KSG/OSP Training and Information Session

1
KSG/OSP Training and Information Session

• May 17, 2007

2
Overview Agenda

• Welcome - Stew UretskyKennedy School Sponsored
  Programs Overview - Matt Alper
• University Office for Sponsored Programs
  Overview - Ethlyn OGarro
• Pre-Award Administration-Proposal review and
  submission - Charlene Arzigian
• - Jen Mahoney -Negotiatio
  ns - Sarah Holtz -- BREAK --   
  Post-Award Administration-A-21 Key
  Concepts, Effort Reporting, New Vacation Policy -
  Judy Ryan 
•     -Cost Transfers, Financial Reporting, Award
  Closeout - Ana GarciaWrap-up and Final
  Questions

3
Welcome Sponsored Programs Management
Strong communication and coordination between the
Research Centers and/or Departments, the Research
Administration Office (RAO), the Office of
Financial Services (OFS), and the Office for
Sponsored Programs (OSP) is essential.
Financial Reporting
Effort Reporting
Cost Transfers
Negotiations
OSP
RAO
RC/ Dept
Audits
Gift vs. Grant
Sponsored Payment
Award Close-Out
OFS
Proposal Development
Proposal Review Submission
4
About OFS Who We Are
Associate Executive Dean CFO Stewart Uretsky
Staff Assistant Marita Terefenko
Assistant Director of Finance Kelly Boyle
Assistant Director of Planning Systems Nancy
Guisinger
Associate Director for Financial
Operations Connie Mugnai
Financial Analyst Heather Fusco
Accounting Associate John Caetano
Faculty Awards
Accounting Associate Rashida Nisbett
Financial Analyst Jeff Hudson
Accounting Assistant Wanda Grady
IOP, WAPPP CPL
Accounting Assistant Edna Pierre
Financial Analyst Lorraine Kiley
Accounting Assistant Elaine Romano
OSP Liaison SPOC All other KSG Centers
5
About RAO Who We Are
6
KSG SPONSORED PROPOSALSFY 2002 FY 2006
OVERVIEW FY02 FY03 FY04 FY05 FY06
PIs 72 61 72 60 52
Prospectively Processed Proposals 101 50 108 63 106 65 74 62 68 58
Retrospectively Processed Proposals 103 50 63 37 57 35 45 38 49 42
TOTAL PROPOSALS 204 171 163 119 117
7
KSG SPONSORED PROPOSALS SUBMITTEDFY 2003 FY
2007 (Q1-Q3) OVERVIEW
BY CENTER FY03 FY04 FY05 FY06 FY07
Ash -- -- 3 3 4
BCSIA 12 13 13 18 20
Carr 1 2 4 3 1
CID 8 6 9 8 10
CPL 2 2 3 2 5
Executive Education 4 12 7 11 13
Hauser 9 10 8 5 1
M-RCBG 20 11 13 8 14
Shorenstein -- 1 3 3 1
Taubman 10 11 15 10 11
WAPPP -- 1 1 0 0
Wiener 20 20 16 24 13
Unaffiliated Other 14 11 5 5 7
TOTAL PROPOSALS 171 163 119 117 84
8
KSG SPONSORED PROPOSALSFY 2003 FY 2006 OVERVIEW
BY SPONSOR TYPE FY03 FY04 FY05 FY06
Federal 63 37 58 36 54 45 38 32
Non-Federal 108 63 105 64 65 55 79 68
TOTAL PROPOSALS 171 163 119 117
9
KSG SPONSORED PROPOSALSFY 2002 FY 2006
BY INDIRECT COST RATE FY02 FY03 FY04 FY05 FY06
lt20 48 36 39 36 50
20 20 29 32 24 24
26Federal Off-Campus 5 2 4 6 3
29 Federal Other Activity (Now 32) 2 3 4 7 2
63, 64, 66 Federal On-Campus 21 26 18 24 19
Other 4 3 3 3 2
TOTAL PROPOSALS 204 171 163 119 117
10
KSG SPONSORED PROPOSALSFY 2002 FY 2006
PROPOSALS OUTCOMES FY02 FY03 FY04 FY05 FY06
Funded Awards 114 97 78 74 72
New Proposals Submitted 158 123 126 98 96
Yield Rate 72 79 62 75 75
Yield Rate refers to new funded awards as a
percentage of all new proposals submitted in a
given fiscal year.
11
KSG TOTAL SPONSORED PROGRAM EXPENDITURESFY 2003
FY 2007 (Projected)
FY03 FY04 FY05 FY06 FY07 (Proj.)
Sponsored Program Expenditures (m) 28.4 -15 25.0 -12 24.9 0 26.1 5 26.4 1
Federal Sponsors 9.8 0 8.5 -13 10.4 22 11.8 13 9.0 -24
Non-Federal Sponsors 18.6 -21 16.5 -11 14.5 -12 14.4 -1 17.4 21
These data reflect only those proposals
submitted and awards accepted by OSP the percent
change from the prior fiscal year is indicated.
12

• Q Is this a Gift or is it a Sponsored
  Agreement?
• Gifts - administered via Harvard University
  Recording Secretarys Office (RSO)
• In general, a gift does not have terms that
  specify how the funding must be spent.
• The funding received may be utilized at the full
  discretion of the recipient.
• Unexpended funds not returned to the donor at
  the expiration of the gift period.
• Financial reporting, if any, is limited, and for
  donor stewardship purposes only.
• Sponsored Agreements (administered as grants,
  contracts, or cooperative agreements through OSP)
  - typically have one or more of the following
• Scholarly terms or Statement of Work to define
  line of scholarly/scientific inquiry.
• Formal deliverables such as annual progress
  reports or performance objectives.
• Specified terms regarding fiduciary
  responsibility or payment contingencies.
• Specified terms regarding disposition of
  property (including intellectual property)
  upon conclusion of the project.
• Proposal typically submitted in a
  sponsor-required format.

13
Q If this looks like a Gift, where do I turn for
help? A The KSG Gifts Policy Committee
(GPC)! Q Great! What the heck is that? The GPC
includes senior representatives of the KSG
Financial Services, External Affairs, and
Research Administration Offices. The GPC meets
regularly and advises the Dean, Academic Dean,
Executive Dean, Centers, and faculty on financial
and administrative matters related to selected
gift opportunities. The GPC is charged with
reviewing certain gift proposals and term sheets,
and advising the Dean and others on questions of
donor affiliation and stewardship, financial
analysis, connection to and consistency with the
KSG mission, and other risk management or
compliance-related concerns. Q Sounds great.
How do I find out more? A Glad you asked. For
more information, see http//www.ksg.harvard.edu/
research/gifts_policy.htm
14
About OSP Who We Are
VP for Finance Beth Mora
Director, OSP Bev Simmonds
Director, Cost Analysis and Compliance Judy Ryan
Business Process Training Specialist Amy
Maltzan/Victoria Wallace
Associate Director Ethlyn OGarro
Associate Director Judy McSweeney
Grants.Gov Business Process Manager Simone Alpen
Lifecycle Teams
Sponsored Programs Officer and Manager Cash
Management Diane Harwood
Sponsored Programs Officer and Manager FAS Life
Sciences Scott Blackwell
Sponsored Programs Officer and Manager FAS
Phys/Soc Sciences Helia Morris
Sponsored Programs Officer and Manager HMS Min
Xiao
Sponsored Programs Officer and Manager
SPH Roseann Luongo
Sponsored Programs Officer and Manager GSIA Jen
Mahoney
GC Officers Sr. Financial Analysts Sr. GC
Specialists GC Specialists Financial
Analysts Sponsored Programs Administrators Sponsor
ed Programs Coordinators
GC Officers Sr. Financial Analysts Sr. GC
Specialists GC Specialists Financial
Analysts Sponsored Programs Administrators Sponsor
ed Programs Coordinators
GC Officers Sr. Financial Analysts Sr. GC
Specialists GC Specialists Financial
Analysts Sponsored Programs Administrators Sponsor
ed Programs Coordinators
Sr. Financial Analysts Financial Analysts
Sr. Financial Analysts Financial Analysts
Financial Analysts
15
About OSP What We Do

• Support effective management of awards throughout
  their lifecycle
• Provide institutional signature on all
  University-area proposals
• Receive, review and negotiate awards
• Act as primary liaison with Sponsor, along with
  Principal Investigator (PI)
• Assist in interpretation of policies disseminate
  information on new policies
• Provide institutional signature on all sponsored
  financial reports for entire University

16
OSP GOALS/INITIATIVES

• Operations/Data Integrity
• Client Outreach
• On-line Trainings
• GMAS
• System of Record
• Electronic Action Memos

17
The Award Lifecycle and Related Policies
This diagram shows how the policies well discuss
in this session relate to the Award Lifecycle.
Submission Policy and Provosts Review Criteria
Financial Reporting Award Closeouts
Gifts vs. Grants
Effort Reporting Cost Transfers
Direct Charging (OMB A-21) UPAS
18
Submission Policy and Provosts Review Criteria
19
RAO Proposal Review Process

• The Deans Approval Form (DAF) is the internal
  Harvard document that must be attached to all
  proposals.
• The RAO reviews proposals for compliance with KSG
  and Harvard University policies and procedures.
  RAO obtains OFS approval of the budget and KSG
  approval of the proposal from the Academic Dean,
  via signatures on the DAF.
• A fully-signed DAF represents KSG approval of a
  proposal and is required in order for OSP to
  submit a proposal.

20
Elements of RAO Proposal Review

• Proposal conforms with KSG and Harvard policies,
  and all applicable sponsor guidelines.
• Budget is accurate, including salary, fringe
  benefit and overhead calculations.
• All requested costs are reasonable and allowable,
  particularly on federal proposals where not all
  usual direct costs are allowable under A-21
  regulations.
• Overhead less than 20 requires approval by the
  Academic Dean.

21
Elements of RAO Proposal Review

• If use of human subjects is involved, what is
  status of approval?
• Is cost-sharing involved, and if so, is a form
  required?
• If there is direct charging of administrative
  salaries to federal grants, is a checklist
  completed?
• Does proposal require approval of the KSG Faculty
  Committee on Projects and Proposals
  (FCOPP)?FCOPP is a senior faculty advisory
  committee to the Dean that assesses a subset of
  proposals for potential risks to the University,
  the School, and its faculty, staff and students.

22
Items Likely to Complicate Proposal Review

• Common Problems
• Last-minute proposals
• Lack of editing/proofreading by preparer
• Inattention to University and sponsor budget
  guidelines, requirements, and instructions
• Insufficient information provided to RAO/OSP,
  e.g., a copy of the program announcement or other
  instructions

23
Items Likely to Complicate Proposal Review

• Missing Items
• Subcontractor participation without documentation
• of institutional commitment
• Human subjects approval or exemption
• Conflict of Interest Form
• Approval of appropriate Dean(s) for faculty
  participation from other Harvard Schools

24
Items Likely to Complicate Proposal Review

• Budget Issues
• Overhead shortfall (lt20 ) issue not addressed
  and resolved
  
• Incorrect fringe benefit rates
• Salary and vacation fringe calculations
  incorrect
• Inconsistencies between budget and budget
  justification/lack of budget justification or
  detail.

25
Proposal Submission

• Proposals receive final review and are formally
  submitted by duly authorized representatives of
  Harvard in OSP.
• CAUTION! OSP is the only office authorized to
  submit proposals to external sponsors on behalf
  of the President and Fellows of Harvard College
  and its faculty members.
• A PI can submit a proposal (which should be
  labeled as preliminary) directly to a non-federal
  sponsor, but it will not be considered a formal
  Harvard University proposal until it has been
  submitted through the KSG Dean's Approval process
  to OSP.

26
Award Negotiation/Account Set Up

• If a proposal is funded, OSP negotiates the terms
  and conditions of the award with the sponsor.
  RAO serves as liaison between OSP and
  Center/Program and is kept up to date on status
  of negotiations.
• An Advance Account may be requested to set up an
  account string during award negotiation. This is
  done at the risk and request of the
  Center/Program.
• When negotiations are complete, OSP accepts the
  award on behalf of the University and sets up an
  account for the award.

27
OSP Staff

• Sponsored Programs Officer and Manager Jen
  Mahoney
• Grants and Contracts Officer Sarah Holtz
• Sr. Grants and Contracts Specialist
• - Debby Dunlap
• Sponsored Programs Administrator Wendy
  Cazavelan
• Financial Analysts
• - Leela Joseph
• - Ana Garcia

28
Submission Policy Timeline and Purpose
5/3 Day Memo from Steve Hyman and Beth Mora can
be found on the ERA website http//isites.harvard
.edu/fs/docs/icb.topic38276.files/5daymemo.pdf
Type of Proposal Submit to OSP
Non-Federal At least 3 business days prior to sponsor deadline
Federal At least 5 business days prior to sponsor deadline
Response to RFP Send the RFP (or URL of the applicable Web site) to OSP at least 5 business days prior to the deadline. This allows adequate time for review of Sponsors submission guidelines and terms and conditions. On occasion, additional time may be needed to resolve/negotiate any issues prior to proposal submission.
Local dept./school review time not
included Timely proposals assured priority over
late submissions which are reviewed after on
time submissions in order received.
29
Considerations in Proposal Review
Is it clear who is sponsoring the project?
Are the PI and other key personnel identified?
Is there a defined scope of work?
Does the budget make sense?
Are the correct current fringe rates included?
Is the appropriate overhead rate included?
Are the costs listed allowable?
Is there a justification of all costs?
Are the core principles of our academic freedom and other key university research policies maintained with the proposal/award?
Have the proper approvals been initiated?
Is there a deans approval form that the appropriate designated local official has signed off on?
Have approvals from all involved Tubs been included?
Could someone not familiar with the project pick up the proposal and know what it is fairly easily?
OSP will also review against sponsor guidelines
(e.g. font size, page limit, etc.) and advise PI
of any potentially problematic issues, but will
not edit or hold signatures based on such items
(PI decides if/how to address these).
30
Vice Provost for International Affairs Criteria

• Review Criteria
• - Proposed budget exceeds KSG threshold
• 1.1 Million
• - Proposed project supports the establishment of
  any new international site
• - Proposed project is deemed unusual, complex or
  high risk
• - The project includes travel to countries on
  the Dept. of State Warning List
• http//travel.state.gov/travel/cis_pa_tw
  /tw_1764.html

31
Provost Review Criteria
The presence of any of the following characteristics will require the proposal to be approved by the Provost before it is submitted to the sponsor (OSP coordinates)
Amount of request is 5M or more
Previous problems with sponsor
Degree to which the project deviates from Harvards existing mission of teaching, research, and service (i.e. clinical care vs. basic research clinical trials vs. basic research)
Amount of intl participation in project (particularly if there are foreign subcontractors)
Relationship of project to current world events (State Dept List)
Mechanics within the program announcement that may deviate from standard protocol (i.e. large federal project awarded in three weeks through an expedited review)
Anything about the project that would automatically trigger local or national news coverage (i.e. non- approved human embryonic stem cells, any project studying terrorism, etc.)
Any exceptions to current University research policy (i.e. publication restriction, clauses that threaten academic freedom or prohibit inclusion of foreign nationals)
Previous issues/problems with a previous segment of the award
Extent to which the project may create genuine health/safety risk to Harvard personnel
Project w/large number of subcontracts where vast majority of work is not being conducted by Harvard

32
OSP Review of Grant Award

• Before accepting an award on behalf of the
  University, OSP reviews all terms and conditions
  in an award
• Reviews terms with PI and Department
  Administrators
• Reviews terms for consistency with proposal
  submitted
• Budget
• Project Dates
• Deliverables

33
OSP Review of Grant Award

• Reviews terms for compliance with Universitys
  sponsored research policies, including
• Payment Terms
• Acceptance of Deliverables
• PI Independence
• Termination
• Audit
• Indemnification and Insurance
• Use of Harvards Name
• Intellectual Property
• http//www.fas.harvard.edu/research/greybook/pate
  nts.html
• Publication Restrictions
• Confidentiality
• Anti-terrorism Language
• Export Control

34
OSP Review of Grant Award

• Review of award terms may require input from
• Office of the Provost
• Office of the General Counsel
• Office of Technology Development
• Risk Management and Audit Services

35
OSP Review of Grant Award

• Examples of Recent Issues
• At Proposal Stage
• NSF/Department of Homeland Security Students
  Supported by Project must be U.S. Citizens or
  Permanent Residents
• At Award Stage
• USAID and MacArthur Foundation Compliance Plans
  for Checking Suspected Terrorist Lists
• USAID Requirement to have Policy Opposing
  Prostitution and Sex-Trafficking

36
Intermission
37

Incur Award Expenses
38
A-A-R-C Direct Cost Analysis
Allowability
Consistency
Conclusion
Reasonableness
Allocability
Does A-21 say this type of cost is allowable?
Does this item or activity specifically benefit
the project?
Would a prudent person have paid this price?
Has this cost been double-counted as both a
direct and indirect cost?
Is the cost allowable as a direct cost?
39
May the cost of this item or activity be treated
as a DIRECT cost? A-A-R-C Direct Cost Analysis
Allowability Does A-21 say this type of cost is
allowable?
Consistency Has this cost been double-counted as
both a direct and indirect cost?
Conclusion Is the cost allowable as a direct cost?
Reasonableness Would a prudent person have paid
this price?
Allocability Does this item or activity
specifically benefit the project?
Explicitly NOT Allowable (e.g., J3. Alcoholic
Beverages)
STOP
Reasonable Test Would a prudent person pay this
price for this item or activity for the
performance of the sponsored agreement? If YES
then the cost is Reasonable.
Consistency Test 1. Have you used different
practices for estimating costs in the proposal
budget and for accounting/billing/ reporting
costs? 2. Have you charged the same cost both
indirectly and directly when it is incurred for
the same purpose and circumstance? If NO to both
questions, then the cost passes the Consistency
Test.
The cost is allowable as a direct cost in the
measure to which it benefits the project
Allocability Test 1. Was the cost incurred
solely to advance the work under the sponsored
agreement? If YES, then the cost is allocable. 2.
Does the cost benefit the work under the
sponsored agreement and other projects as well?
If YES, then the cost must be allocated in the
measure to which it benefited the work under the
sponsored agreement and a written allocation plan
must be in place.
Allowable as Direct Cost (e.g., J31. Materials
Supplies)
NOT explicitly in A-21 (e.g., Specific Gizmos)
Different Purpose Circumstance Test 1. Is
this a non-federal grant? OR 2.a. Can the
cost be identified specifically with the
project? b. Is it required by the projects
scope? c. Is it a line item in the proposal
budget and included in the budget
justification? If YES to 1 or 2 ( all 3
questions), the cost is allowable and allocable
as a direct cost.
Normally allowable only as an indirect
cost (e.g., F6. Departmental Administration)
40
Federal and Non-Federal

• Both are audited and reviewed
• Multiple reviews last year agencies and
  foundations
• A-133 audit now includes non-federal awards
• Both rely on University systems such as payroll,
  effort reporting, equipment management
• Both will be considered as part of SAS 112
• Communicating Internal Control Related Matters
  Identified in an Audit

41
Florida International UnivEffort Certification
Direct Costs 11.5 million
Johns Hopkins Univ Effort Certification
2.7 million
University of MinnesotaMisuse federal funds
32 million
New York University Medical CenterInflated
research grant costs15.5 million
Univ California/San Francisco Animal Care
Allegations 92,500 fine
Univ of Southern California Questioned Costs
HHS/OIG Audit 400,000
Results of Non-Compliance Significant
Audits/Settlements
Mayo FoundationMischarging federal grants 6.5
million
East Carolina Univ Questioned Costs HHS/OIG
Audit 2.4 million
Cornell Medical Clinical Research Issues 4.4
million
Univ Alabama/BirminghamEffort Certification
Clinical Research Billing 3.4 million
Harvard/BIDMC Costing Issues
Self-Reported 3.25 million
Northwestern University Committed Time/Effort 5
million
42

Sub-recipient Monitoring

• A-133 D400d(3). Monitor the activities of
  sub-recipients as necessary to ensure that
  Federal awards are used for the authorized
  purposes in compliance with laws, regulations,
  and the provisions of the contracts or grant
  agreements and that performance goals are
  achieved.

43
Sub-recipient Monitoring

• As prime grantee, KSG and PI are responsible for
  entire award
• PI monitors programmatic performance
• PI approves invoices and certifies performance
  and appropriateness of charges
• Grantee could be liable for disallowed costs of
  subcontractor

44
Effort Reporting Policy

• Effort the amount of time spent on a particular
  award, expressed as a of the total amount of
  time spent on work related activities (teaching,
  research, service) for which the University
  compensates an individual.
• Effort reporting is a federal requirement
• (A-21 Sec. J.10.c)
• Effort Reporting is a process mandated by the
  Federal government to verify that direct labor
  charges to Federally sponsored projects are
  reasonable and reflect actual work performed
• Faculty and staff salaries charged to sponsored
  research projects should be commensurate with the
  direct effort provided to the project
• As a requirement of receiving federal funding,
  institutions must maintain an accurate system for
  reporting the percentage of time (i.e., effort)
  that employees devote to federally sponsored
  projects

45
Effort Reporting Here at Harvard

• In Harvard's decentralized environment, effort
  reporting and salary certification methods are
  accomplished in different ways by the Schools.
• KSG Monthly Salary Certification for Research
  Staff
• http//www.ksg.harvard.edu/ofs/policies_procedures
  /research.htm

46
Cost Transfers
47
Cost Transfers Policy Overview

• Cost Transfer Policy can be found in the Policies
  section of the OSP website
• http//vpf-web.harvard.edu/osr/managing/man_cos_tr
  ansfer.shtml
• Definition A cost transfer is a transfer to a
  federally funded sponsored account of a charge
  previously recorded elsewhere.

48
Cost Transfers Purpose of Policy

• Federal regulations require that transfers to
  federally funded sponsored accounts be timely and
  properly documented (see OMB Circular A21 section
  C 4 (b))
• To demonstrate that adequate financial controls
  are in place, cost transfers should be kept to a
  reasonable minimum
• Late, frequent, and inadequately explained cost
  transfers
• Suggest poor financial management
• Lead to questions on the overall reliability of
  KSGs internal controls and accounting systems
• Cause audit issues
• Monthly monitoring of accounts using the Period
  Expense Report and Detail Listing is encouraged
  to identify incorrectly allocated expenses

49
Cost Transfers Policy Overview

• The policy addresses ALL debit transfers to
  Federal Awards that were previously recorded
  elsewhere
• Cost transfers are identified by a journal naming
  convention, the journal name starts with CT
• Example CT STA Allocate glass washing OCT-04
• The description field of a CT journal indicates
  that a CT form has been processed or the reason
  why a CT form is not required is identified
• Different procedures are followed for cost
  transfers made under 90 days and over 90 days
  from the 15th of the month following that in
  which the original charge was recorded
• There are also special categories of cost
  transfers that require only a journal entry see
  the Cost Transfer policy for more information on
  these
• Situations that DO NOT allow for Cost Transfers
• Zeroing Out accounts
• Solve funding problems
• Meet deficiencies caused by cost overruns
• Balancing the budget
• Shifting costs to avoid budget restrictions

50
Cost Transfers Under 90 Days

• Example
• Original charge posted September 4th
• 90 days counted from October 15th
• Cost Transfer should be transacted on or before
  January 12th
• Cost transfers made within 90 days of the 15th of
  the month following that in which the original
  charge was recorded
• Transferred by journal entry at departmental
  level
• Accompanied by the Cost Transfer Explanation Form
  with questions 1 and 2 answered and signed as
  indicated
• Journal description See related Cost Transfer
  form
• Documentation sent to OSP for review and approval
  
• Returned to originator for posting to GL and
  retention with other accounting records

51
CT Explanation and Justification Form

• Valid explanations should include
• Question 1
• Description of expense being transferred (include
  why and when original charge occurred)
• Why the expense was originally charged
  incorrectly
• Question 2
• Why expense(s) is allowable on the receiving
  account (direct benefit to the receiving account)
• Would an outside auditor reviewing the Cost
  Transfer Explanation Justification Form 3 years
  from now understand the cost transfer ?

52
Cost Transfers Over 90 Days

• Cost transfers made more than 90 days after the
  15th of the month following that in which the
  original charge was recorded
• ONLY GRANTED IN EXTENUATING CIRCUMSTANCES
• NOT EXTENUATING CIRCUMSTANCES
• Absence of
• Principal Investigator
• Responsible administrator
• Shortage of staff
• Lack of experience of staff
• EXTENUATING CIRCUMSTANCES
• Late issuance of an Action Memo (45 day limit!)
• Late issuance of a notice of grant award
• Failure of another department to take action
• NOTE ALL CT FORMS REQUIRE SUPPORTING
  DOCUMENTATION

53
Cost Transfers Over 90 Days

• Cost transfers made after 90 days of the 15th of
  the month following that in which the original
  charge was recorded
• Transferred by journal entry at departmental
  level
• Accompanied by the Cost Transfer Explanation Form
  with questions 1 - 4 answered and signed as
  indicated
• Journal description See related Cost Transfer
  form
• Documentation sent to OFS for review and approval
  
• Forwarded by OFS to OSP for signature
• Returned by OSP to originator for posting to GL
  and retention with other accounting records

54
Cost Transfers Roles Responsibilities

• Center/Department
• Ensure compliance with the University Cost
  Transfer Policy
• Complete/enter draft cost transfer journals
• Complete cost transfer package and forward to OSP
  (under 90 days) or OFS ( over 90 days)
• Retain hard copies of all related documentation
  in accordance with applicable record retention
  regulations
• Ensure that all personnel engaged in financial
  administration of federally funded accounts are
  familiar with the University Cost Transfer Policy
• OFS
• Review cost transfers over 90 days to ensure
  compliance with University Cost Transfer Policy
• Provide required Financial Dean signature, if all
  criteria are met
• Forward signed form to OSP, retain copy of cost
  transfer documentation in appropriate fund file
• If necessary, upload journal entry when cost
  transfer is approved
• OSP
• Be available to assist in interpretation and
  implementation of the University Cost Transfer
  Policy
• Train in the application of the Cost Transfer
  Policy
• Review cost transfers
• Approve cost transfers

55
Financial Reporting
56
Sponsored Financial Reporting Policies

• The University Policy and Procedures for
  Sponsored Financial Reporting can be found at
• http//vpf-web.harvard.edu/osr/managing/man_fin_re
  porting.shtml
• Policy Objectives
• Clarify reporting roles and responsibilities
• Identify which expenses will be included on
  financial reports
• Reduce number of unreconciled accounts and
  revised Financial Reports
• Develop consistent reporting practices across
  departments

57
OSP Responsibilities in Financial Reporting

• Each month, the OSP Financial Analysts run the
  Scheduled Reports in CREW identifying which
  financial reports and invoices are due within
  next 30-90 days
• Review and prioritize outstanding financial
  reports list and communicate with departments for
  upcoming reporting deadlines, including annual
  reports or final invoices for the budget periods
  
• Draft periodic invoices or reports and submit
  directly to sponsors
• Draft final Financial Status Reports (FSRs) or
  final invoices based on latest PER figures and
  send to department for review
• Work with department to resolve various issues
  and prepare necessary adjustments ( remove
  unallowable transactions, over spent or under
  spent, carry forward, overhead etc. )
• Submit FSR to sponsor before deadline

58
Center/Program Responsibilities in Financial
Reporting

• Each month, the departmental administrators
  should run the Segments report in CREW
  identifying those awards with anticipated end
  dates within next 120 days
• Ensure all outstanding expenses have posted (e.g.
  web vouchers from affiliates, salaries,
  subcontract final invoices etc.)
• Review expenses for cost compliance - remove any
  unallowable/non-allocable charges (contact OSP
  for cost transfer issues)
• Remove any over-expenditures and reconcile to
  budget
• Review and approve draft FSR (5 business days)

59
Federal and Non-Federal Reporting

• Types of Federal Reports
• SF 269 Financial Status Report (FSR)
• SF 272 Federal Cash Transactions Report
• SF 270 Request for Reimbursement
• SF 1034/1035 Voucher for Reimbursement
• NIH typically requires SF 269
• Non-federal reporting requirements vary by
  sponsor, as a result the reporting
  format/template may differ

60
Reporting Roles Responsibilities
Roles Responsibilities Final Non-Reportable Final Reportable Final Reportable
OSP O Center/Dept D Reviews Invoices Reports
Account Reconciliation D D D
Review of Expenditures O/D O/D O/D
Alert Dept. of Post-Award Issues O O O
Respond to/Rectify Post-Award Issues D D D
Confirm Final Figures D D D
Prepare FSR O O O
Send FSR draft to Department N/A O O
Approve report/invoice N/A D D
Submit FSR to sponsor N/A O O
Dept responsible for final reconciliation
61
Award Closeouts
62
Closeout of Sponsored Accounts

• Information can be found on the OSP website
• http//vpf-web.harvard.edu/osr/closing/clos_how_aw
  ard.shtml
• Prudent financial management of sponsored
  accounts includes timely and accurate reporting
  and account/award close out. These functions are
  tested as part of the annual OMB A-133 audit as
  well as by other sponsoring agencies when they
  make periodic visits to Harvard.
• Approximately 60 days prior to the expiration of
  the project account, the OSP Financial Analyst
  will contact the local unit regarding the status
  of the account. The administrator should ensure
  that all project costs are appropriately charged
  to the account. As the project nears termination
  it is important to review all costs and clear
  those which are unallowable or inappropriate to
  this account.

63
Considerations w/Account Closeout and Disabling

• GMAS monthly automatic disabling process
• Activity-Subactivity Disabling GL expenses GL
  income Final Figure
• Segments Close-out in GMAS (manually)
• Funds Disabling automatically
• If problems arise, OSP team member will work with
  department administrators to resolve issues

64
Potential Problems with Disabling

• Expenses posted in the current month
• Invalid code combinations
• Charges to non-sponsored funds and sponsored
  activity/subactivity
• Cost sharing
• Work study
• Travel advances

65
Thank you for attending. Questions?
66
Additional Materials
67
OMB A-21 Key Concepts

• Chief Aim to have the federal government pay its
  fair share of the costs of research conducted
  at the University.
• Means for achieving this aim principles for
  determining the costs applicable to research and
  development, training, and other sponsored work
  performed by universities under sponsored
  agreements (grants, contracts, and other
  agreements) with the Federal Government.

68
ALLOWABLE Costs
OMB A-21 Key Concepts

• They must be reasonable
• They must be allocable to sponsored agreements
  under the principles of A-21
• They must be given consistent treatment through
  application of those generally accepted
  accounting principles appropriate to the
  circumstance
• They must conform to any limitations or
  exclusions set forth in A-21 or in the sponsored
  agreement

69
ALLOCABLE Costs
OMB A-21 Key Concepts

• A cost is allocable to a particular cost
  objective if the goods or services involved are
  chargeable or assignable to such cost objective
  in accordance with relative benefits received.

70
REASONABLE Costs
OMB A-21 Key Concepts

• A cost that a prudent person would have incurred
  under the circumstances prevailing when the
  purchase was made.

71
CONSISTENCY
OMB A-21 Key Concepts

• An institution must use the same practices for
  estimating costs in budgeting a proposal and for
  accumulating and reporting costs.
• Each type of cost may be allocated only once and
  on only one basis to any sponsored agreement or
  cost objective.

OMB A-21 Appendix A - Cost Accounting Standards
9905.501 and 502
72
Case 1 Administrative salaries
Case 1
The Facts Professor Academia is writing a
proposal to the NIH for an Obesity Project
involving human subjects. Shed like to have an
administrator to provide support for the Obesity
Project. Here are the tasks shes thinking of
assigning to the new hire
73
Proposed Obesity Project administrator tasks
(abbreviated)
Case 1

• Proposal preparation
• Coordinating human subjects
• Project Survey preparation (administrative)
• Arranging travel to a conference on obesity
• Course and committee materials
• Food for weekly lab meeting
• Filing/keeping desk in order
• Administering a journal
• Work related to Education and Obesity

74
The Issue
Case 1

• May Professor Academia put some or all of the
  admins compensation on the proposed Obesity
  Project budget?
• In other words
• Which of the listed tasks would constitute
  allowable effort on the Obesity Project?

75
ALLOWABILITY Summary of Conclusions
Case 1
Compensation Effort for Yes or No?
Proposal preparation NO
Coordinating Human Subjects YES
Survey preparation YES
Arranging travel to a conference on obesity YES
Course and committee materials NO
Food for weekly lab meeting NO
Filing/keeping desk in order NO
Administering a journal NO
Work related to Education and Obesity NO, but perhaps allocable to EO Project
76
CONCLUSION
Case 1

• Salary and fringe equal to the proportion of an
  administrators time spent finding and
  coordinating human subjects, preparing the
  survey, and arranging travel to the obesity
  conference may be charged to the grant (i.e.,
  theyre ALLOWABLE), provided that
• The proportion is at least 25 of an FTE and,
• The salary and fringe are a specific line item in
  the proposal budget and discussed in the budget
  justification.

77
But what do I do with the rest of the
administrators salary and fringe?
Case 1

• Determine whether his or her effort spent on
  other projects passes the A-A-R-C analysis (i.e,
  it is allowable as a direct expense on another
  grant.)
• Charge remaining amounts to the appropriate
  departmental account.

78
Case 2 Computers and Communications
Case 2

• The Facts
• Professor Moose just received funding from the
  USAID to do field work in a Distant Land on the
  Far Away Project. He and his research staff will
  be collecting data at the Project site and
  analyzing it there and here in Cambridge.
  Professor Moose often uses his cell phone to stay
  in contact with his research staff in the field
  and with collaborators on the Far Away Project.
  He also does a significant amount of his work by
  email from his home computer, in part because of
  the time difference between Cambridge and the
  site of the Far Away Project, and would like to
  charge the costs of his Internet service to the
  Project award. Hed like to charge the costs of
  the following items or activities directly to his
  Project grant.

79
Proposed charges to the Far Away Project
Case 2

• a laptop computer to take with him to record data
  in the field
• a desktop computer for his lab (itll sit in the
  open, common area of his lab so his post-docs and
  students have access to it) for analyzing results
  using a special software program, once he returns
  from the field
• the specialized software
• the cell phone and monthly cell phone service
  fees, including roaming charges
• the costs of his home Internet service

80
The Issue
Case 2

• May Professor Moose put some or all of his
  computer and communications charges on the
  proposed Far Away Project budget?

81
ALLOWABILITY Summary of Conclusions
Case 2
Charge Yes or No?
A laptop computer to take with him to record data in the field YES in the measure to which the project is benefited
A desktop computer for his lab NO
The specialized software YES in the measure to which the project is benefited
The cell phone and monthly service fees, including roaming charges NO
The costs of his home internet service NO this is a personal expense
82
CONCLUSIONS
Case 2

• If Professor Moose purchases a laptop
  specifically for the purpose of advancing
  (benefiting) the work of the Far Away Project,
  then the item is readily identified specifically
  with the project with a high degree of accuracy
  and its full cost may be allocated to the
  Project. To treat its cost as a direct charge,
  he should include the cost of laptop in the
  proposal budget under Materials and Supplies
  and describe it in the budget justification.
• The entire cost of the specialized software is
  allowable as a direct cost because it was
  incurred solely to advance the work under the Far
  Away Project.

83
But what do I do with the costs of computers and
communications that are not allowable as direct
charges on the Project?
Case 2

• Charge them to the appropriate departmental
  account, unless they are personal expenses, which
  should be covered by the individual faculty
  member.