DS2 - Faculty Preparation

1
DS2 - Faculty Preparation

• Overview of UGA Policies and Procedures in
  complying with OMB Circular A-21

2
DS2 - General Information

• Disclosure Web Site
• www.busfin.uga.edu/disclosure
• All Policies and Procedures related to the
  University Disclosure Statement may be found
  under the Disclosure Policies and Disclosure
  Procedure links
• Policies are effective January 1, 2006
• Substantial Changes must be approved by our
  Cognizant Federal Agency

3
DS2 - Meeting Agenda

• What is a DS2?
• How was the UGA DS2 developed?
• Policy and Procedures - overview
• Additional References
• Conclusion
• Questions

4
What is a DS2?

• Documents and discloses University cost
  accounting practices
• Required to be submitted to cognizant agency and
  cognizant audit agency.
• Policies and procedures, instructions, and
  guidelines for individual investigators,
  department heads, and administrators need to be
  made available because it is their responsibility
  to understand and know them.
• Provides Guidelines for charging costs to
  sponsored awards
• Defines University direct costing policies and
  procedures
• Cost-sharing policies
• Time and effort reporting policies and procedures
• Policies on Service Centers

5
DS2 How was it Developed

• Three working group committees were formed
  comprised of College and Departmental Business
  Managers and Faculty representatives
• Steering Committee comprised of
  Associate/Assistant Deans, Department Head, and
  Center Director representatives

6
DS2 - Policies

• New Policies
• Cost Transfer
• Program Income
• Service Center
• Existing Policies Revised
• Cost Share
• Direct Cost
• Personnel Activity Report

7
DS2 New PoliciesCost Transfers

• Cost Transfer movement of expense(s) between
  two different university account numbers
• Charges should be moved within 90 days of initial
  charge
• Charges moved after 90 days require PI signature
• All transfers must have adequate
  explanation/justification
• No transfers allowed to a restricted account if
  expense is more than a year old

8
DS2 New PoliciesCost Transfers

• Appropriate Justification Includes
• When the error, or need for a transfer was
  discovered
• What the charge was for
• Why the charge was identified with a different
  project originally
• How the charge relates to the project that it is
  being transferred to

9
DS2 New PoliciesCost Transfers

• Conditions for not Allowing Cost Transfers
• No benefit to the project can be demonstrated
• Cost overruns are being transferred to an account
  with budget available
• Charges are being parked on one account with
  the intention of being moved to another

10
DS2 New PoliciesProgram Income

• Program Income is gross income earned by the
  recipient that is directly generated by a
  supported activity or earned as a result of the
  award.
• Principal Investigator must
• Identify potential sources at proposal stage,
  note on transmittal and application
• Plan for use, prepare budget for program income
  accounts
• Verify program income on reports
• Address account balance issues at project
  termination

11
DS2 New PoliciesProgram Income

• Federal Sponsors
• Use program income funds before sponsor funds.
• If funds remain in the project or program income
  account after the project has terminated,
  balances will revert to sponsor.
• If the PI wishes to retain these funds, he or she
  must write a letter to the sponsor requesting to
  use these funds, and outlining a plan for their
  use.
• Letter must be sent to OSP for endorsement and
  forwarding to the sponsors for approval.
• Non-Federal Sponsors
• In many cases, the sponsor does not have an
  established program income policy. If the sponsor
  is silent on this issue, the income is not
  reportable and is handled as a departmental sale
  or recharge activity.

12
DS2 Existing Policies-RevisedCost Share

• The policy of the University of Georgia is to
  limit its cost sharing on externally funded
  projects to the amount specifically mandated in
  the application guidelines of the sponsor.
• The University of Georgia will support committed
  cost share that is either voluntary or mandatory
  by the sponsor when

13
DS2 Existing Policies-RevisedCost Share

• All cost shared amounts are specified on the
  Office of Sponsored Programs Transmittal Form,
  and
• Each cost shared amount is approved on the OSP
  Transmittal Form by the relevant dean, director,
  or department head. Approval signatures are
  binding and indicate a willingness to provide
  cost share resources in support of the proposed
  project.

14
DS2 Existing Policies-RevisedCost Share

• Example of committed cost sharing and how it
  should be tracked
• PI stated in proposal narrative that they would
  spend 10 of their time on project. PIs monthly
  academic salary is 7,000.

Cost Share Not Tracked Cost Share Not Tracked Cost Share Not Tracked Cost Share Tracked Cost Share Tracked Cost Share Tracked
(PAR not issued) (PAR not issued) (PAR not issued) (PAR required) (PAR required) (PAR required)
Type of Account Percent Effort Salary Percent Effort Salary
Instruction (1011GH) - state Instruction (1011GH) - state 25 1,750 25 1,750
Dept. research (1025GR) - state Dept. research (1025GR) - state 75 5,250 65 4,550
Cost Share (1021CR) - state Cost Share (1021CR) - state     10 700
100 7,000 100 7,000
15
DS2 Existing Policies-RevisedCost Share

• Alternative
• PI stated in proposal narrative that they would
  spend 10 of their time on project and asks
  sponsor to fund this effort. PIs monthly
  academic salary is 7,000.

PAR not issued PAR not issued PAR not issued PAR required PAR required PAR required
Type of Account Percent Effort Salary Percent Effort Salary
Instruction (1011GH) - state Instruction (1011GH) - state 25 1,750 25 1,750
Dept. research (1025GR) - state Dept. research (1025GR) - state 75 5,250 65 4,550
Sponsored research (1021RR) - grant Sponsored research (1021RR) - grant     10 700
100 7,000 100 7,000
16
DS2 Existing Policies-RevisedCost Share

• Cautionary Notes
• Cost share commitments can be stated in several
  places within a proposal.
• When faculty time is contributed as cost share in
  support of a project, it is expected that
  budgeted research time be utilized for cost share
  before instructional time is considered. Whenever
  cost share involves instructional time, the
  faculty member's department head and/or dean must
  be notified so that approval can be obtained.
• In all instances where cost sharing is described,
  the institution is committed to account for these
  expenditures. The budgetary unit of record is
  responsible for documenting and tracking all
  commitments made on a project, whether made by
  that department or not, unless subaccounts are
  established so that the responsibility can flow
  down to other units.

17
DS2 Existing Policies-RevisedCost Share

• Principal Investigator
• Carefully consider cost share before including in
  proposal
• Identify source of cost share funds and ensure
  they are not federal (unless authorized by
  statute)
• Monitor budget and expenditures on cost share
  account
• Ensure accuracy of cost sharing/matching

18
DS2 Existing Policies-RevisedDirect Cost Policy

• Major Changes
• More specific in order to address consistency
• Determination factors defined Allowable,
  Allocable, Reasonable
• Determination Strategy
• Treatment of direct and facilities and
  administrative (indirect) costs
• Unallowable Costs

19
DS2 Existing Policies-RevisedDirect Cost Policy

• Principal Investigator
• Development of proposal budget, and financial
  management of project, consistent with UGAs
  Direct Cost Policy Procedures
• Allocation of costs to benefiting projects
• Review of project budgets and actual costs to
  ensure timely correction of any errors

20
DS2 Existing Policies-RevisedDirect Cost Policy

• Examples of Problematic Costs
• Administrative and Clerical Costs
• Cell phones
• Routine Postage
• Individual Professional Memberships
• General Office Supplies and Equipment
• Printer Toner, Copy Paper
• Computers (unless scientifically justified)
• PDAs/Blackberries
• Submission of technical/final reports

21
DS2 Existing Policies-RevisedDirect Cost Policy

• Example of appropriate use of different funds
• 1011GH Instruction salaries materials
• 1025GR Dept. or general research salaries
  materials
• 1011GJ Dept. admin. salaries, general office
  supplies, paper, basic telephone, routine
  postage, computers
• 102xAR Same as GJ, but another funding source
  or use to supplement research costs
• 1021RR Organized research salaries materials
  -- charges that directly benefit aim of project

22
DS2 Existing Policies-RevisedDirect Cost Policy

• Major Projects and Exceptions
• - Modular Grants rarely qualify for major project
  status.
• - To qualify for a Major Project you must apply -
  
• Large , complex programs, such as general
  clinical research centers, primate centers,
  program projects, and projects requiring managing
  teams of investigators from other institutions.
• Projects which involve extensive data
  accumulation, analysis and entry, surveying,
  tabulation cataloging, searching literature, and
  reporting, such as epidemiological studies,
  clinical trials, and retrospective clinical
  records studies.
• Projects that require making travel and meeting
  arrangements for large numbers of participants,
  e.g. conferences or seminars.

23
DS2 Existing Policies-RevisedDirect Cost Policy

• Major Projects and Exceptions (Continued)
• Projects where the principal focus is the
  preparation and production of manuals and large
  reports, books and monographs
• Projects that are geographically inaccessible to
  normal departmental administrative services, such
  as seagoing research vessels, radio astronomy
  projects, and other research field sites that are
  remote from the campus
• Individual projects requiring project-specific
  database management individualized graphics or
  manuscript presentation human or animal
  protocol IRB or multi-faceted coordination.
• Extraordinary and extensive administrative
  support, significantly greater than the routine
  level provided by academic department staff may
  be budgeted and charged to sponsored projects
  including research data gathering, computer
  programming, research training,developing
  materials for presentations, etc...

24
DS2 Existing Policies-Revised Personnel
Activity Reports (PARs)

• OMB Circular A-21 (Section J.10) contains
  requirements for procedures and documentation to
  support the distribution of salaries and wages
  charged directly to an award or through
  Facilities and Administrative (indirect)
  activities.
• The employees salary must follow consistently
  applied institutional policies regarding
  compensation and be allocated through an official
  payroll system that ties with the financial
  records of the institution.

25
DS2 Existing Policies-Revised Personnel
Activity Reports (PARs)

• The payroll distribution must reasonably reflect
  the activity for which the employee is
  compensated.
• The method must recognize the principle of
  after-the-fact confirmation so that costs
  distributed represent actual costs.
• The main objective of A-21 is verification that
  compensation charged is appropriate to the
  activity performed.

26
DS2 Existing Policies-Revised Personnel
Activity Reports (PARs)

• Our verification method is in the form of
  Personnel Activity Reports (PARs).
• PARs are used to confirm that the distribution of
  activity represents a reasonable estimate of the
  work performed by the employee during the period.
• University wide, only 5 of PARs are adjusted.
  For the majority of employees, the review and
  certification of a PAR is not a burdensome task.

27
Personnel Activity Reports (PARs)Who receives a
PAR?

• In any of the following situations an employee
  will receive a PAR
• 1. A portion of their salary charged directly
  to restricted accounts or cost sharing accounts.
• 2. A portion of their salary charged to a major
  function and an indirect cost activity.
• 3. A portion of their salary charged to more
  than one indirect cost activity.

28
Personnel Activity Reports (PARs) How do I
verify and submit a PAR?

• A PAR will be generated for each pay period for
  which an employee is paid.
• To confirm that the distribution of activity
  represents a reasonable estimate of the work
  performed by the employee during the period, each
  PAR must be reviewed for accuracy and approved by
  the employee or by a responsible official having
  first-hand knowledge of the work performed.

29
Personnel Activity Reports (PARs)How do I verify
and submit an e-PAR?

• When PARs are generated, an email notification
  will be sent to employees registered email
  address and to their home departmental
  administrator.
• The electronic PAR system can be accessed at
  https//webapps.ais.uga.edu/PCTE/
• You will log on to the electronic PAR system
  using your MyID and password.

30
(No Transcript)
31
Personnel Activity Reports (PARs)How do I verify
and submit an e-PAR?

• If the PAR reflects accurately the time expended
  on a project tracked by a University account
  number, you will check the Check here to return
  this PAR without any changes check box.
• Next, you will click the Save and Submit button
  to transmit the approved document to the
  Accounting Department.

32
Personnel Activity Reports (PARs)How do I verify
and submit an e-PAR?

• In those situations where the current
  distribution does not reflect the time actually
  expended on a project for the period covered by
  the PAR, your department administrator should be
  notified of the necessary changes.
• Your department administrator will be able to
  enter the changes and submit the revised PAR to
  the Accounting Department.

33
DS2 New Policies Service Centers

• A departmental sales unit established for the
  purpose of providing goods and services to
  university departments, and only incidentally to
  customers outside the university.
• Service centers offer goods and services that are
  unique, benefit the effectiveness of the
  University when conveniently available, may
  require special controls, are subject to federal
  and/or state regulations, or are not readily
  available from external sources.
• Service Centers that generate revenues greater
  than 100,000 per year need to prepare business
  plan.

34
DS2 New Policies Service Centers Billing Rates

• Departments are responsible for the development
  and review of Service Center billing rates.
• The billing rate should be calculated to break
  even at the end of a fiscal year (accounting
  period).
• The billing rate should only include costs to be
  recovered (no profit margins).
• The same billing rate must be used to charge all
  UGA accounts (internal customers).

35
DS2 - Policy Summary

• Effective January 1, 2006
• Cost Transfers (JVs)
• Must be performed within 90 days of charge.
  Otherwise will require PI signature
• Must have adequate explanation/justification
• No transfers to a restricted account more than a
  year old
• Program Income
• Used before sponsored funds or must have approved
  authorization
• Must have approval from sponsor for UGA to retain
  any funds
• Cost-Share
• Try to limit and specify on Sponsored Program
  Transmittal Form

36
DS2 - Policy Summary

• Direct Cost
• Can not routinely charge cell phones, routine
  postage, membership dues, general office supplies
  and equipment to sponsored awards (exceptions may
  be granted by justification through Sponsored
  Programs. General Federal Funded Research
  projects seldom qualify for such an exception)
• PARs
• Electronic PARs will be implemented by July 1,
  2006
• Everyone will be able to certify with no changes
  
• Departmental administrators will be only ones
  that can make changes
• Service Centers
• Departments must develop billing rates
• Must break-even (no profit)
• Must charge same rate to all UGA customers

37
(No Transcript)
38
DS2 Additional Training

• Faculty Preparation Course will be offered at
  Training and Development on an ongoing basis.
• Business Manager, Departmental Administrators and
  Office Manager training will be offered either on
  request and/or at Training and Development (Six
  Courses lasting approx. two hours per course).

39
DS2-Faculty Presentation

• Questions???