DIVISION OF RESEARCH

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• DIVISION OF RESEARCH
• Sponsored Projects - Financial Management for
  Principal Investigators
• Fall 2008
• Kimberly Klatt
• Research Compliance Officer

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Agenda

• Compliance Overview
• Basic Cost Principles
• Allowable/Unallowable Costs
• P-card Expense Descriptions
• Proportional Charging (allocation)
• Costs Transfers
• Transactions Requiring DoR Approval
• New Fabrication Policy

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Clarkson University Compliance Program

• University Compliance Committee (UCC) established
  in 2005.
• UCC formed to ensure compliance facing the
  University.
• UCC consists of six sub-committees.
• Committee responsible for handling, reviewing,
  monitoring and enforcing all University
  compliance matters.
• Research compliance represents one of the six
  sub-committees.

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Clarkson University Compliance Committee
Structure
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Research Compliance Regulations

• http//www.clarkson.edu/dor/compliance
• When sponsored funding is accepted by the
• institution we agree to comply with federal
• and state regulations
• OMB A-21 - Cost Principles
• OMB A-110 - Uniform Administrative Requirements
• OMB A-133 - Audits
• Assurances, Certifications, Representations

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Why is Research Compliance Important?

• Non-compliance can place Clarkson and the
  Principal Investigator at significant risk and
  can result in
• Damage to the Universitys or your reputation and
  integrity
• Severe fines/penalties to the institution
• Designation as a high risk institution
• Suspension/debarment from receiving federal funds
  (University and PIs)
• Criminal Prosecution

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Realities of Compliance

• Compliance is a collaborative responsibility of
  the administration, faculty, and staff.
• We have a legal responsibility to comply with
  federal and state requirements.
• Our daily activities and responsibilities often
  have an underlying purpose regarding compliance.
• Conflict of Interest Forms
• P-card Reconciliations
• Cost Transfers
• Constitution Day
• Hiring Practices
• Etc...

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PI Responsibilities

• The responsibilities or obligations that PIs
  agree to when accepting an award
• include the following
• Commitment Review all documentation including
  referenced materials within the award documents
  and comply with the terms and conditions.
• Communication Review the roles and
  responsibilities of all parties involved in the
  project and assure that they are aware of their
  obligations.
• Technical Management Manage the technical
  aspects of the program and comply with the
  deadlines and reporting requirements in award
  documents or the statement of work.
• Supervision Staff the project and supervise
  project personnel.
• Financial Charge to the research account only
  those expenditures directly related to the
  technical completion of the project that are
  allowable, allocable, and reasonable, as defined
  by OMB Circular A-21.
• Accuracy Review the monthly accounting
  statements to verify that all charges to that
  account are appropriate.

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OMB A-21 Basic Cost Principles

• Direct vs. Indirect
• Direct Costs Allowable costs that can be
  identified
• specifically with a particular sponsored
  project(s) and
• be assigned easily with a high degree of
  accuracy.
• Indirect Cost (FA) Allowable costs that are
  incurred for
• common or joint objectives and therefore cannot
  be
• identified readily and specifically with one or
  more
• sponsored project.

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OMB A-21 Basic Cost Principles

• How to Distinguish Between Direct and Indirect
  Charges
• http//www.clarkson.edu/dor/grant_mgmt
• Defines what costs are allowable to sponsored
  projects.
• Requires institutions to classify allowable costs
  either as direct or indirect costs.
• Allowable costs must be consistently treated as
  direct or indirect.
• Consistent treatment of costs assures that the
  same types of costs are not charged both as
  direct and indirect costs.
• Costs classified as indirect cannot be charged
  directly to your sponsored project, unless they
  qualify as an unlike or unique circumstance.

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How To Determine a Allowable Direct Cost

• How to Distinguish Between Direct and Indirect
  Charges
• http//www.clarkson.edu/dor/grant_mgmt
• Direct Charges must pass meet the following
  criteria
• Allowable Permitted as a charge per OMB Circular
  A-21.
• Necessary to accomplish the scope of work of the
  project.
• Reasonable nature of the cost, and the price
  paid, reflects the action that a prudent
• person would have taken.
• Allocable the cost can be allocated
  specifically with one research project or if
• the cost benefits more than one project it can be
  allocated based on proportional benefit or
• a reasonable basis.
• Consistently Treated Costs must be classified as
  a direct charge by the University.

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What Cant Be Charged Directly to a Sponsored
Award?

• Office Supplies
• Administrative and Clerical Staff Salaries
• Basic Line Telephone Charges
• Administrative Office Equipment (i.e. copiers,
  office computers and printers)
• General Use Software (Word, Excel, Access, or
  equivalent)
• General Use or janitorial Items (paper towels or
  soap)
• How to Distinguish Between Direct and Indirect
  Charges
• http//www.clarkson.edu/dor/grant_mgmt

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Exception to the Rule

• Costs normally considered indirect can
• be charged as direct if they qualify as an
• Unique Circumstance
• or
• Unlike Circumstance
• Both circumstances must be properly justified and
• documented.

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What are Unique and Unlike Circumstances

• Unique Circumstance
• Use exceeds amount typically required for a
  project.
• Purpose is not different from University norm.
• i.e. Researcher needs to prepare 10,000 surveys
  for distribution requiring additional paper,
  toner, envelopes, and postage.
• Unlike Circumstance
• Research purpose is different from University
  norm.
• i.e. Scope of work is analyzing the composition
  of toner requiring additional toner cartridges
  for analysis.
• How to Distinguish Between Direct and Indirect
  Charges
• http//www.clarkson.edu/dor/grant_mgmt

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How Do You Justify and Document Unique or Unlike
Circumstances?

• New Proposals
• Justify the expenditure in the budget
  justification.
• Let Todd Travis know during the proposal process
  you have an unique or unlike circumstance.
• If you receive the award the DOR will notify
  Accounts Payable that such charges are allowable.
• Active Awards
• You can notify the Research Compliance Officer
  (RCO) at ext. 4441.
• RCO will quickly document the circumstance and
  notify Accounts Payable that the charges are
  allowable.
• If unique or unlike circumstances are not
  properly justified and
• documented Accounts Payable will send out a
  Direct Cost Justification
• Form requesting reallocation or justification.

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What Can Be Charged Directly to a Sponsored
Award?

• Laboratory Supplies (i.e. chemicals and
  glassware)
• Long Distance Telephone Calls
• Laboratory Equipment (gt5000 with agency
  approval)
• Equipment maintenance or repair
• Computers, Printers and Networking Supplies (for
  research data collection or processing only)
• Specialized Software (Computational)
• Travel
• How to Distinguish Between Direct and Indirect
  Charges
• http//www.clarkson.edu/dor/grant_mgmt

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Examples of Unallowable Food Beverage Charges

• Any cost related to entertainment
• Any cost not necessary to accomplish the
  objectives of the grant program
• Receptions
• Hospitality Room
• Pizza for graduate students
• Lunch for students during a local research
  activity.
• Meals with colleagues to discuss research
• Lunch during weekly meetings to discuss the
  progress on a project

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Allowable Food Beverage Charges

• Food and beverages may be allowable if all the
  following tests are satisfied
• Food and beverages are not directly related to
  entertainment or social event.
• Food and beverages are integral in order to
  provide continuity to a work related activity
  (i.e. conference, professional meetings, formal
  training) and considered mandatory for the
  attendees if they are to receive the full benefit
  of participation in the event.
• Costs of the food and beverages are considered
  reasonable.

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Examples of Allowable Food Beverage Charges

• Food beverage cost for an employee on travel
  status when travel is necessary to accomplish the
  objectives of the grant program.
• An individual is recruited to fill a position on
  a research grant and he/she travels to Clarkson.
  Her/his meal may be charged to the grant since
  she/he is on travel status, but the PIs meal may
  not.
• Meals or refreshments for a formal advisory
  committee meeting mandated or designated to meet
  periodically as part of project management
  (should be included as part of the proposal,
  utilizes formal agendas and includes participants
  from different locations).

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P-Card Reconciliations

• You must provide adequate justification to
  determine if the charge is
• allowable
• Expense Descriptions should indicate the
  benefit to the
• project or scope of work (i.e. What is the item
  used for ?,
• Why do you need the item?).
• Provide documented evidence to auditors that
  costs are necessary for the performance of the
  project.
• Remember to proportionally charge expenses used
  for more than one project or educational
  activity. If the cost benefits one project only,
  then simply indicate the item is used for that
  project only.
• Federal auditing regulations require that
  Expense Descriptions are reviewed by the
  Accounts Payable Staff.
• Proper Expense Descriptions will minimize the
  need for Accounts Payable to request additional
  information (i.e. Direct Cost Justification Form)
• This methodology also applies to purchase
  requisitions, disbursement orders, and travel
  expense accounts.

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Some Expenditures Are More Scrutinized By
Auditors and May Include

• General Lab Supplies (i.e. gloves)
• Computers Printers
• Networking Supplies Software
• Travel Books
• Expense descriptions and proportional charging
  are often scrutinized by auditors on these types
  of expenditures.
• These need additional justification in the P-card
  expense description line (See provided direct
  cost justification forms for the questions to ask
  yourself. Include the answers in your expense
  description.)
• If the cost benefits one project only, then
  simply indicate the item is used for that project
  only. Otherwise, charge proportionally.
• This additional documentation will minimize the
  need for Accounts Payable to contact you. (i.e.
  Direct Cost Justification Form).

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Direct Costs Justification Forms
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Direct Cost Justification Form
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Direct Cost Justification Form
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Allocation of Charges

• Two rules apply when proportionally charging
  direct costs that
• Benefit more than one sponsored project or
  educational activity
• Rule of Proportional Benefit
• If a cost benefits two or more projects or
  activities in proportions that can be determined
  without undue effort or cost, the cost should be
  allocated to the projects based on the
  proportional benefit.
• Rule of Interrelationship
• If a cost benefits two or more projects or
  activities in proportions that cannot be
  determined because of the interrelationship of
  the work involved the costs may be allocated or
  transferred to benefited projects on any
  reasonable basis.

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Acceptable Allocation Methods

• Usage Based The cost of lab supplies allocated
  based upon the quantity used on each project or
  documented usage of equipment.
• Time Based The cost of computer equipment
  allocated based upon the number of hours used for
  each project.
• Effort Based The cost of lab supplies
  proportionately allocated based upon the PIs
  percentage of effort charged to each project.
• Other reasonable methodologies can be developed,
  provided that they meet the A-21 allocation
  principles.
• Contact the DOR for further assistance.

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Unacceptable Allocation Practices

• Shifting expenditures to other sponsored projects
  in order to meet deficiencies, to avoid
  restrictions, or for other reasons of convenience
  
• Charging expenses that benefit two projects
  solely to one project because the other project
  is almost out of funding
• Rotating charges among projects
• Charging an expense to one project when the
  expense has benefited more then one project or
  other activities

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Allocation Documentation

• Allocation methodologies must be documented and
  auditable when employed.
• Documentation should indicate how the allocation
  methodology is logically related to the cost
  being allocated.
• Documentation should be retained by PI.

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Appropriate Reasons for Cost Transfers

• Correct errors in processing the original
  transaction
• Reallocate shared services
• Reallocation of effort and other non-labor
  expenses where multiple projects benefited
• To shift pre-award costs in accordance with the
  provision of OMB Circular A-110

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Unacceptable Reasons for Cost Transfers

• Charges from University accounts to externally
  funded accounts generally are not acceptable.
  (Exceptions include phone charges, xeroxing or
  postage normally made to the department)
• Cost transfer is solely for the intent of
  utilizing unexpended funds of a sponsored award
• Cost transfer is for the purpose of avoiding a
  cost overrun by charging another, unrelated
  sponsored award

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Transactions Requiring DoR Approval

• All Travel Expenses (object codes 2654/2656)
• Travel Authorizations (TA)
• Expense accounts under which no TA was written
• Expense accounts that exceed the amount of the TA
• Participant Support Costs (excludes p-card)
• Single transactions that exceed 1000.00
• All equipment/fabrication (object codes
  2534/2528, excludes p-card)
• For efficient processing times please send to the
  DoR initially.

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New Fabrication Policy

• Comptrollers Office has issued a new policy
  allowing the use of the Procurement Card for the
  account code 2528 Fabrication of equipment.
• It can only be used if the appropriate
  Fabrication Request Form has been completed and
  approved. You will find the new policy and form
  on the Clarkson University website at the
  following URL http//www.clarkson.edu/finance
• If you have any questions please contact Connie
  Klingbeil at the Office of Risk Management and
  Purchasing at 315-268-7722 or Karen Barrett of
  the Comptrollers Office at 315-268-7650.

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DoR Contact Information

• Greg Slack
• Director of Research and Technology Transfer
• gslack_at_clarkson.edu ext. 6475
• Todd Travis
• Award Administrator (Pre-Award)
• ttravis_at_clarkson.edu ext. 6475
• Connie Ferguson
• Contract Grant Administrator (Post-Award)
• cferguson_at_clarkson.edu ext. 6475
• Kimberly KlattResearch Compliance Officer
• kklatt_at_clarkson.edu ext. 4441

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DoR Contact Information

• Adele Pugliese
• Sr. Dept. Secretary
• (MAE, ECE, PPAS, IACUC)
• apugliese_at_clarkson.edu
• Billi Jo GoodfellowSr. Dept. Secretary (CAMP,
  CBE, BIO, PSY, CM)bgoodfellow_at_clarkson.edu
• Norma WoodsAdministrative Secretary (CAMP,
  CBS, PT, CEE )nwoods_at_clarkson.edu
• Heather Kish
• Sr. Dept. Secretary
• (CUSB, PHY, MCS, HSS, IRB)
• hkish_at_clarkson.edu

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Comptrollers Office Contact Information

• Jim Fish
• Comptrollerfishj_at_clarkson.edu ext. 6689
• Donna Martell
• Associate Comptrollerdmartell_at_clarkson.edu ext.
  7258
• Sue Scott
• Chief Accountant
• scotts_at_clarkson.edu ext. 6407
• Kelly Rathbun
• Research Accountant
• krathbun_at_clarkson.edu ext. 6462
• Elizabeth Corbine
• Accounting Assistant (P-cards)
• ecorbine_at_clarkson.edu ext. 3789

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Comptrollers Office Contact Information

• Roberta Chestnut
• Accounting Assistant (POs)
• rchestnu_at_clarkson.edu ext. 3789
• Betsy Niles
• Head Cashier (Aramark)
• nilesbm_at_clarkson.edu ext. 6486
• Sarah Ellis
• Accounting Assistant (DOs/Travel)
• sellis_at_clarkson.edu ext. 3789
• Karen Barrett
• Endowment/Plant Accountant (Fabrication)
• kbarrett_at_clarkson.edu ext. 7650

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DOR WEBSITE http//www.clarkson.edu/dor

• Funding Resources
• Proposal Preparation
• Grant Management
• Compliance
• Training
• Export Controls
• Technology Transfer

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QUESTIONS?