Faculty Grants Management Program

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Faculty Grants ManagementProgram

• GENERAL WORKSHOP

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Office of Sponsored Programs

• Lynne ChronisterAssociate Vice Provost of
  Research / Director
• 206-543-4043
• lchronis_at_u.washington.edu

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Office of Sponsored Programs

• Function Facilitate faculty in the development,
  submission and management of externally sponsored
  programs.
• OSP is the Office of Record and facilitates the
  business and administrative components of the
  proposals and awards.

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Office of Sponsored Programs

• Life cycle of the administration of research
• Pre-award stage through submission
• Award stage Negotiation and acceptance
• Post-award stage Expenditures and reporting (and
  potentially auditing)

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Office of Sponsored Programs

• OSP administrators organized by college and
  department
• Industry-sponsored clinical trials
• Sub-contracts
• Export control

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Office of Sponsored Programs

• What do we do?
• Review and approve proposals
• Submit electronic proposals
• Negotiate and sign awards and subcontracts
• Liaison with sponsor for award life
• Coordinate close-out of awards
• Implement Grant Contract policies (financial,
  legal, and regulatory)

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Office of Sponsored Programs

• Submitting proposals
• eGC-1 form, on-line SAGE system for routing and
  approval.
• Budgeting
• Direct costs OMB Circular A-21 Revision (May
  1996) OMB Circular A-21 Revision (May 1996) Cost
  Accounting Standards (See page 30.)
• Cost Sharing
• Indirect costs/facilities and administrative
  costs/overhead 56 for on-campus research

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Office of Sponsored Programs

• What do we review on proposals?
• Budget details
• Compliance issues (regulatory, legal)
• Forms completed
• All requisite components included and compliant

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Office of Sponsored Programs

• Indirect Costs
• Research rate 56
• On-campus vs. off-campus
• Waivers of indirect costs
• Bottom line You cannot charge the government
  twice for the same thing. They just dont like
  it.

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OMB A-21, Appendix C May 1998

• Examples where indirect costs may be charged as
  direct costs
• Large Complex Programs
• Extensive Data Accumulation
• Extensive Travel
• Manuals and Large Reports
• Geographically Inaccessible
• Project-Specific Database Management
• Graphics
• Human or Animal Protocol

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Compliance Issues

• Does the proposal involve the use of animals?
  Human subjects?
• Just in time procedure.
• Significant financial interest (conflict of
  interest)
• Export controls
• Use of unapproved stem cell lines
• Environmental Health and Safety

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Conflict of Interest

• Significant Financial Interest Disclosure Form
  Statement
• The PI affirms that all investigators on the
  project have read the UW Investigator Significant
  Financial Interest Disclosure Policy for
  Sponsored Projects and that the proposed project
  does or does not require investigators to
  complete the UW Significant Financial Interest
  Disclosure Form. (Attach the completed form if
  applicable).

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Export Controls Red Flags

• Shipping equipment to a foreign country?
• Collaborating with foreign colleagues in foreign
  countries?
• Working with a company or individual located in
  an embargoed country?
• Training foreign nationals in using equipment?
• Using another parties proprietary information?
• Sponsor approval rights over publications or
  foreign national participation?

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Office of Sponsored Programs

• What does the PI sign?
• Nothing that will create liability or commitment
• What does OSP sign?
• Anything that commits the institution

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Office of Sponsored Programs

• Reminder
• For NIH awards PUB MED CENTRAL
• NSF Change in the 2/9s salary policy
• Grants.gov challenges

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Office of Sponsored Programs

• Resources
• Grants Information Memoranda (GIM)
• OSP Web Page
• Researchers Guide

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www.washington.edu/research/osp/index.php
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Grant and Contract Accounting

• Michael Anthony
• Executive Director, Management Accounting
  Analysis

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Grant and Contract Accounting

• GCA post-award process
• Direct costs
• Indirect costs
• Program income agreements
• Cost sharing overview/Faculty effort reporting
• Change in level of effort
• Compliance
• Departmental/PI responsibilities
• Resources

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I. Grant and Contract AccountingPost Award
Process
Proposal Award Process
Assignment of Budget Numbers Receipt and
processing of Notice to Establish Account
Active Grant Period Expenditure Allowability
Payment requests to sponsors
Academic Dept/Office of Sponsored Programs
External to Grant and Contract Accounting
Audits
Closing Fiscal Reporting
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What is CAS?
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II. Direct Costs

• (From GIM 23, Costing Policy beginning on Section
  4, page 33)
• Costs that should be directly charged to
  sponsored agreements when they can be
  specifically identified to the work performed
  under those agreements.

• Salaries, Wages, and Fringe Benefits
• Supplies and Materials
• Other Direct Costs
• Off-Campus Projects Only

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II. Direct Costs
Salaries, Wages and Fringe Benefits

• Faculty
• Research associates
• Predoctoral and postdoctoral fellows

• Technicians, lab assistants, graduate students
• Tuition remission for graduate students

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II. Direct Costs

• (From GIM 23, Costing Policy beginning on Section
  4, page 33)
• Costs that should be directly charged to
  sponsored
• agreements when they can be specifically
  identified
• to the work performed under those agreements.

• Salaries, Wages, and Fringe Benefits
• Supplies and Materials
• Other Direct Costs
• Off-Campus Projects Only

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II. Direct Costs
Supplies and Materials

• Minor equipment
• Uniforms
• Photographic supplies
• Tools
• Animals

• Chemicals
• Laboratory supplies
• Computer software
• Drugs
• Books

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II. Direct Costs

• (From GIM 23, Costing Policy beginning on Section
  4, page 33)
• Costs that should be directly charged to
  sponsored
• agreements when they can be specifically
  identified
• to the work performed under those agreements.

• Salaries, Wages, and Fringe Benefits
• Supplies and Materials
• Other Direct Costs
• Off-Campus Projects Only

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II. Direct Costs
Other Direct Costs

• Travel
• Postage
• Subcontracts
• Radioactive waste disposal

• Animal care
• Motor pool
• Equipment
• Consulting services

• Other costs specifically identified and
  justified in funded proposals (where normal
  indirect costs are unlike)

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II. Direct Costs
Other Direct Costs

• Long distance telephone costs
• Freight

• Patient care and subject cost

• Costs that are normally indirect may be charged
  to non-federally sponsored agreements if
  permitted by the sponsors policies/practices
  or are otherwise approved by the sponsor

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II. Direct Costs

• (From GIM 23, Costing Policy beginning on Section
  4, page 33)
• Costs that should be directly charged to
  sponsored
• agreements when they can be specifically
  identified
• to the work performed under those agreements.

• Salaries, Wages, and Fringe Benefits
• Supplies and Materials
• Other Direct Costs
• Off-Campus Projects Only

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II. Direct Costs
Off-Campus Projects Only

• Basic telephone services (such as phone
  installation, monthly line charges, basic
  instruments)

• Office supplies
• Facilities costs (such as rent, maintenance,
  security, utilities)

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III. Indirect Costs
(From GIM 23, Costing Policy beginning on Section
4, page 33) The following costs are normally
considered administrative, infrastructure, or
costs that benefit multiple projects and/or
activities. Where unlike circumstances can be
justified, documented and approved by the
sponsoring agency, these costs may be incurred as
direct costs.
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III. Indirect Costs

• Cellular phones, pagers and related service
  charges
• Routine / administrative copying charges
• Memberships
• Journals and subscriptions

• Administrative and clerical salaries
• Office supplies
• Toner cartridges, Diskettes
• Basic local telephone services on campus

These costs are allowable and should be
incurred as direct costs for off-campus, APL, and
Regional Primate Center awards. These costs will
not require prior approval from the funding
agency.
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OMB Interpretive Statementof July 13, 1994
Examples Where Direct Charging May Be Appropriate

• Large complex programs
• Extensive data accumulation
• Extensive travel
• Manuals and large reports
• Geographically inaccessible
• Project-specific database management
• Graphics
• Human or animal protocol

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IV. Program Income

• Definition
• Gross income earned by the University that is
  directly generated by a sponsored activity or
  earned as a result of an award
• (OMB Circular A-110)

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IV. PI Responsibilities

• Identify sources of actual or potential program
  income at proposal stage.
• Develop a plan to use program income.
• Use income in compliance with sponsor regulations.

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IV. Process

• Separate program income budget established
  (initiated by PI/department).
• Forward income during the life of the project to
  GCA (PI/department).
• GCA will report income to sponsor if required.
• GCA will return unexpended program income at
  expiration.

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V. Cost Sharing Overview

• When effort or non-salary items such as supplies
  and equipment are funded by non-federal sources
  and contributed to a sponsored project.

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V. Types of Cost Sharing

• Mandatory
• Required by statute or program provision as a
  condition of the award.
• Committed (formerly known as budgeted voluntary
  and voluntary committed)
• Cost sharing quantified (often as a percentage of
  effort) in the sponsored proposal budget or
  budget justification without corresponding
  funding requested or awarded.

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V. Types of Cost Sharing (cont.)

• Salary cap
• Required by National Institute of Health (NIH),
  Substance Abuse and Mental Health Services
  Administration (SAMHSA), and Agency for
  Healthcare Research and Quality (AHRQ) when total
  faculty salary exceeds the salary cap set by
  these sponsors.
• Aggregate (phasing out)
• Percentage of cost sharing required on all
  research projects for a given sponsor, such as
  NSF.

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V. Faculty Effort Certification

• Effort Certification Certification of faculty
  effort on all sponsored activities. Effort is
  viewed in conjunction with the various activities
  the person engages in (e.g. instruction,
  administration, service and clinical activity).

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V. Faculty Effort Certification

• Average Work Week The average number of hours a
  faculty member normally works during a week.
  Hours are to be averaged over the effort
  reporting period.

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V. Faculty Effort Certification

• Institutional Base Salary (IBS)
• All compensation received from the institution.
  At the UW, IBS is the X and Y salaries from UW,
  UWP, and CUMG and the A and B salaries from the
  University of Washington. Salary components
  include regular salary, summer salary, paid
  professional leave, salary for retired faculty,
  administrative supplements, and endowed
  supplements.

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V. Faculty Effort Certification

• Salary Distribution
• Salary should be distributed appropriately to
  individual sponsored projects at a percentage no
  higher than the total effort on those projects.
• The remainder of University activity can be
  funded by one or many funding sources (e.g. if
  20 of University activity is teaching and 5 is
  administration, it can be funded entirely by one
  departmental budget or by a series of
  departmental budgets, including but not limited
  to state budgets, budgets for indirect cost
  recovery, gifts, and endowments).

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VI. Change in Level of Effort

• Most federal sponsors have requirements regarding
  change in status and level of effort of the PI
  and key personnel.
• Typically, the grantee is required to notify the
  sponsor in writing if the PI or key personnel
  specifically named in the award will
• withdraw from the project entirely,
• be absent from the project during any continuous
  period of 3 months or more,
• or reduce time devoted to the project by 25
  percent or more from the level that was approved
  at the time of award
• The sponsor must approve any alternate
  arrangement proposed by the grantee, including
  any replacement of the PI or key personnel named
  in the award.

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VI. Change in Level of Effort Examples

• 1. Proposal 10 effort
• Changed to 5 effort
• Change in level of effort is 50 and needs prior
  approval.
• 2. Proposal 50 effort
• Changed to 40 effort
• Change in level of effort is 20 so prior
  approval is not needed.
• 3. Proposal 50 effort
• (25 paid from grant budget 25 committed
  cost sharing)
• Changed to 40 effort
• Change in level of effort is 20 so prior
  approval is not needed.

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VII. Compliance Salaries/Personnel
Incorrect Practice
Correct Practice
A
Charging of salaries based on funding instead of
actual effort
Salaries charged based upon actual effort Payment
made in corresponding pay period
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VII. Compliance Salaries/Personnel
Incorrect Practice
Correct Practice
B
Payment based on actual hours worked. Payment and
hours properly documented and approved.
Hourly wages paid with no documentation of hours
worked and payment for hours not worked.
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VII. Compliance Salaries/Personnel
Incorrect Practice
Correct Practice
C
Grant was cross-charged (based on funding,
convenience, or as a payback for departmental
accounts to cover deficits.)
Proper accounting and payroll forms used.
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VII. Compliance Salaries/Personnel
Incorrect Practice
Correct Practice
D
Non-research activities performed while salary
charged to grants.
Charge costs that are direct benefit. (No
preparation of new and competing proposals.)
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VII. Compliance Salaries/Personnel
Incorrect Practice
Correct Practice
E
Inconsistent treatment of grant support services.
Reasonable, consistent method in charging dept.
services. Based on actual services or units used.
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VII. Compliance Salaries/Personnel
Incorrect Practice
Correct Practice
F
Signed within 60 days by PI or person with
suitable means of verification that the work was
performed. Retain records in the department.
Salary Certification Report not signed, or not
signed by PI or person with suitable means of
verification that the work was performed.
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VII. Compliance Purchase of Goods and Services
Incorrect Practice
Correct Practice
A
Goods and services purchased did not directly
benefit the research project, or were received
outside the project period.
All goods and services charged as direct costs
have direct benefit to research project and were
received during the project period.
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VII. Compliance Purchase of Goods and Services
Incorrect Practice
Correct Practice
B
Office supplies, basic telephone, subscriptions
and memberships charged directly without proper
justification and approval
Normal indirect costs charged in unlike
circumstances have been properly justified and
documented. (Refer to GIM 23)
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VII. Compliance Purchase of Goods and Services
Incorrect Practice
Correct Practice
C
Inadequate documentation of approval
PI or designee indicates approval for goods and
services. (Refer to GIM 14) PI reviews and signs
BARs/BSRs monthly.
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VII. Compliance Purchase of Goods and Services
Incorrect Practice
Correct Practice
D
Improper or unreasonable basis used to allocate
shared direct costs.
Costs distributed between two or more projects
based on proportional benefit or
interrelationship.
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VII. Compliance Purchase of Goods and Services
Incorrect Practice
Correct Practice
E
Failure to obtain required sponsor approvals
Written, prior approval obtained (where required)
to incur any costs as per sponsors regulations
and/or grant terms and conditions
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VII. Compliance Purchase of Goods and Services
Incorrect Practice
Correct Practice
F
Improper use of Cost Transfer Invoices (CTIs) and
Internal Sales Documents (ISDs)
CTIs and ISDs used to purchase goods and services
that directly support the project.
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VIII. Department / PI Responsibilities

• A) Assistance in grant and contract
  reporting/closings
• B) Separation of (high risk) duties, such as
  payroll or petty cash
• Deficit resolution
• Program Income
• Cost Sharing/Faculty Effort Reporting
• Unexpended balances
• G) Records retention
• H) Faculty Effort Certifications (FECs)
• I) Change in PI level of effort
• J) Address problems related to fiscal activities
  promptly

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IX. Resources

• A) On-line financial accounting system
• B) Grants information memoranda
• C) GCA on Webhttp//www.washington.edu/research
  /gca/office/
• D) OMB Circular A-21 Cost Principles for
  Education Institutions
• E) Sponsoring agency rules and regulations

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IX. Resources

• F) Quarterly research administrator meetings
• G) Targeted GCA assistance
• H) Departmental administrators and fiscal staff
• I) Advanced costing course
• J) GCA/OSP class

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Audits

• Zenaida Shattuck
• Associate Director

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General Workshop

• Audit Focus
• Tips for Dealing with Auditors

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Who Audits You?

• Federal and state Auditors
• Private/non-government sponsors
• Local government auditors
• Financial statement auditors
• Internal Audit

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State Audit Results
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State Audit Results

• 2007 finding
• Insufficient evidence to support adequate
  subrecipient monitoring
• No documentation to support the accuracy of
  annual performance report

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State Audit Results

• 2005 findings
• FECs and GCCRs not submitted on time
• Federal financial reports not submitted on time

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State Audit Results

• 2004 finding
• Salary benefits charged to grant were not
  based on actual effort
• 20,000 questioned costs

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State Auditors Office2007 Units Audited
Federal Funds

• Center on Human Development Disability
• College of Ocean Fishery Sciences
• Department of Health Services
• Office of Minority Affairs

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Clashing Philosophies

• University faculty tend to treat the grant funds
  as their own to support their research group.
• Auditors view the grant funds as earmarked for
  support of a very specific research project.

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Federal Audit Focus

• University-wide
• Payroll
• Purchasing
• Procard
• Petty cash
• Travel
• Adjustments/expenditure transfers

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Federal Audit Focus

• Program-specific
• Risk-based selection
• Size of the award?
• Department or program audited before?
• Good internal controls?
• Previous findings?
• Recommendations implemented?

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Compliance Requirements

• Allowability of activities
• Allowability of costs/Allocation of shared costs
• Eligibility
• Cost sharing
• Spend award within budget period
• Program income
• Reporting financial and technical
• Subrecipient monitoring
• Special tests and provisions

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Audit Focus on Internal Controls

• Evidence of PI authorization or review -
  may be delegated
• Adequate support for transactions
• System of checks and balances (separation of
  duties)

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Transaction Selection

• High risk transactions
• High value transactions
• Normally treated as indirect costs
• Expenditure transfers
• Salaries

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Transaction Testing

• Review of payroll certifications (GCCRs, FECs)
• Review documentation to support
• PI/designee approval
• Accurate payment or processing of transaction
• Evidence of receipt
• Review of progress reports
• Review for compliance with
• Special terms and conditions
• State and University policies

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When the Auditor Arrives

• You may have a University representative present
  when meeting with an auditor.
• School/Department Administrator
• Internal Audit Liaison

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When the Auditor Arrives
During the audit meeting

• Make sure both you and the auditor understand the
  audit objective.
• Make sure you understand the question.
• Answer honestly and openly.

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Why are you questioning me when everyone does it
this way?
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I dont know.
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I dont understand what the fuss is all about.
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When the Auditor Arrives
Limit conversation to internal controls and
transaction in question, and explain

• How you are directly involved in managing or
  overseeing your grant
• How expense benefited the grant
• Do not bring in funding issues or departmental
  politics

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The Chair did not give me back my indirect cost.
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The auditor seems to expect me to have kept
records. I am not an administrator. I am a
professor. All my life I avoided administrative
duties. This report seeks to penalize me in many
ways for not having accounting and record-keeping
skills.
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Common Audit Findings

• Payroll
• Payment of salaries based upon funding instead of
  actual effort.
• Hourly employees were paid with no documentation
  of hours worked.
• Grant was cross charged rather than proper
  payroll or accounting paper work submitted.

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Suggestions for PIs

• Understand state and federal guidelines
• Know who is tracking your grant activity
• Review and initial paperwork on a regular basis
• Know the Internal Auditor and ask for help
• Remember, you can ask for time to consult with
  the staff responsible for the work

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A High Percentage of Grant Investigations are
Triggered by Whistleblower Complaints

• To avoid this, the department should
• Have a system in place for reporting and
  investigating suspected improper governmental
  actions within the department
• Investigate complaints promptly and openly
• Communicate results

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Internal Audit Contact

• Peter Harris
• ph3_at_u.washington.edu
• Zenaida Shattuck
• zshatt_at_u.washington.edu
• Internal Audit
• iaudit_at_u.washington.edu

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Faculty Grants ManagementProgram

• GENERAL WORKSHOP