Section 7. Post-Award Administration

Acceptance of an Award and Budget Setup

The Research and Sponsored Programs (RSP) accepts awards for grants and contracts on behalf of the University. The grant notification or contract agreement is the official award document that sets post-award activity into motion. This process is generated by the Pre-Award section based on information contained in the grant or contract. Once an award is accepted, the grant notification, a copy of the approved budget, the grant proposal and UWF Internal Routing Form (IRF), Award Summary and Budget Form, and any other required documents are forwarded to Post-Award Administration and the Principal Investigator (PI).  Copies of the request are also forwarded to the director/chair and college/division budget manager for information.

Before funds can be obligated or expended, the Pre-award staff completes the Award Summary and Budget Form based on the approved budget for posting and review. The PI or a designated budget manager is expected to review this document and notify the appropriate grant specialist of any discrepancies. The purpose of this form is to "translate" the sponsor's budget into the University's budget format (refer to Section 3, Preparing a Proposal Budget for more information).

Administrative Responsibilities

Administration of the award is a team effort consisting of the PI and the designated departmental business manager, and RSP. The PI and the University jointly bear the responsibility for proper administration according to the policies/guidelines and procedures pertinent to the particular project. RSP assists in the clarification of regulations.

Responsibilities of the Principal Investigator

The PI is responsible for project implementation, assembling the necessary staff, expending the funds, and conducting the project as described in the proposal and agreed to by means of the award notification.

The PI must direct the work so that it will be completed within the budget period and with the funds authorized; otherwise, a request for supplemental funds or a no-cost time extension must be initiated. Although there is similarity among the regulations of major funding agencies, researchers are expected to familiarize themselves thoroughly with the regulations applicable to their specific project/agency.

The PI may authorize changes when they are in compliance with the agency's cost principles, as well as the State of Florida's fiscal regulations, and if the goods or services are directly related to the sponsored project. Salaries and wages may be authorized by the investigator only if they are in accordance with Circular A-21 Cost Principles for Educational Institutions.

Principal investigators have first line responsibility for managing expenditures within the fiscal regulations and amounts specified by the sponsor.  Post-Award is responsible for billing the sponsor. The principal investigator must carefully analyze the grant inception to date report (log on to ARGUS and through the ERP Channel, select Banner Reports, Sponsored Research) to see that all items presented are correctly and that appropriate funds (cash and budget authority) are available. The investigator also has the responsibility of initiating or coordinating appropriate adjustments as each situation dictates. It is suggested that this analysis take place no less than monthly in order to provide for timely action if needed.

The PI is responsible for any meals purchased in conjunction with a grant and must provide written documentation stating:

• the purpose,
• list of attendees, and
• authorized approval.

Responsibilities of Research & Sponsored Programs

RSP’s staff provides information on compliance with guidelines and policies for numerous funding agencies, including:

• Rules and regulations of corporate agreements
• Federal Acquisition Register (FAR) clauses
• Office of Management and Budget (OMB) circulars
• Federal Demonstration Partnership (FDP) and Expanded Authority

RSP’s staff assures that funding conforms to the terms and conditions of each specific contract or grant. This office provides assistance with compliance throughout the life of the project, including addressing questions on rebudgeting, no-cost extensions, carryover of funds, closeout requirements, etc.

Responsibilities of the University’s Research & Sponsored Programs (Post-Award)

The Post-Award Administration section of Research & Sponsored Programs utilizes the Banner Accounting System, which is a uniform accounting system that includes basic controls as well as accounting reports that assist faculty and their staff in managing grants and contracts. The University accounting system is under the jurisdiction of the Financial Services.

Questions or inquiries concerning accounting should be addressed to Research & Sponsored Programs Post-Award Administration. In general, Post-Award Administration may help with:

• Establishing accounts (grant/fund) and releasing initial budget amounts
• Budget transactions such as category conversions
• Cash management such as draw down on Letters of Credit
• Invoicing agencies to collect reimbursement of funds
• Submission of required financial reports
• Monitoring and advice on Circular A-21 Cost Principles for Educational Institutions.
• Approval of purchase requisitions, change orders, travel authorizations, etc.
• Approval of cost transfers for salary history before they are sent to Payroll
• Depositing checks
• Fiscal aspects of project closeout

Time and Effort Reporting

Under federal regulations, the University is obligated to provide detailed records of time and effort spent by faculty and staff on activities such as instruction, research, extension, public service, administration, and so forth.

Documentation of time and effort activity is required on all contracts and grants regardless of the source of funding and on all other activities that would have an impact on F&A costs. The University must be ready to provide sufficient detail concerning these activities to allow a reviewer to determine whether the work performed benefited sponsored projects. Faculty is reminded to take these reporting duties very seriously. Refer to Section 4 University Policy and Guidelines for more information.

Purpose and Importance

Salaries and wages charged to UWF accounts should be for work performed for UWF. The distribution of those UWF salary and wages in the accounting system should reasonably reflect an allocation of an employee's effort to each of UWF's various projects, programs, functions, and activities with which that employee is involved. This is important for purposes of compliance with federal costing regulations, as well as being relevant to other cost accounting and reporting requirements. The effort reporting guidelines set forth herein have been established to help you understand the importance of effort reporting at UWF and the specific procedures required to ensure the effort reporting system’s integrity.

Formal "effort reporting" is an essential part of the process required by the federal government's OMB Circular A-21 to ensure that salaries and wages charged directly and indirectly to sponsored programs are appropriately recorded. Effort reporting is done on an individual basis to document that the work was indeed performed by that individual, the time and effort reported is appropriate and reasonable, and that the distribution of dollars is representative of the work activities. At any time, a sponsoring agency may perform an audit to determine whether the effort certifications are accurate and complete. Adverse audit findings could have severe implications for UWF’s sponsored research programs and result in the University losing a valuable source of funds.

The OMB Circular A-21 regulations acknowledge that, in the use of any method for allocation of salaries and wages, instruction, research, services, and administration are often 'inextricably intermingled'. Therefore, 'a precise assessment of factors that contribute to costs is not always feasible, nor is it expected'. Institutions are therefore permitted to rely on 'estimates in which a degree of tolerance is appropriate'.

The effort of hourly-paid employees is accounted for and certified initially by means of biweekly timesheets and then confirmed via the Personnel Activity Reporting System (PARS) after-the-fact documentation. The effort of UWF salaried employees is accounted for under an after-the-fact activity records system that utilizes a combination of Action Sheets and semester effort reports each term (Personnel Activity Report System [PARS] in combination with Faculty Activity Report System [FARS] if applicable). A Personnel Action Sheet is submitted to distribute the salary dollars and related fringe benefit assessments in proportion to the individual's assigned UWF work activities. However, if at the end of the term the distribution of effort dollars recorded in the accounting system does not reasonably reflect, the actual percentage of UWF effort rendered, corrections to the dollar distribution must be made. This should be accomplished by submitting a revised Personnel Action Sheet to execute a salary history transfer for the period affected. As PARS reports are completed at least at the end of each term, this review should be performed no less frequently to insure that the payroll records and the PARS records accurately reflect the individual’s work effort.

Total UWF Effort

The federal government acknowledges that practices vary among institutions and within institutions as to the activity constituting a full workload. Accordingly, institutions are permitted to express effort in terms of a percentage distribution of total institutional activities.

UWF’s Effort Reports (PARS) are intended to report 100% of an individual’s University activity for which regular salary is paid. University activity includes teaching, research, public service, administration and other University-related activities. It also includes activities performed by UWF personnel related to contracts between UWF and other separate legal entities. When the individual has some portion of their salary generated through instructional (FTE) generated activity, a FARS report is completed to express the effort in contact hour equivalents. If an individual completes both a FARS and PARS report, they are to be completed concurrently and reconciled to ensure consistency. RSP’s staff offers periodic training to groups affected by this dual reporting and will provide individual assistance upon request.

Certifiable Activities

Only specific employee activities have to be certified on an effort report under OMB Circular A-21 regulations. Activities that are always certifiable are the direct activities of Research & Sponsored Programs, Sponsored Instruction, Other Sponsored Activities, and associated cost sharing. When an individual has a pay distribution during the semester from a UWF fund classified as one of these certifiable activities, then an PARS will be printed for that individual. The PARS will include 100% of the individual’s effort related to the base salary for which UWF compensates the individual. For example, an employee may be employed for .5 FTE or half time, but the .5 represents 100% of the individual's University related appointment.  Therefore 100% of the contracted effort is allocated to the salary source. 

Effort Report (PARS)

When an employee is paid directly out of a grant, his or her efforts should be represented in an PARS report. Individual Effort Reports are distributed by the departmental administrator to the individuals required to complete and certify the report. The PARS reports are to be returned within 60 days of the end of the semester.

Completing the Effort Report: The preprinted percentages on the PARS represent the percentages of the individual’s salary that have been charged to UWF accounts during the reporting period. The individual is required to record any difference in the “Actual % Effort” on the form which corresponds with the effort actually expended during the period for the Activity Department.

After completion, the Effort Report must then be certified with two required signatures. The employee’s signature is required in Section B, except for extenuating circumstances (separation from University, unavailable due to prolonged illness, travel, etc.). Any of these circumstances need to be documented on the form and signed by someone with first-hand knowledge of all the employee's activities such as PI or Department Head in Section C (Department Head approval line). The signature of the Principal Investigator is required in Section B to verify the employee's effort. If the PI is the employee, then one signature is sufficient. If there are changes in the percentage, a signature is required in Section C (Department Head approval line).

Other Effort Reporting Issues

Cost Sharing of Effort

Cost sharing of effort (both mandatory and voluntary) to sponsored activities must be reported through the effort reporting system by charging an appropriate cost sharing fund If the cost sharing fund has not been created, or is not already listed on the form, an appropriate notation should be made on the effort report. Cost Share effort must be entered in the appropriate section of the FARS with explanation, if applicable.

Changes In Effort

A Personnel Action Sheet should be submitted to officially change the payroll account distribution of an employee when that individual's effort changes. This will record the account distribution change on the Effort Report for future pay periods.

If an employee's change in effort is only temporary then it is not necessary to submit a personnel action sheet, unless it is to be charged to a grant fund.

Occasionally, corrections must be made to previously certified effort. When retroactive changes are made to a previously filed term effort report (FARS and/or PARS), each effort report must be re-certified and an explanation of why the error was made must be provided.

Individuals Subject to the Federal Executive Level Salary Cap

The legislative mandated provision on some federal programs (such as NIH) imposing a cap on reimbursement of salaries creates a special problem in completing effort reports at UWF for highly compensated faculty and staff. By law, these federal agencies may not reimburse salaries under awards at an annual rate that exceeds the cap. This requires UWF to create a special Effort Report for those individuals that are compensated from these awards. These Effort Reports have to reflect the NIH salary cap base in effect for each award. The difference in the amount charged to the UWF account and the federal salary cap base is considered cost sharing for UWF. Once the effort report is certified, entries will be made to record this cost sharing.

Subcontracts

Purpose:

The purpose of this document is to provide guidance to enable the University community to comply with OMB Circular A-133, specifically with respect to its regulations regarding oversight of sub-recipients on federally sponsored programs and to outline the procedures of RSP to accomplish this.

Requirements:

The University is responsible for ensuring that sub-recipients with Federal funding in excess of $300,000 ($500,000 for fiscal years ending after December 31, 2003) per year comply with OMB Circular A-133. (Subrecipient Monitoring Procedure and Subrecipient Certification)

Federal regulations that describe sub-recipient monitoring are general, but contain the following core elements of compliance:

• Advising sub-recipients of all applicable federal laws and regulations, and all appropriate flow-down provisions from the prime agreement
• The routine receipt and review of Technical Performance Reports
• The routine Review of Expenses-to-Budget
• The periodic performance of On-site Visits, or regular contact, if necessary
• The option to perform "audits" if necessary
• Review of A-133 audit reports filed by sub-recipients and any audit findings
• Review of corrective actions cited by sub-recipients in response to their audit findings
• Consideration of sanctions on sub-recipients in cases of continued inability or unwillingness to have required audits or to correct non-compliant actions.

The above list is not exhaustive of all compliance requirements. In addition to the general elements of compliance noted above, there may be additional sponsor- or program-specific requirements that mandate collecting and documenting other assurances (e.g. on lab animals, human subjects, biohazards, certified minority/ woman-owned/ small business purchasing requirements etc.) during the course of a project.

Work Flow:

1. Proposal Preparation/Award Acceptance/Contracting:

RSP Pre-award assists PI in preparation of sub-recipient budgets and scope of work in proposals and award documents and prepares/ coordinates execution of sub-award agreements. This phase is accomplished in close collaboration with PI and sponsoring agency personnel.  This includes some initial data gathering on the eligibility of the sub-recipient to receive federal funds.  A copy of the worksheet used for initial screening is available at insert link.

2. Award/Contract Accounting:

Upon completion of contracting process, award/contract from UWF to sub-recipient is transferred to Post-Award for functions related to establishing encumbrances, processing invoices, monitoring required financial reporting, and financial auditing responsibilities in conjunction with the PI(s).

3. Throughout Period Of Performance:

1. PIs monitor completion of deliverables, submission of invoices, approval of payments, and technical performance of all sub-recipients (see Subagreement Performance form).
2. PIs notify RSP of need to amend contract documents or to withhold or modify payment of invoices.
3. RSP Post-award annually reviews applicable OMB Circular A-133 audits.

4. At Close Out/Termination:

1. RSP Pre-award assists PIs in requesting any required reports such as invention disclosure, technical reports to incorporate in UWF reports to sponsor agency.
2. RSP Post-award assists PIs in compiling final financial related reports such as financial expenditure reports, inventory/property reports, and supporting documentation.

Responsibilities:

1. Principal Investigators (PIs) have primary responsibility for monitoring sub-recipients to ensure compliance with federal regulations and both prime and sub-recipient award terms and conditions.
2. Departmental Business Managers have responsibility for assisting PIs in discharging their monitoring responsibilities, for reviewing invoices from sub-recipients and questioning expenditures if necessary, and for maintaining documentation of monitoring efforts.

RSP has responsibility for ensuring that the University's sub-recipient monitoring procedures are compliant with federal and other applicable regulations and are consistent with sound business practices. RSP will provide further training, monitoring and guidance in interpreting applicable regulations and sub-recipient award terms and conditions, and in interpreting and executing these guidelines. Additionally, RSP will conduct website reviews of any sub-recipient published OMB Circular A-133 audits to ensure they are conducted and request copies whenever electronic version are not available as indicated in the contract document through the Federal Single Audit Clearinghouse Web site.

Summary:

In order to meet requirements for OMB Circular A-133 compliance, the University must meet the requirements specifically regarding sub-recipients’ performance and compliance under any prime awards or contracts for which it is the fiscal agent of record. To accomplish this requirement, the operating procedures above have been developed to provide an overview of the requirements, work flow, and responsibilities. RSP Pre- and Post-Award units assist and collaborate with the PI(s) to perform contracting and financial monitoring. The PI is the primary responsible party for ensuring that sponsored research funds (including sub-recipient payments and deliverables) are used as awarded from the sponsor and that costs incurred are “allowable, reasonable, and allocable” and that required reporting is accomplished as outlined in the prime award document.

For assistance, PIs are urged to contact the department’s business manager, chair/director, or RSP staff for specific requests or assistance.

Cost Sharing (Matching)

An award may require that the University share in the cost of a project. Cost sharing (matching) may be made from any non-federal source, including non-federal grants and contracts, if allowed by sponsor. The contribution may be in the form of direct or Facilities &Administration (formerly indirect) costs, but only cost items which are generally allowable may be included in the contribution. In order to identify specific cost elements that will be used to meet cost sharing commitments, Research & Sponsored Programs requires principal investigators to explain the details in a cost sharing letter or in the budget justification of the proposal. This justification is included in the Award Summary and Budget Form which is sent by RSP to the researcher after an award is received by RSP’s pre-award office. This cost share detail is completed as a portion of the Internal Routing Form (IRF) completed and signed by the PI, chair/director, and dean/vice president. The fully executed IRF must be returned to RSP to signify acceptance by the PI (and additional administrative officers) of this responsibility. No funds will be released until this form is received by RSP.

Contributions in the form of salaries or Other Personal Services (OPS) and their corresponding fringe benefits are documented via UWF’s PARS. Contributions of capital and expense items may be documented by submitting copies of the vendor's invoices for those items with a certification typed on the face of the invoice as follows: "This is certified as a cost sharing contribution to (project number)." Cost sharing documentation is subject to the same audit requirements as costs directly charged to the award.

At the end of each academic term, a cost sharing report that summarizes the cost sharing transactions from inception of the project up to the end of the academic term covered by the report. It is imperative that the investigator initiate the action required to meet the cost sharing requirement.

Federal Demonstration Partnership (FDP)

In 1986, the University of West Florida along with nine other Florida research universities and five major federal R&D agencies—National Institutes of Health (NIH), National Science Foundation (SF), Department of Energy (DoE), Department of Agriculture (DoA), and the Office of Naval Research (ONR)—joined forces to test and evaluate a grant mechanism utilizing a standardized and simplified set of terms and conditions. This first phase was called the Florida Demonstration Partnership (FDP).

FDP proved that the most appropriate decision making level is as close to the level of Principal Investigator as possible, while maintaining at the institutional and governmental level, adequate controls for the stewardship of federal funds. Universities and federal agencies demonstrated that by reducing the administrative burden of paperwork, researchers are able to spend more time in the laboratory and are more productive in their research.

In Phase III (since June 1996), FDP was renamed. It is now called the Federal Demonstration Partnership, and consists of 11 federal agencies, 65 universities and 5 professional organizations. While the FDP's current focus is on demonstrations that combine electronic research administration (ERA) with increased productivity, it continues to work on other methods which might further reduce the administrative burdens associated with federally sponsored grants.

The central features of the General Terms and Conditions are:

• the elimination of federal requirements for most prior approvals;
• simplification of administrative procedures;
• increased institutional accountability in research for pre-award and post award activities.

Prior Approval for Post-Award Changes

When researchers consider rebudgeting or other post-award changes and are uncertain about the allowability of such changes—particularly when such items are not mentioned in the agency or award regulations, cost principles or other policy documents—they are strongly encouraged to consult in advance with the designated Grants & Contracts Financial Manager and Grants Specialist in Research & Sponsored Programs. Some of the most common post-award changes that require agency prior approval are:

• Changes in the scope or objectives of the grant-supported activities.
• Significant change in responsibilities or replacement of the approved project director (PI), or other persons expressly identified as key personnel by the agency in the Notice of Grant Award, or by the Grantee in the application.
• Continuation of the project during any continuous period of more than 3 months without the active direction of an approved project director or PI.
• Undertaking any activities or expenditures disapproved or restricted as a condition of the award, including restrictions imposed by standard provisions such as cost principles.
• A request for additional federal funds, excluding those situations where the need for additional funding results from an increase in the base upon which indirect costs are calculated (due to otherwise allowable rebudgeting actions, such as rebudgeting into the personnel category whereby allocations of indirect costs increase).
• The transfer of amounts previously awarded for trainee costs (stipends, tuition, and fees) to other categories of expense. Rebudgeting within the category of trainee costs or into the trainee costs category is allowable without the awarding office's prior approval.

For more information, please contact the Associate Director at (850) 474-3040, or the appropriate fiscal office.

Rebudgeting

Any deviation from the sponsor-approved budget, which was the basis for the original budget release on an account, requires a Budget Amendment/Transfer Form (BT).

Budget Amendments

1. When a major budget change (as determine by the grantor) is necessary, a letter from the Director of Research & Sponsored Programs should go to the agency requesting necessary changes in the form of a contract or award amendment. The amendment will reflect the necessity of amendments or internal budget changes (projects under the FDP need only the approval of the Director provided no change is made to items shown in Prior Approval above). When an agency approval for an amendment is required, it usually takes the same period of time as request for a no-cost extension or program change. A 30-60 day period should be planned for the agency response PRIOR to executing the amendment in University accounting records or in committing or authorizing expenditure of funds.
2. When a contract or award allows for internal budget changes, a budget amendment/transfer form should be forwarded to RSP with the proper signatures and justification for transfer for approval and processing.

Deficits

Principal investigators have first line responsibility for managing expenditures within the fiscal regulations and amounts specified by the sponsor. If an over expenditure occurs in a grant account the principal investigator is responsible for covering the deficit from his or her seed account. In the event that the principle investigator is unable to cover the deficit, responsibility for correction then lies with the department or center and finally with the college or division.

If an error is made resulting in an audit disallowance, corrective action will be determined on a case by case basis by Research & Sponsored Programs with the help, knowledge, and assistance of the principal investigator.

Any error indicating over expenditure of funds, whether it be by audit disallowance or otherwise, will be met with current or future returned overhead funds or other unrestricted fund, PI’s are notified when refunds occur. Refunds to sponsors as a result of an error or audit disallowance is found, should be signed by the principal investigator like any other expenditure of funds.

Cost Transfers

Cost transfer is a process whereby expenditure for salary or OPS improperly assessed to a sponsored project account is transferred to the correct account. It is the responsibility of the principal investigator to make sure transfers are made promptly after the error is discovered, and within 120 days of the original charge unless close-out requirements necessitate a shorter period of time. Faculty should check with the designated budget manager or the college budget manager or should contact DSR's Post-Award staff.

Retroactive cost transfers represent one of the most common areas for audit disallowance. Federal regulations (OMB Circular A-21) define improper cost transfers as, "Any costs allocable to a particular research agreement under the standards provided in this circular may not be shifted to other research agreements in order to meet deficiencies caused by overruns or other fund considerations, to avoid restrictions imposed by law or by terms of the research agreement, or for other reasons of inconvenience." The cost transfers procedures are:

Grant Cost Transfers Procedure and Guidelines

Purpose

RSP has prepared these guidelines to communicate to principal investigators (PI) and other interested parties Research & Sponsored Programs procedure for cost transfers. The attached Cost Transfer Explanation and Justification Form for performing cost transfers will allow the University of West Florida (UWF) to comply with the standards set forth in OMB Circular A-21, Cost Principles for Educational Institutions, and 48 Code of Federal Regulations, Part 9905, Cost Accounting Standards for Educational Institutions. As a recipient of federal awards, UWF is obligated to comply with rules and regulations promulgated by various federal offices. These offices include sponsoring agencies such as the NIH and NSF and regulatory agencies such as OMB. The OMB has adopted regulations from the Cost Accounting Standards Board (CASB) and applies them to education institutions.

Cost transfers are an area of concern to federal auditors and negotiators; therefore, it is important that this procedure is understood and consistently followed.

Background

Recent Federal audit reports have demonstrated instances in which grantees have transferred costs from other projects or programs to Federal grants many months after the original charges had been recorded in the grantee’s accounting records. In many cases, the transfers were not supported by documentation which adequately explained why the transfers were made. The federal government recognizes that transfers of costs from one project to another are occasionally necessary to correct bookkeeping or clerical errors in the original charges. The federal government also recognizes that closely-related work may be supported by more than one funding source and that in such cases a transfer of costs from one funding source to another may be proper. However, frequent, tardy, and unexplained (or inadequately explained) transfers, particularly when they involve projects with significant cost overruns or unexpended fund balances, raise serious questions about the propriety of the transfers themselves as well as the overall reliability of the accounting system and internal controls.

Definition

A cost transfer is moving of costs from one accounting distribution (fund and/or organization) to another accounting distribution, funded by a federal, state, or local government or non-governmental organization, of a charge previously recorded elsewhere.

Normally, the account code would be the same on both the debit side and credit side of the entry.

Examples:

• Transfer costs from a departmental account
• Correction of a clerical error
• Reallocation of effort to reflect actual work performed
• Routine allocation of shared services
• Service center charges, etc.

Institutions receiving federal funds are potentially subject to audit disallowances without sufficient control and documentation of cost transfers. To minimize UWF's vulnerability in this area, this cost transfer procedure has been developed to provide guidance on the subject.

An important aspect of insuring compliance with these new regulations is careful definitions of the direct costing principle:

• Direct costs are those costs that can be identified specifically with a particular sponsored project or an instructional or other institutional activity, and that can be directly assigned to the activity relatively easily with a high degree of accuracy.

Cost Transfer Guidelines

In all cases, cost transfers must be made promptly. In this context, "promptly" means that the cost transfer should be made no later than 90 days of the original transaction. Requests for cost transfers to be processed between 91 and 120 days must be signed specifically by the principal investigator and must also be approved by the applicable department chair. If under some rare circumstances, it should be necessary to make a cost transfer beyond 120 days, then the applicable dean's signature will be required in addition to the signatures of the principal investigator, and department chair. Requests for late cost transfers should include an explanation of the extenuating circumstances which prevented the transaction from being made earlier. Signature requirements apply to both the debited department and the credited department.

The request for cost transfer must include specific line item identification of the original charge; justification of the appropriateness of the charge to the receiving account; and a full explanation of why the transfer is necessary. A copy of the original source document reflecting the original charge should be attached to the cost transfer request.

The department with which the grant receiving the charge is affiliated, is responsible for appropriately funding any cost transfers which are disallowed due to failure to meet the timing requirements stated above or if any cost transfers are later disallowed on audit. This reimbursement of the disallowed expenditures will be subject to the usual policy for overdrafts with recovery from (1) PI Seed, (2) Department / Center / Institute Seed, (3) Dean / Vice President Seed.

When the work supported by one sponsored project is determined to represent work closely related to that of another sponsored project, a cost transfer from one of the accounts to the other might be legitimately made with prior written approval from the sponsor receiving the charge. At a minimum, the following conditions must be met to justify a cost transfer on the grounds that the activity qualifies as "closely related work":

• The projects are scientifically and technically related.
• The projects are under the direction of the same principal investigator.
• There is no change in the scope of the sponsored projects involved.
• The relating of costs will not be detrimental to the conduct of work under each award.
• The relatedness will not be used to circumvent the terms and conditions of the awards.

However, under no circumstances can costs that directly benefit nonfederal projects be assigned or transferred to federal projects, whether or not interrelated, if the federal project does not also benefit directly from the expenditure.

Regulations

Federal regulations require that costs claimed on specific contracts and grants be allocable to the project being charged. Section C. 4. a. of OMB Circular A-21 states:

“A cost is allocable to a particular costs object (i.e., a specific function, project, research agreement, department, or the like) if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received or other equitable relationship….”

Section C.4. b. further states that:

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

The Public Health Services Grants Administration Manual provides further guidance regarding the issue of costs transfers. Chapter 6 of the Manual states that:

“….frequent, tardy, and unexplained (or inadequately explained) transfers, particularly where they involve projects with significant cost overruns or unexpended fund balances, raise serious questions as to the propriety of the transfers.”

“The transfers must be supported by documentation which contains a full explanation of how the error occurred and a certification of the correctness of the new charge. An explanation which merely states that the new transfer was made “to correct error” or “to transfer to correct project” is not sufficient ….”

To comply with the allowable and allocable cost requirements of OMB Circular A-21, it is necessary to explain and justify transfers of charges into federal awards from other federal or non-federal accounts. Timeliness and completeness of explanation of the transfer are important factors in supporting allowable and allocable costs in accordance with the principle of the Circular.

Goal

Any cost transfer should be so complete or detailed, that a person completely removed from the situation (an Auditor) will be able to look at the request five years from now and know what and why this entry was made.

Approval for cost transfers submitted more than 90 calendar days after the initial charge will only be granted in extenuating circumstances. They DO NOT include absences of PI or responsible administrator or shortage or lack of experience of staff. It is the responsibility of the grantee and the PI to ensure the availability of qualified staff to administer and exercise stewardship over federally funded projects in accordance with federal policies and regulations, including those relating to regular monitoring of expenditures and timely correction of errors and reallocation of expenses.

Requestors can avoid lateness by anticipating the possible need for additional clarification or documentation, and supplying the data promptly.

At no time should federally funded accounts be used as holding accounts for expenditures, which will subsequently be transferred elsewhere. This includes continuations of the same project for which the notice of award or the new fund number has not yet been received. The University of West Florida has a provision for allowing funds to be set up prior to receipt of those documents or for continued expenditures (under a different fund) provided there is a reasonable expectation of the funding allocation which may be temporarily authorized for this purpose (Refer to Section 4.  Institutional Expenditure Pre- and Post-Award Approval).

Roles and Responsibilities

It is the responsibility of each department to:

• Address the requirements of the federal regulations by fully describing the cost being transferred, the allocability of the charge to the project, the reason for the late request, and the integrity of the accounting process.
• Ensure compliance with UWF Research & Sponsored Programs' Cost Transfers Procedure.
• Prepare the appropriate request for transfer of expenses with justification and required supporting material.
• Retain hard copies of all related documentation in accordance with applicable record retention regulations.
• Ensure that all personnel engaged in the financial administration of federally funded awards are familiar with the UWF Research & Sponsored Programs' Cost Transfers Procedure.

Post-Award Accounting has review and approval responsibility for cost transfers and is available to assist in interpretation and implementation of the procedure. This includes review of explanations for transfers crossing the 90-day lateness threshold, and training in the application of the procedure.

One frequent mistake made when making cost transfers is to state that the transfer is necessary because the cost is budgeted on the project. This provides some support for the propriety of the transfer. However, the key is that the cost must be allocable to the new project—which means that the cost must have actually benefited the project. For example, a project may have budgeted for a researcher, but the researcher may not have worked on the project. In this case a transfer of the researcher’s salary is not allowed.

Reasons for Cost Transfers

• There was an error on the original time reporting document that was submitted to pay the employee.
• To correct bookkeeping errors or clerical errors in original charges.
• When closely related work is supported by more than one project agreement or funding source.
• To clear an overdraft.
• To transfer expense charged against an unrestricted fund source pending approval of a sponsored project.
• The PARS process has revealed discrepancies that must be corrected by processing a Payroll Action form. For example a PI denotes time on his PARS that should have been charged directly to a grant, but does not appear in the ledger.
• To redistribute high volume, low cost expenditures. Such as copier charges, postage, and SUNCOM charges.

Ways to Avoid Cost Transfers

The following measures are suggested for avoiding unnecessary cost transfers:

Plan ahead. Anticipate new projects and request a new fund in advance so that award related expenses are initially recorded against the correct account / fund. An Institutional Expenditure Pre- and Post-Award Approval form can also be used when you have been verbally notified that an award has been approved but the University has not received a final written notification—providing that the authorized signatures have adequate resources to fund any related disallowances. Once the Request for Authorization to Spend form is approved, a fund number will be assigned and made available for use. This allows charging the new fund immediately and eliminates the need to use another source and transfer the expense later. In effect, this allows the department to establish the fund on the general ledger before the projects begin date or before receiving final award notification. However, departmental approval is required to ensure alternative funding is available in the event the project is not awarded by the sponsor.

Develop adequate review procedures. Reduce processing errors by implementing internal review procedures to ensure that transaction source documents are properly authorized, completed and supported by adequate documentation. Two sets of eyes are often better than one. Also, monitor and reconcile ledgers promptly to control financial activity and avoid overdrafts.

Educate your staff and ensure that everyone understands your financial management control procedures.

Keep current with Federal, State, and University Procedures. (The Research Web site is an excellent tool for this.)

No-Cost Extensions

A no-cost extension occurs when a PI requires more time, but not additional funds, to complete a project. The purpose for the extension should be to benefit the successful completion of research goals.

Many FDP grants and Expanded Authority grants are allowed one no-cost extension of up to 12 months without having to obtain the sponsor's approval. However, a formal notification either through an electronic research administrative function or by a letter from the PI must be sent to and approved by RSP prior to submission to the sponsor. Upon approval, RSP will notify the sponsor of the execution of the option to extend the period of performance.

If the grant has already had one no-cost extension as an option or the grant is not under the FDP, requests for no-cost extensions beyond the end of the originally approved project period must be submitted to the sponsor in writing. Letters should be sent well in advance of the project ending date as some agencies require such requests be made 30 days prior to the project end date, therefore the internal notification of the anticipated extension is requested no less than 45 days prior to the performance end date. The request must be countersigned by RSP before being sent to the sponsor. The PI should justify the need for an extended period in scientific terms and should give an overview of the remaining budget categories as well as proposed use of funds in each category.  RSP provides notice of upcoming end dates 90 days prior to the end of a project.  Upon receipt, it is the responsibility of the PI to notify RSP of any required requests for modification.

Advance Budget Authorizations

There are two types of special advances available to investigators through RSP:

1. Pre-Award Costs:

Federal grants that will be awarded under the FDP or other Expanded Authority Terms and Conditions allow pre-award spending within the 90 day period immediately preceding the grant’s effective date. Federal grants with any period greater than 90-days would require the Federal agencies' prior approval.

To request RSP’s approval for pre-award spending, an Investigator must submit a completed Request for Authorization of Pre- or Post-Award Expenditures to RSP Pre-award staff.

The request for pre-award costs must include a narrative explaining why the grant needs to begin early, a pre-award budget, the pre-award start date, and a guarantee statement that the PI, department, center or college will cover all expended funds if for any reason the award is not made to the University or pre-authorized expenditures are disallowed. RSP Request Form must be signed by the Principal Investigator, Department Chair or Center Director, and College Dean if College funds are being used as the guarantee. The Provost has final approval for all temporary extensions.

Pre-award costs are only approved when it is made clear that pre-award spending is necessary for the effective and economical conduct of the project.

Request for pre-award cost should be made prior to the receipt of the grant; it is the exception to approve pre-award costs after the grant has been received.

2. Temporary Extension of Unexpended Funds or Additional Release of Funds by Agency:

Investigators often experience difficulties in starting or continuing personnel appointments when an award is assured or a funding release is anticipated but the arrival of the award documentation is delayed. RSP normally processes a Temporary Release for no more that 30 days at a time based on continued supporting documentation of anticipated award.

To request a Temporary Extension to an account, an Investigator completes the same Institutional Expenditure Pre- and Post-Award Approval to RSP Pre-award staff to RSP Pre-award staff. The request must include an anticipated effective start date of the renewal, and the amount of unexpended budget to be released or a request for additional funds in excess of the unexpended budget to cover the extension period and a guarantee statement that the PI, department, center or college will cover all expended funds if for any reason the award renewal or additional funds is not made to the University. The request must be signed by the Principal Investigator, Department Chair or Center Director, and College Dean or Division Vice President, if college/division funds are being used as the guarantee. The Provost will have final approval for all temporary extensions.

Investigators should include as an attachment to the request any relative correspondence they may have from the awarding agency indicating an award is going to be made to the University.

For additional information, refer to Section 6. Pre-award and Proposal/Award Processing.

Program Income

Program income is the gross income earned by the University that is directly generated by a supported activity or earned as a result of an award. Grantees are accountable for this type of income; the terms of the grant may specify how such income may be spent. In most cases, program income is maintained in an account separate from the funds already committed by the sponsor.

Examples of program income include:

• Fees earned from services performed under the grant, such as those resulting from laboratory drug testing;
• Rental or usage fees, such as those earned from fees charged for the use of computer equipment purchased with grant funds;
• Third party patient reimbursement for hospital or other medical services, such as insurance payments for patients, where such reimbursement occurs because of the grant-supported activity;
• Funds generated by the sale of commodities, such as tissue cultures, cell lines, or research animals; and
• Patent or copyright royalties.

Change of Principal Investigator or Co-Investigator

Awards are made to institutions, rather than to individuals. A PI may leave the University either permanently or for a sabbatical, but research under the grant or contract may continue to be conducted at the University of West Florida. If a department wishes to retain an award under new leadership, such change must be prepared for well in advance.

When there is a change of PI or Co-PI, the Department chair or institute/center director in conjunction with the original PI should notify the sponsor in writing of the upcoming change. The letter should explain the situation, introduce the new PI, highlight his or her special qualifications which assure continuance of the research as originally approved, and attach their curriculum vitae. A new IRF should be sent along with this letter to RSP. This document will be countersigned by RSP and forwarded to the agency. Depending on the project period and the date of proposed change of PI, the agency may issue a new award letter or merely confirm its agreement in writing. For additional information, refer to Section 6. Pre-award and Proposal/Award Processing.

Change of Grantee Institution

With the exception of training grants, researchers who decide to leave the University of West Florida may be allowed to transfer their research grant to their new institution. Faculty should notify the University RSP Pre-award staff of their relocation plans and request proper forms and instructions to affect the transfer. It is the option of the University to determine if a request to assign a new University PI will be submitted or if it is in the best interests of the University to support a transfer. The documentation to the agency must be routed through RSP for endorsement. Due to the wide variation in procedures among sponsors, faculty are encouraged to check with RSP Pre-award with regard to specific guidelines. For additional information, refer to Section 6. Pre-award and Proposal/Award Processing.

A faculty member who accepts an appointment with another university may wish to transfer research equipment purchased with sponsored project funds. (Note: Research equipment that was purchased with state funds may not be transferred.). A list should be prepared indicating the type of equipment, property identification number, date of purchase, acquisition cost, and account number to which it was charged. This list should be submitted to the University Property Services via RSP. Property Services will check the listing against its records, and if correct and approved by RSP, will process the transfer. Any questions will be settled by a phone call from RSP or Property Services to the researcher. Approval will be required by the department or center, University Property Services, and RSP.

Absence of the Principal Investigator

When a project will continue without any active direction from the principal investigator for more than 90 consecutive days, the sponsoring agency must be notified and give permission to change the PI. Please check with RSP Pre-award staff for individual agency regulations.

RSP Seed Accounts

Purpose

The Office of Research and Sponsored Programs sets up “seed” funds for new Principal Investigators when a grant/contract has been awarded. The purpose of these funds is to collect residuals from 1) terminated fixed price contracts and 2) annual F&A distributions with the intent that the PI will use to conduct further research. The monies in the funds are distributed as described in the Allocation of F&A Costs and Closeout Procedures.

New Fund Request

New seed funds are set up by Research and Sponsored Programs once a new PI receives notification that they have been awarded a grant/contract. A seed fund is totally separate from the grant/contract fund.

Use and Restrictions of Seed Funds:

Seed funds are to be used to support research or research-related activities that are allowed from University funds. The following is a list of the common uses for these funds:

1. Acquiring research program support supplies, equipment, or services which are normally allowed under the University’s procurement policies.
    
2. Support of travel related to research, scholarship, or professional development of individual and/or any assistants or students.
    
3. Professional licenses, certifications or memberships.
    
4. Employment of research support personnel such as OPS staff or students, consultants, or other professionals with special skills to assist in advancing research programs.
    
5. Scholarship/tuition reimbursement for graduate research assistants.
    
6. Buy-out of an individual’s normally assigned activities to pursue an approved research project by charging salary and fringe related to appointment for the equivalent percentage of faculty contact hours during either a regular or summer appointment period (Refer to Provost memo dated 2/4/91 available upon request from RSP.)

Seed funds MAY NOT be used for the following:

1. Overload or extra-state compensation payments.
    
2. A salary supplement or increase over the individual’s established University base rate.
    
3. Costs associated with credit instruction or administrative support.

For further reference, please check the Academic Affairs Faculty Handbook, Section 7.G.

Other Prohibited Expenditures

Any purchase or service on the State Bureau of Auditing Reference Guide for State Expenditures for which expenditures are prohibited from state funds such as 1) promotional gifts, 2) personal compensation items, 3) appliances, 4) commemorative plaques or items such as 5) flowers, 6) greeting cards, 7) decorative items, 8) food, 9) beverages, 10) meals other than authorized travel, and 11) entertainment or lobbying. See Procurement & Contracts Expenditure Restrictions and Guidelines for further guidance.

Carry Forward/Deficits/Termination

Procedurally, seed account funds are carried forward as long as the investigator is employed with the University of West Florida and these funds are intended to be used to support the investigator’s or department’s research related needs. Prior to any distribution or use of funds of an individual who has separated from the University, all outstanding obligations of the PI must be satisfied before further distribution. Upon termination or retirement, all the unexpended monies revert to the PI’s Department Seed Account.

If you have any questions or concerns, please contact the RSP office at 474-2824.