel, other than student wages, are approved on a grant or contract, the following administrative procedures apply:
1. If a full-time employee of the University will be fully or partially assigned to the project, a Change of Assignment form must be completed.
2. If a new faculty, staff or civil service position is created, the proper hiring procedures and paperwork must be completed.
a. Professional personnel should be hired on a faculty/staff term appointment . Salaries to be paid from the grant/contract must be in line with current University Salary Schedules.
b. Secretarial and clerical personnel should be hired as Civil Service employees through the SIUE Office of Human Resources. Once informed about the specific help needed, the Office of Human Resources will send available applicants for interviews with the principal investigator/project director. When a suitable applicant has been found, the principal investigator/project director informs the human resources officer, who then completes the hiring procedure.
3. Graduate/Research Assistants. The qualifications for hiring and retaining graduate assistants should conform to the current requirements of the Graduate School. Conditions of appointments of students to assistantships in restricted (i.e., other than state appropriated accounts) accounts and in cooperative research units should conform to all other students in this category. Graduate students employed by non-state funds receive tuition waivers from the University. The papers for such appointments are first processed in the department and then routed through the offices of the appropriate academic dean, the Graduate School, the Office of Research and Projects, the Provost’s Office, and Human Resources.
4. Student Workers. All student workers must be hired through the Student Employment Office. Qualified applicants will be sent to the principal investigator/project director for interviews. When the desired student is found, the Student Employment Office must be notified and they will require the selected student worker to complete any necessary forms in the Student Employment Office. The completed forms are taken to the fiscal officer of the grant/project for signature and returned to the Student Employment Office for processing. The principal investigator/project director is responsible for insuring that timecards for students hired on their grant/contract are completed accurately and submitted on time every two weeks.
Upon completing any of the employment forms for faculty and professional staff hired or to be compensated by a grant or contract, the following is required:
The percentage (FTE) and dollar amount of compensation are recorded and should follow your approved budget outline. Faculty should seek assistance for facilitating this process from their school or college dean’s office.
These “employment” forms must be signed and dated by the employee and fiscal officer. The dean and/or department chair must also sign. The completed form(s) must be forwarded to the Office of Research & Projects with any accompanying documentation. The data is recorded by ORP and then forwarded to the Office of the Provost/Vice Chancellor for Academic Affairs for review and approval. The Office of the Provost/Vice Chancellor for Academic Affairs will then forward the information/paperwork to the personnel and payroll departments for further processing.
Federal grants and awards allow for a maximum of 100% effort. Therefore, if you are charging more than one federally sponsored grant (or any grant from which the sponsoring agency is utilizing federal funds) for one employee’s salary, the total percentage charged to all federal grants from which the individual is compensated cannot exceed 100%. This means that overload compensation cannot be charged to federally sponsored grants, contracts and subcontracts.
The Office of Human Resources payroll department will generate and forward to you payroll certifications on a monthly or semi-monthly basis. These reports reflect the payroll period, percent of compensation, total gross salary and applicable fringe benefits for each employee paid via the grant/contract and for which the grant/contract will be charged. These reports should be verified and signed by the fiscal officer and returned to the payroll department. Any discrepancies should be reported to the payroll department.
If there are any civil service employees who will receive compensation from a grant, the Change of Civil Service Status form must be utilized. The compensation to these employees who are paid hourly will be reflected on a Labor Distribution Report, which you will receive on a bi-weekly basis.
Please note that verification must be made that salary payments charged to grants/contracts are based on actual efforts. For hourly non-exempt/employees, actual effort is documented through use of time sheets and the Labor Distribution Report. For exempt employees, actual effort is documented through payroll certification reports.
Necessary forms and documents, such as federal and state tax withholding forms that are required for the Application for Appointment can be secured from the Office of Human Services.
Posting of Graduate Assistantships positions are handled through the Office of Graduate Studies and Research. Please contact Michelle Robinson at extension 2811 with any questions you may have.
All Sponsored Projects at educational institutions are subject to the “Cost Principles” established by the federal Office of Management and Budget in OMB Circular A-21 (Cost Principles for Educational Institutions). A significant part of OMB Circular A-21 deals with the reporting and documenting the time and effort devoted to sponsored projects (grants/contracts). The time you and your associates spend on grants or contracts, whether the sponsor pays for the time or the cost is shared by SIUE, must be documented.
The grant or contract for which you received an award, at least partially, was based on commitments made by you, your associates and co-investigators to spend specific amounts of time on the project. The government considers this commitment as a legal obligation. Failure to abide by this commitment or to not be able to document the committed effort could be viewed as a failure to perform under the terms and conditions of the agreement with the granting agency. If this should happen, auditors may choose to disallow salaries charged to the project or to declare the contract/grant void and seek recovery from SIUE.
When a budget is sent to a potential sponsoring agency as part of a proposal, the effort presented in the budget and the proposal narrative is established as a standard against which auditors’ measure performance, even if the sponsor awards less than what was requested. The initially proposed level of effort will bind the University unless the sponsoring agency is contacted and the level of effort identified in the budget is amended. This amendment must be in writing and part of the award notification documentation.
A systematic method has been developed to assist you in meeting university and federal requirements for processing timely commitments against and creating necessary documentation when using grant/contract funds.
The SIUE Office of Institutional Research disseminates on a quarterly basis; effort verification and effort distribution reports (Faculty, Professional Staff and Administrator Activity Report ). This allows the university to manage and document the effort charged to sponsored grants/contracts. It is important that these reports record and reflect time and effort devoted to sponsored grants/contracts. It is also important that these reports be regularly reviewed by the project director/fiscal officer of the grant/contract to ensure that all effort is being recorded and documented by the Office of Institutional Research. Additionally, exempt and non-exempt staff paid via sponsored grant/contract funds will receive Compensated Activity Reports along with a copy of the monthly and/or bi-monthly payroll certification with a special notation from the Office of Research and Projects Fiscal Management on a monthly basis. These reports have a statement that reads: I confirm that I have first hand knowledge of all the work performed by the above employee(s) and that the above distribution of activities represents a reasonable estimate of work performed for the period indicated. The signature of the supervisor, along with their title and the date is required. These reports are to be certified by the signature of the fiscal officer and by the employee(s) receiving compensation from the grant/contract and returned to ORP. You will also receive payroll certifications (for either bi-monthly or monthly payrolls) from the university’s Payroll Office. These certifications also require your review for accuracy and must be signed and returned to the Payroll department.
Please call the Office of Institutional Research with any questions you have regarding the Faculty, Professional Staff and Administrator Activity Reports at Campus Phone 3415. Any questions you have regarding the Compensated Activity reports can be directed to the Office of Research and Projects, Campus Phone 3162 or 5199.
Cost Sharing means that SIUE and/or a third party is contributing support to your project. Cost sharing is usually on grants and not on contracts. The Grant/Contract Acceptance Routing Form has two columns under the heading Proposed Budget. The first column records the sponsor (funding agency) share of the cost of the project. The second column records the SIUE share of the cost of the project. The Grant/Contract Acceptance Routing form also records the sources of the cost share dollars (School or Department) and cost share account number.
Cost Sharing has three categories as outlined by the following Office of Management and Budget Circular which govern regulatory compliance of grants and contracts at institutions of higher education:
Please note that the National Science Foundation has a mandatory cost share of at least 1% of the total direct costs of a grant. NSF may require greater cost share, but if not stipulated in the award document, an institution must match at least 1% of the total award amount. (See NSF Grant Policy Guidelines).
When a proposal is submitted to a funding agency and university cost sharing has been committed to the project, fiscal officers must be aware that the level of cost sharing committed in the proposal must be met at the time the grant has been awarded. Regardless of whether cost sharing is required/mandatory or voluntary, if the proposal that was awarded for funding reflects cost share in the budget, proposal narrative and proposal routing and award acceptance form, then the level of cost sharing must be met. There are various methods of cost sharing, these are:
E.g. Tuition Waivers
* Unrecovered F&A costs maybe utilized as cost share when the federally negotiated Facilities and Administration (indirect cost) rate is either not covered (paid) by the granting institution.
Under the Office of Management and Budget Circular A-21 and Cost Accounting Standards (CAS), any cost sharing is subject to audit and is reportable to the funding agency. Fiscal officers are required to provide certification of university cost share on your award acceptance routing form (page 2) the Office of Research and Projects. Each unit is assigned cost share account(s) where the cost share transactions are to be posted and these accounts are maintained by your school or unit business officer. Please call ORP for any specific information related to cost share on your grant.
The Cost Share column (SIUE) of the budget breakdown on your award acceptance routing form will identify and certify the source of funds, transaction dates, brief description, dollar amount, account name and account number actually charged for the cost sharing. The dean or department heads from which the cost share dollars are being derived must also sign the certification. Cost Share Certification forms may be obtained from ORP.
Cost sharing of time and effort must be recorded through quarterly activity reports submitted to the Office of Institutional Research (see Effort Reporting). Percentage of effort, grant account number and grant title must be recorded in the appropriate areas on the activity report.
Always maintain documentation of cost share. Documentation includes copies of payroll certifications and personnel activity reports; invoice vouchers and accompanying documentation; internal charge records (internal billing (service center) charges, p-card purchases, post office charges, etc.) Remember Cost Sharing is subject to audit. Auditors will ask for documentation so make sure you maintain adequate records and that you do prepare certifications.
Purchase of equipment and other current expenses (O.C.E.) are handled with purchase requisitions. The standard requisition is filled out by the principal investigator/project director and sent to the Office of Research and Projects, where it is reviewed and if approved, signed. It is then sent to the Purchasing Department, where a Purchase Order is prepared and sent to the vendor. On receipt of the item or service requested, an Invoice Voucher is prepared and submitted to Accounts Payable and payment is made from the proper grant/contract account.
Requisitions are also used to request payment over some length of time for contractual services. Such applications must be made in advance of such services and usually cover payments extended over several months or a year. Consultant’s services require a completed Consultant Agreement Form and a Independent Contractor Analysis Form to be attached to the requisition. Payment is ordinarily made on a regular basis (e.g. monthly, although payments need not be the same amount) upon receipt by Accounts Payable of an invoice from the vendor. Regular requisition forms are used in application, however, this type of requisition should clearly identify that the services are for a consultant, the period of performance: from_________to________, total payment amount not to exceed $_________. The source vendor should be listed on the form with their FEIN (federal employment identification number) or Social Security Number.
Confirming Requisitions are not allowable. Confirming requisitions are defined as payments after the fact, e.g. payments for services already rendered or for items already received. Only the Purchasing Officer and his/her assistants are authorized to commit the University for goods and services, when and as directed by their administrative supervisors. Commitments by any other member of faculty and staff are not legally binding on the University and may result in personal liability for the debt that is created.
All requisitions require that the grant account number and name be recorded in the appropriate fields provided. Only one source of supply may be used per requisition.
Based on the purchase requisition and issuance of a purchase order, payments for goods received and services rendered are made through the use of an invoice voucher. During the course of standard purchase this form is prepared by Accounts Payable. However, on various occasions the standard procedure can be bypassed and an invoice voucher can be typed for direct payment to the vendor.
Invoice vouchers and purchase requisitions must be forwarded to the ORP office. ORP reviews the vouchers and requisitions. Those requiring additional approvals will be forwarded to the appropriate office prior to being sent to purchasing and accounts payable for processing. Please make sure that all vouchers and requisitions clearly have the name and account number of the grant in the appropriate area and are signed and dated by the fiscal officer.
According to the Travel Regulations issued by the Accounts Payable Office, “Only those incurred expenses relative to the transaction of official University business will be reimbursed, subject to applicable statutes, regulations, specific terms or restrictions in relation to externally sponsored grants and contracts, availability of funds, reasonableness, and prudence. All travel of any individual subject to these travel regulations shall be authorized and approved by the appropriate administrative officer prior to the beginning of the travel.”
Preparation and Submission of the Travel Expense Voucher
Travel Expense Vouchers are to be used to request reimbursement for the following expenses related to travel:
-meals or per diem
-transportation and related costs
-lodging (if not directly billed to the University)
-registration fees less than $50.00 in amount
No requests for reimbursement should be made for expenses that are billed directly to the University. However, these items must be itemized on the Travel Expense Voucher and noted as “billed directly to the University – not included in amount to be reimbursed.” In all cases, receipts are required to be submitted with the voucher for any transportation, lodging, or miscellaneous expense that individually exceed $10.00. Additionally, in direct billing cases, copies of the billing must also be attached to the voucher.
If a registration fee is charged, a receipt or descriptive material with detail must be submitted highlighting what expenses are included. Meal expenses included in a registration fee will be deducted from the per diem allowance.
* The form(s) listed above are available through the AIS Electronic Forms.
Submission - The Travel Expense Voucher should be submitted within 10 days from the date of travel, or at the end of the month in which the travel occurred. All vouchers require Fiscal Officer signature and traveler signature before submitting the voucher to the Office of Research and for further processing. A case in which the Fiscal Officer is the traveler, additional departmental approval is needed before submission.
Once ORP receives the Travel Expense Voucher, the dollar amount requested along with the purpose of travel are compared to the terms of the grant or contract for allowability. As long as the travel is within the guidelines of the granting agency and budgeted dollars remain, ORP will sign the voucher for propriety approval and forward the voucher to Accounts Payable for disbursement.
To assure that federal funds are expended to the benefit of American companies, recipients and sub recipients of federal grants and contract must utilize U.S. flag carriers to transport personnel and property when these costs are directly charged to the grant or contract. This is inclusive of travel to, from, between or within a country other than the United States, even if the cost of a foreign flag carrier is less and/or more convenient. The exception to this rule is if a U.S. carrier does not serve the point of origin, interchange or destination. In such cases, a foreign flag carrier may be utilized only to the nearest interchange point on a usually traveled route to connect with a U.S. flag carrier and/or if a U.S. flag carrier involuntarily reroutes a traveler via a foreign flag carrier and there is no availability of a U.S. carrier. Other exceptions, in general, may include travel to and from the United States, travel between points outside the U.S. and short distance travel whereby travel hours would be extended anywhere from 3 to 24 hours and/or would eliminate two or more aircraft changes while en route. Additionally, first class air fare is unallowable.
Vouchers and requisitions sent directly to purchasing and accounts payable will be re-routed to ORP for approval and may delay the turnaround time for processing.
The term F&A is used to identify costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. F&A costs are synonymous with “indirect” costs and “overhead” costs. These are actual costs to the university and directly support research at SIUE. Facilities & Administrative Costs reimburse the University for the real costs associated with performing research that are not specifically allocable to a single project. Such costs include utilities, buildings and facilities costs, information technology infrastructure, department and central administrative costs associated with managing externally funded projects and libraries.
F&A Rates are developed under the requirements of the U.S. Office of Management and Budget Circular A-21, Cost Principles for Educational Institutions. The rates are calculated according to the F&A Cost Rate Agreement for SIUE and negotiated with our cognizant federal audit agency, the Department of Health and Human Services Division of Cost Allocation. The Office of Research and Projects is required to negotiate for the University with the U.S. Department of Health and Human Services a pre-determined rate for each fiscal year that is binding upon all other Federal agencies and is recognized by most other funding agencies. In general, full recovery of F&A costs is provided on all federally sponsored research grants. Public Service/Instructional and Training grants from other federal agencies may not allow full recovery and may be limited by a pre-determined rate based on total direct costs (TDC) or MTDC. Often times that rate is 8%.
The appropriate F&A cost rate are based on Modified Total Direct Costs (MTDC) which is the total direct cost less equipment over $5,000, patient care costs, participant support costs, alterations/renovations, rental of off-campus space and subcontract expenses in excess of $25,000, student stipends and tuition (if applicable).
The F&A rates allocable to each of the above activities are calculated by the development of “pools” of F&A costs (the numerator) and of allocation bases for each activity (the denominator). The pooled dollars are divided by their respective bases, resulting in the dollars allocable to that activity. The dollars are then divided by a “distribution base” from which a rate results. That rate represents the percentage which must be added to direct cost dollars to represent the “overhead” cost of the project or activity.
AIS (Administrative Information System) Reports
All financial reports for externally sponsored grant and contract accounts are produced via SIUE’s financial accounting system (AIS). These reports reflect the AIS ledger accounts that are identified as BP (Budget Purpose) numbers that start with the number 7 along with a string of other numbers that define the function and fund of the account. The report currently generated by AIS to fiscal officers is called the Funds Available Report which reflect your grant budget and expenditures charged on a monthly basis and also provides you with the budget balance for each expense category, i.e. salaries and wages, travel, equipment, commodities, etc. You will receive the AIS Funds Available Report, Detailed Report of Transactions, Encumbrance Reports and General Ledger Report on a monthly basis during the performance of your grant. These reports must be reviewed by the fiscal officer every month to insure that all transactions have been captured and that there are no errors in transactions posted to the account. Please see Fiscal Officer/Delegate Attestation Statement document.
All fiscal officers are required to take AIS training. Please contact Administrative Accounting to sign up for training if you are a new fiscal officer or you wish to take a refresher training on AIS.
AIS (Administrative Information System) Reports
FAS (Financial Accounting System) Reports
The implementation of AIS (Oracle Financials) has changed many of the business processes at SIUE. Currently all ledger accounts have been converted to the AIS system including Ledger 6 accounts (Grants and Contracts). These AIS ledger accounts use BP (Budget Purpose) numbers that start with the number 7 along with a string of other numbers that define the function and fund of the account. The report currently generated by AIS to fiscal officers is called the Funds Available Report. As fiscal officer of a grant, through the AIS system, you will be able to secure AIS Funds Available Report during the performance of your grant. When your new account is established you will receive a budget purpose number and a Ledger 6-account number. Ledger 6-account numbers can only be used for P-card transactions and payroll forms and transactions. Do not use the 6-ledger numbers assigned to your grant or contract for processing any and all of the following forms:
1. Invoice Vouchers
2. Travel Vouchers
3. Purchase Requisitions
Because of the AIS, the only form and process that has significantly changed for grants is the establishment of a new grant account. Once this form is generated and the Administrative Accounting office establishes the account, the BP number assigned will be reflected on the form. Your 6-ledger account number will be noted on the top right hand corner of the form. Please use and reference the 6-ledger account number for the processing of requests and any account inquiries related to payroll, internal billing charges and p-card charges/transactions.
A-21 Cost Principles for Educational Institutions
A-110 Uniform Administrative Requirements for Grants & Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations
A-133 Audits of States, Local Governments, and Non-Profit Organizations
Fiscal officers should be aware of treatment of costs as they apply to externally sponsored programs. The following information should be considered for all costs associated with the grant/contract.
This is a brief outline of basic consideration for the treatment of costs for grants and contracts as reflected in the Office of Management and Budget Circular A-21. Please be aware that external auditors closely follow the guidance of the OMB Circulars.
1. Basic Consideration (Section C)
A. Cost charged to external grants and contracts must be REASONABLE
1. The nature and the amount reflect the action that a prudent person would have taken under the circumstances prevailing at the time of the decision to incur the cost.
a. Is the cost generally recognized as necessary for the performance of the grant activities?
b. Was the individual acting with good intentions and judgement considering their responsibilities to the University, the State and Federal government, and public at large?
c. Were actions taken with respect to the incurrence of the cost consistent with established institutional policies applicable to the entire institution including sponsored agreements/grants/contracts?
B. Cost charged to external grants and contracts must be ALLOCABLE
1. A cost is allocable if it is incurred solely to advance the work under the sponsored agreement/grant/contract.
2. A cost is allocable if it benefits both the sponsored agreement/grant/contract and other work at the university provided that a reasonable allocation method is used. Exception Provision: If equipment is specifically authorized under a sponsored project, then the full amount is assignable to the sponsored project regardless of the use that may be subsequently made.
3. Any costs allocable to activities sponsored by Industry (private sector), foreign governments or other sponsors may not be shifted to federally sponsored agreements.
4. Any costs allocable to a particular sponsored project may not be shifted to other sponsored projects in order to meet deficiencies caused by overruns or other financial considerations, to avoid restrictions imposed by law or by terms of the sponsored project, or for other reasons of convenience.
C. Cost charged to external grants and contracts must be CONSISTENT
1. Like costs must be treated the same in like circumstances.
D. Cost charged to external grants and contracts may have LIMITATIONS ON ALLOWANCE OF COSTS
1. Sponsored projects are often subject to statutory ceilings on the allowance of costs. When expenditures exceed the limit, the excess may not be recoverable under other sponsored projects.
WHAT YOU CAN OR CANNOT CHARGE TO YOUR GRANT
Allowable costs are costs that are eligible for reimbursement by the sponsoring agency. Allowable costs also have to be permissible by the university and permitted by the terms and conditions of the sponsoring agency. Unallowable costs are those costs that are not eligible for reimbursement by the sponsoring agency.
Costs must meet certain criteria to be considered allowable for reimbursement by a sponsoring agency. The Office of Management and Budget Circular A-21 states that costs should be (1) Reasonable; (2) Allocable and (3) Consistently treated. The costs charged to a sponsored project must also be allowable by the university via its policies and administrative procedures and by the sponsoring agency.
The following is a list of direct costs and activities that are allowable for reimbursement for sponsored agreements.
The following is a list of activities and costs that are unallowable for reimbursement for sponsored agreements.
The nature and source of the award may stipulate other activities or costs that are unallowable.
POST AWARD REQUIREMENTS
During the performance of the sponsored project, it may be necessary to transfer costs to the grant from another source. Costs may be reassigned to a grant from another source if the transfer is to correct an error, the charge benefits more than one sponsored project and can be distributed based on the benefits received and, the sponsored project involved in the transfers are closely related.
Cost transfers are not permitted to reduce overruns from one sponsored project to another and cannot be made between unrelated grant/contract projects. Transfers cannot be made from restricted accounts with unexpended allocations to unrestricted accounts; and if the charges are unallowable by the terms and conditions of the receiving sponsored project. Most importantly, transfers are not allowable for mere convenience.
To request a transfer of costs, please notify ORP and we will forward you a Request for Transfer/Correction Form. Written justification and/or documentation supporting the transfer request should be attached to the form and returned to Research and Projects Fiscal Management. Transfers should be made in a timely manner following the original charge and will only be approved by ORP if they are processed within four months of the original posting charges.
Transfers that are unallowable and heavily scrutinized by auditors are:
Steps to prevent the need for cost transfers on grant accounts:
1. Spend the grant budget first.
If department funds are anticipated to cover a portion of the project (i.e. cost sharing), charge all expenditures to the grant account first. Use departmental funds only when the grant has been fully expended.
2. Directly charge all expenditures.
Any expenditure, which relates to the grant project, should be charged directly to the grant account. For example, OIT phone charges should be directly hitting the grant account instead of being transferred from a 4-ledger account.
Start accumulating project expenditures in a grant account as soon as possible. If expenditures are incurred prior to the award execution, ask for a pre-award account to be established.
Pre-award Costs are costs incurred prior to the start date of the grant/contract project as stated in the award notification. Pre-award costs must be “necessary and for the economical benefit” of the project. Pre-award costs must also be allowable under the terms and conditions of the award.
Pre-award costs may or may not be allowed on grants. Please refer to the “Special Terms and Conditions” in your grant application package, or give our office a call and we will look up the particular terms from your awarding agency. If there is no mention made in the terms and conditions for the grant, we will assume that prior agency approval will be required in order for pre-award costs to be allowable. Please be aware that all agency approval requests must be generated from the Office of Research and Projects. Should this action be required, please notify us and we will prepare the correspondence to the funding agency to seek this approval on your behalf.
Requesting a Pre-Award Account (Rush Procedure)
This step is advisable only if you have received written notification from the granting agency that your proposal has been awarded and/or you have received an award notification prior to the performance start date and the agency will allow pre-award costs. It will also be necessary for you to identify an unrestricted (4-ledger) account number to which costs can be transferred should, for some reason, the award not materialize.
TYPES OF PREAWARD COSTS AND PROCEDURES
Generally, if allowed, pre-award costs are expended within 90 (ninety) days prior to official award start date. These costs must be approved prior to actual spending. Pre-award costs must be documented in accordance with normal university policies.
a. When requesting a pre-award account number, please specify, in writing, that pre-award costs are expected to be incurred. Include approximate amount of expense, the cost categories (i.e. – supplies, equipment, etc.) and why pre-award costs are necessary for the project.
b. The Office of Research & Projects will review and notify the agency within 10 days of receipt of the request for pre-award cost approval.
Pre-award costs prior to 90 (ninety) days of the official award start date must be approved by the funding agency in writing prior to the incurrence of the costs. The Project Director/Principal Investigator should write a memorandum requesting approval to the Office of Research and Projects. The Office of Research and Projects will prepare a formal letter to the agency. We may require co-signature of the Project Director/Principal Investigator. The memorandum to ORP should include the following:
a. Approximate costs
b. Categories of costs
c. Earliest date of expected pre-award costs
d. Why pre-award costs are necessary (how they will benefit the project)
POTENTIAL IMPACT ON GRANTS
Pre-award costs may affect the begin and end date on grants from certain agencies. When pre-award costs are incurred, the new start date may become the date the earliest pre-award cost was incurred. When a project is less than 5 (years), there is no impact on the grant, however when the project is five years, the end date will be determined as five years after the earliest pre-award cost was incurred.
ORP prepares, monthly, quarterly and annual reporting on as required your grant and/or contract. When establishing the new account and setting up your grant records, ORP maintains a schedule on the due dates of your financial reports.
Copies of all financial reports submitted to funding agencies by ORP are copied to the fiscal officer of the grant.
NO COST TIME EXTENSION
Many funding agencies allow a one time extension of the expiration date of the award up to one year. A request for the extension should be submitted in writing to the Director of Research & Projects noting supporting reasons for the extension and revised expiration date. This one time extension may not be used if the following conditions exist:
a. To use unobligated balances remaining at the end of the grant period;
b. The terms and conditions of the award prohibit the extension;
c. The extension requires additional funds;
d. Extension involves any changes in the approved objectives of scope of the project.
TRANSACTIONS AND CONTROLS
When accepting an award from a granting agency, the university certifies the following:
Research and Projects Fiscal Management performs all requests for reimbursement from granting agencies. This is done either through invoicing agencies or performing letter of credit draw down procedures. ORP uses the expense data supplied through the university’s FAS (Financial Accounting System) AMO reports. Fiscal Officers on grants and contracts receive a copy of this report on their 6-ledger grant account every month.
In order for ORP to determine the allowability of costs charged against grant accounts, all invoice vouchers, purchase requisitions and employment assignments are first forwarded to our office for proprietary approval.
This assist us in determining allowable and unallowable costs prior to transactions entering the 6-ledger grant account. This also reduces the need for cost transfers.
Because propriety approvals cannot be performed on p-card purchases, it is incumbent upon the Fiscal Officer of the grant account to insure that purchases made with p-card are allowable and meet the criteria established under the grant award.
Should any unallowable cost enter the system and reimbursement is requested for those costs, we must refund the amount of unallowable expenses to the granting agency. We would also be required to pay interest on those funds to the granting agency. As soon as it is determined that an unallowable cost has been posted to the grant account, a transfer of those costs to an appropriate account should be made as soon as possible.
The Office of Management and Budget OMB Circular A-21 defines equipment as follows:
SIUE’s definition of equipment as of July 1, 1999
Effects of the A-21 threshold on grants awarded based on the university’s $500.00 equipment threshold:
Unless there is an equipment line and amount reflected in your awarded budget, equipment cannot be purchased under the grant without prior approval. Prior granting agency approval may be required for the purchase of equipment not in the approved budget. Allowances can be made for some items, with prior agency approval, because of the difference between the A-21 and university threshold for equipment. There are a few federal agencies that allow for the rebudgeting of other line items to the equipment line. Most state grants will not allow for the purchasing of equipment, unless it was initially proposed and appears in the approved budget. Please check with ORP if you require a modification and approval to your budget for the purchase of equipment.
If the purchase of equipment is allowable under your grant/contract, purchase the equipment at the beginning of your grant. Equipment purchases may be disallowed if purchased during the last few months of the grant period. Equipment purchased within the last 3-4 months of the grant period are considered questioned cost by auditors since equipment purchased with grant funds should be used or required for the performance of the activity conducted by the sponsored program.
SUBCONTRACTING VS. CONSULTING
The difference between a subcontractor and a consultant is outlined below. This outline should assist you in determining what vehicle to use to secure services under either of these categories.
SUBCONTRACT VS CONSULTING
WHEN TO USE
When an individual who is independent of the When an individual who is independent
University is performing a significant part of of the University is performing a small
the project or collaborating on the project. part of the project.
In many cases agency approval is required. In many cases agency approval is required.
Check the “Special Terms and Conditions” of The “Special Terms and Conditions” for the
the Grant or contact ORP for determination. Grant will indicate allowability or contact ORP for determination.
WHEN AGREEMENTS ARE INITIATED (AGREEMENTS APPROVED IN THE BUDGET)
When the proposal was originally submitted When the award has been received from
to the funding agency, any subcontractor or granting agency, please contact ORP for
individual who is to provide a substantial assistance in preparing and initiating
portion of the work on the project should have the appropriate documents to secure
been identified. A subcontract will be prepared services of the individual. Call Ryan Dodd
by ORP to the subcontractor and ORP will at ext. 5199.
negotiate the terms and conditions of the sub-
contract. Call Ryan Dodd for any subcontracting
actions at ext. 5199.
WHEN AGREEMENTS ARE INITIATED (AGREEMENTS NOT IN THE APPROVED BUDGET)
The principal investigator/project director The principal investigator/project director
should contact ORP to initiate the subcontract. can initiate a consulting agreement in cases
ORP will determine if agency approval is where agency approval is not necessary.
needed. All agreements should be reviewed and
approved by ORP and will be forward to
Office of the Provost for signature approval.
Based on the terms and conditions in the sub- Once the consultant agreement has been
contract, the subcontractor will submit invoices approved and signed . A purchase
either monthly or quarterly to ORP. requisition will be generated and
ORP will review the invoices and the consultant agreement will be attached.
forward to the project director for review If the consultant is to receive payment in a
and approval. An initial purchase requisition lump sum, an invoice voucher can be
will be generated for the full dollar amount. generated at the same time and attached to
Upon receipt of each invoice from the purchase requisition and consultant
subcontractor, the project director agreement. These documents should be
will prepare an invoice voucher, using the forwarded to ORP, who will then forward
purchase order number assigned by the to the appropriate departments
Purchasing Department. These documents should for processing and payment
be forwarded to ORP for propriety signature.
ORP will forward to the appropriate departments
for processing and payment.
1. Never have a consultant/independent contractor perform services prior to a consultant agreement being issued and approved.
2. If a significant or small portion of the work requires that specific expertise is to be provided by an outside consultant or agency, make sure to identify the individual/agency in your proposal by name. If not identified, the State of Illinois Procurement code will require that the work to be done will have to be subject to the bidding process and cannot be sole sourced.
3. All subcontract agreements must be prepared by the Office of Research and Projects.
Budget revisions or modifications may be either performed internally, approved by the Office of Research and Projects or externally, approved by the Granting Agency.
Some agencies are flexible about re-budgeting and some have limitations on the percentage of the budget that can be revised. Whenever you anticipate a deviation from your approved budget, please give ORP a call. We will check the regulations and assist you in preparing your budget revision. Do not overspend in categories without first securing approval on your budget revision.
Please Contact ORP For The Type of Approval Required For Your Specific Rebudgeting Request
Internal Budget Revisions
The project director/principal investigator submitting a memorandum or a budget revision form (if supplied by granting agency) to ORP generally requests internal budget revisions. The memorandum or form should reflect the date of the request, what budget lines require modification and justification for the budget revision. The budget revision request should be addressed to the Director of Research and Projects and forwarded to ORP (campus box 1007). The revision is reviewed by ORP for the accuracy of the budget changes and the reasonableness of the justification. ORP will cite, on the submitted revision request, the appropriate agency expanded authority regulations on rebudgeting actions. The revision is approved by signature of the Director of Research and Projects. The approved original will be returned to the project director/principal investigator. Copies of the approved revision will be maintained in the ORP grant folder of the project and updated in the University AIS system.
External Budget Revisions
An external budget revision is mailed to the granting agency for prior approval. The project director/principal investigator submitting a memorandum or a budget revision form (if supplied by granting agency) to ORP. The revision is reviewed by ORP for the accuracy of the budget changes and the reasonableness of the justification. A letter is prepared and sent via the Director of Research and Projects to the granting agency requesting the budget revision. Upon receipt of notification of the status of the request from the agency, ORP will forward such notification to the project director/principal investigator.
All budget revisions should include the following:
The budget categories that are affected should be listed with dollar amounts. The total amount of increases to budget categories must equal the total amount of decreases. Be aware that if the budget revision affects one of the following cost categories, then the indirect cost budget may need to be changed.
Salaries and wages*
Stipends (normally, this budget line cannot be revised on federal grants)
Tuition and Fees
Rent of Buildings
*Budget revision under the salaries and wages category are carefully scrutinized with regard to any decrease in the level of effort by the principal investigator/project director or any key personnel identified in the project who are receiving compensation through the grant.
A written justification is required explaining how and why the revision is needed. The justification should include:
a. Reasons for the additional expenditures in the cost categories that are being increased.
b. Reasons for the savings in the cost categories being decreased.
ALL BUDGET REVISIONS MUST BE APPROVED IN WRITING (whether by ORP of the sponsoring agency) PRIOR TO SPENDING