Module 8 Setting up the Project Outline

Transcription

1 Module 8 Setting up the Project Outline Key concepts in this module are: Financial Accounting System (FAS) structure and FAS account create process Setting up Payroll and other recurring expenses Setting up Subawards and Sponsored Consulting agreements Determining cost allocation methodologies at setup so that cost allocations can be made timely during the project period FAS Structure FAS has a range of general ledger and subsidiary ledger accounts that are reserved for sponsored awards. General ledger accounts record balance sheet activity (cash, account receivable, accounts payable and fund balance), while the subsidiary ledger accounts record income, expense and budget transactions. FAS account numbers are 10 digits long. The first digit is referred to as the ledger number, digits two through six are referred to as the account number, as is the entire 10 digit number, and digits seven through ten are referred to as the account control number in the case of the general ledger and as the subaccount number in the case of the subsidiary ledger. Ledger Numbers In the case of the general ledger, the ledger number is always zero. Subsidiary ledgers are numbered between one and nine. The subsidiary ledgers and the purpose for which they are used are as follows: Ledger No. Type of Activity Type of Funding 1 Revenue Unrestricted funds (tuition, indirect cost recovery, gifts, endowment income and sundry income) 2 Revenue and Expenses Auxiliary enterprises, recharge centers, University designated funds, Biological Sciences Division unrestricted budget allocations 3 Revenue and Expenses Hospital (Note: Hospital has their own FAS) 4 Expenses Non BSD unrestricted budget allocations 5 Revenue and Expenses Federal sponsored awards 6 Expenses Restricted gifts and nonfederal sponsored awards 7 Expenses Restricted endowment expenses 8 Expenses Nonrecurring facility expense (Note: Recurring facility expenses are recorded in ledgers 2 and 4.) 9 Expenses Agency accounts (Note: Revenues associated with the expense activity recorded in ledgers 5, 6, 7, 8 and 9 are recorded in the corresponding general ledger account.) Account Numbers 1

2 The account number, digits 2 through 6, also follows a preset structure. The sponsored award account ranges are as shown below: General Ledger Account Subsidiary Ledge Master Account Subsidiary Ledger Associate Account Federal 20000/ / /99999 Nonfederal 34000/ / / / / /98999 Nonfederal clinical trials 36000/ / /97999 The complete FAS account structure can be found at: Account Controls The last four digits of the 10 digit general ledger account number is called the account control. The account controls record account transactions that affect assets, liabilities, fund additions (including revenues) and fund deductions (including expenses). There are also account controls that are designated specifically to show summarized budget, encumbrance and expense activity for all of the subsidiary ledger accounts tied to (mapped to) the general ledger account. Account control ranges and the accounting accumulators they effect are show in the table below: Account Control Range Description 1100/1999 Assets 2000/2999 Liabilities 3000/3999 Fund Balances 4000/4999 Fund Additions 5000/5999 Fund Deductions 9000/9999 Summary Control Totals for Budget, Encumbrances and Expenses A detailed listing of account controls can be found at: Subaccounts The subaccount number is the last four digits of the 10 digit subsidiary ledger account number. The subaccount number value will describe the type of expense that is being recorded. Subaccount ranges and there description appear below: 2

3 Subaccount Range Description 1000/1999 Salaries, wages, benefits 2000/4999 Services 5000/5999 Supplies 6000/6999 Equipment 7000/7599 Travel 7600/8199 Leases, rentals 8300/8399 Tuition, stipends and other aid 8500/8599 Library, art acquisitions 8600/8699 Subrecipient expense 8700/8985 Plant related expense 9000/9099 Interest expense 9100/9199 Indirect cost 9200/9921 Unallowable and other expenses Automatic Budget Reallocation (ABR) The ABR feature in FAS allows budget to be entered against budge pool subaccounts that are reserved solely to record budget activity. Budgets are place in the pools and then distributed to subaccounts that draw upon that pool when expenditures are recorded. Budget pools include: Category Budget Pool Applicable Subaccounts Subaccount 1000/8599 costs Personnel costs Subaccount f costs Services Supplies Equipment Travel Other general costs Student Aid Unallowable Costs Budget pools work in combination with ABR codes, of which there are eight. To learn how ABR works, visit the FAS Manual at < Accounts Required for a Sponsored Award A sponsored award that has one budget period will have one general ledger account, one subsidiary ledger master account and, if need be, one or more subsidiary ledger associate accounts. 3

4 How many accounts a sponsored award that has two or more budget periods has depends in part on whether the awarding agency allows the University to comingle funds from different budget periods. If comingling is allowed, then, the sponsored award will have the same number of accounts as a sponsored award that has one budget period, i.e., one general ledger account, one master account and, if need be, one or more associate accounts. If comingling is not allowed, then each budget year of the sponsored award will have its own general and subsidiary ledger set of accounts. A way to determine if an awarding agency allows funds to be commingled is to determine if the agency allows the University to carry forward unobligated (unspent) funds from one budget period to the next without agency prior approval. If they do, then the funds can be comingled. Creating Accounts There are several different processes for creating or updating an FAS account for a new or amended award. The Local Business Centers (LBCs), BSD Dean s Office, Medicine, BMB, Ben May, Pathology, Cancer Research Center and CALGB will create or update Financial Accounting System (FAS) accounts for awards that they manage. For other units, Sponsored Award Accounting creates/updates the account. Sponsored Award Accounting creates an account for a new award upon receipt from University Research Administration (URA) of an award notice. In addition to creating accounts for awards upon receipt of an award notice, award accounts may also be created in advance of an award notice. Units are encouraged to create advance accounts so that accounting transactions that must occur prior to the receipt the award notice (e.g., issuance of a purchase order for an equipment acquisition that has a significant amount time between the date ordered and the date delivered) can be recorded in accounts reserved for the award. Another reason to create advance accounts is because notice of awards are often received after the official start date of the award. Communication between the PI and Administration The keys to successful project management are communication, timing, documentation. Meet in person with the PI, postaward administrator, FSR, HR administrator to review proposal budget. If you cannot meet in person, then have a virtual meeting via to go over the key questions. Key Questions to go over with the PI: o Will all the personnel listed in the application budget still participate and at what level of effort and salary recovery? o Are there any students or postdocs? o What types of supply and equipment costs are expected? o Who is authorized to purchase? o Are there Subawards? o Are there Consultants? 4

5 o Are there costs that benefit more activities than just the sponsored award? If so, how should the costs be allocated? Make sure to document the conversation by a follow up or some other means. Sponsored Award Personnel Each paid employee, including student employees, has a payroll form that shows their salary rates, the salary percentage distributions to individual sponsored award and other FAS accounts, and other information. The percentage of salary distributed to a sponsored award account represents the percentage of the employee s total University effort that is being charged to or cost shared with the sponsored award. Salaries charged to a sponsored award are referred to as salaries recovered; salaries cost shared are sometimes referred to as unrecovered.. Salary recovery = Effort x Institutional Base Salary or awarding agency cap, whichever is less. It is important to remember the various types of personnel expenses and how the University of Chicago documents the compensation. o The most common types of funding are: salary/wages stipends (assistance payments to students and post docs in a non employee research status) o The most common personnel types are: Faculty Other Academics Staff Students Postdocs Consultants Faculty and Other Academics (OA) Their payroll forms are submitted to the Provost Office, not University Human Resources. o When a new grant account is created, the PAF (Personnel Action Form) of the faculty/oa member needs to be updated with the new account number information. Faculty in the BSD have 12 month (4Q)calendar appointments. Most other faculty in Humanities, College, PSD, SSD and professional schools have 9 month (3Q) academic appointments. o Summer salary appointments of up 2.5 months are available to 9 month appointees with these restricitions: Compensation for a full time summer month can be no greater than 1/9 th of the academic year appointment salary. The amount charged to sponsored awards can be no more than 95% of the summer month payment; at least 5% of the payment must be charged to other University funding sources. 5

6 If the faculty member takes a vacation time during the summer salary payment month, the salary payment must be proportionately reduced. Other Academics generally have 12 month appointments. o If there appointment is as a Research Associate (Assistant Professor) or with the other professorial ranks, they are PI eligible. o Research Associates (RAs) with Instructor or no academic rank are not PI eligible. o Note that for the BSD, the RA appointment titles are not generally used. Staff can be categorized in many ways. One way is t0 categorize them as benefit eligible or ineligible: o Benefit eligible staff positions are those that are expected to last more than a year and have a 20 or more hour workweek schedule and are permanent, while o Non benefit eligible staff are those positions that are expected to last less than a year and have less than a 20 hour workweek schedule. Postdoctoral ( Postdoc ) Appointees o Postdocs are individuals who have received a doctoral degree or equivalent and are engaged in a temporary and defined period of mentored advanced training to enhance the professional and research independence needed to pursue his or her chosen career path. o UC postdoc researcher policy manual o There are 3 types of UC postdocs: Postdoctoral Scholar employees of the University paid a salary Postdoctoral Fellow who are paid a stipend by extramural agencies and are not employees of the University. Clinical Fellow employees of the University of Chicago Medical Center who are in training, also known as Residents and Interns. They generally do not do research, unless their specific sub specialty has a research requirement. Most common interaction with UC is on NIH postdoc training grants. Students o 2 types on campus. Undergraduate students enrolled in the College Graduate students enrolled in a professional school or graduate program. o Full time University staff may not also be full time UC students and vice versa. 6

7 o o Fringe benefit charges are not charged against employee salaries if the employee is also a full time registered student. Each academic division and professional school has policies and procedures on paying postdocs and graduate students. For specific information, please contact the deans offices or Web sites they maintain. Setting up salary and wage and stipend payments through Payroll After reviewing the proposal budget with the PI, the first task is to set up in Payroll the personnel to be charged to the award accounts. There are 2 payrolls, the monthly and the biweekly payroll: o Monthly paid once a month on the last workday of the month The pay period begins on the first calendar day of the month and ends on the last calendar day of the month. The salary amount listed on the employee's current Personnel Action Form (PAF) will continue to be paid each month until the assignment end date is reached. o Biweeky Regular employees hold jobs that will last more than one year Temporary employees have positions that will last less than one year not eligible for paid absences or fringe benefits Biweekly employees will be paid every two weeks. The pay period is two weeks long and begins on Sunday and ends on Saturday. Paychecks are issued on the Friday following the end of the pay period. If the pay date falls on a University holiday, then paychecks will be issued the day prior to the University holiday. FAS payroll related account and subaccount numbers o All payroll forms must contain a valid 10 digit Financial Accounting System (FAS) account numbers. For a 10 digit account number to be valid, the 6 digit account number must have been created in FAS and be currently active (i.e., it is not in a delete status) and a valid subaccount, i.e., a subaccount value that falls within the range of valid subaccount numbers: o as follows: SUBACCOUNT DESCRIPTION Faculty 7

8 Other Academic Professional Supervisory/Managerial/Administrative Technical Service/Trades Clerical Nonunion Clerical Union Research and Teaching Assistants 1801 Graduate Research Assistants (Type B) 1802 Teaching Fellows All other research/teaching assistants Personal Action Form All salary distribution changes are made on the PAF. o All current employees have a PAF on file with their departmental payroll/human resources office. The Personnel Action Form (PAF) o Serves as a confirmation document o Is used by department to submit employee or assignment updates such as: Assignment dates and Rate changes Hour changes Personal/Demographic changes o Informs the department if employee holds other assignments at the University. o Furnishes complete personal data profiles to departments. o Salary distribution changes To enter a salary distribution, you need to have the the correct 10 digit FAS account number. Once you have the 10 digit account numbers, PAFs can be updated for each position that will be charged to the award. Generally speaking, the department human resources person will do this but will need instructions from you. Salary recovery: General division and school policy is that the amount of salary recovered should be proportional to the effort expended. o Salary recovery is based on the individual s institutional base salary. o Institutional base salary includes the contractual base salary and clinical, term and administrative allowances. It excludes clinical bonus payments. o Please note that many faculty in the BSD may have more than one PAF 8

9 One for each component of their salary and thus you need to update each PAF with the new distribution. NOTE on NIH salary caps: The NIH salary cap is a pay rate cap. Monthly salary charges to an NIH award must not exceed the monthly pay rate cap. o To calculate the maximum NIH monthly rate of pay, devide the annual NIH pay rate cap ($196,700 for calendar year 2009) by 12. PAF Salary Distribution Examples: 1. Dr. Smith has a 12month appointment and total compensation of $150,000 and 50% effort and salary recovery on his NIH grant that begins on 7/1/2009. His salary distribution on the PAF would be: Account No. Earn Amount (Term only)* Percent Start End XXXXX % 7/1/2009 6/30/ % 7/1/ /99/ PI Dr. Smith has a 12month appointment and total compensation of $250,000 and 50% effort and salary recovery on his NIH grant that begins on 7/1/2009. The NIH Salary cap is $196,700. His NIH capped salary recovery would be 50% X = $98, ,350/250,000 = 39.34% of his total salary His salary distribution on the PAF would be*: Account No. Earn XXXXX 1000 Amount (Term only)* Percent Start End 39.34% 7/1/2009 6/30/ % 7/1/ /99/9999 (*In both examples, the Amount (term only) is left blank as he does not have a term appointment.) Example for a 9 M appointment PI Dr. Grape has a 9 month appointment and total compensation of $190,000 and 50% effort and salary recovery on his NIH grant that begins on 7/1/2009. His salary distribution on the PAF would be: 9

10 Account No. Earn Amount (Term only) Percent Start End XXXXX % 7/1/2009 6/30/ % 7/1/ /99/9999 Example for a 9 M appointment with Salary Cap PI Dr. Grape has a 9 month appointment and total compensation of $290,000 and 50% effort and salary recovery on his NIH grant that begins on 7/1/2009. The NIH Salary cap is $196,700 (16, /M). His NIH capped salary recovery would be 50% X = $98, ,350/290,000 = 33.91% of his total salary. His salary distribution on the PAF would be: Account No. Earn Amount (Term only) Percent Start End XXXXX % 7/1/2009 6/30/ % 7/1/ /99/999 Summer Salary Faculty with 9 month appointments who are working on sponsored awards during the summe may receive summer salary pay in the form of an extra service payment. University policies surrounding such pay include the following: o They may receive up to 2.5 months of summer salary. o No more than 95% of the salary payment may be charged to sponsored awards. o It is essential that the proportion of the faculty member s effort spent on the individual sponsored awards is at least equal to the percentage of salary charged to the individual awards. o Faculty are prohibited from being on vacation during the same month for which they are receiving a summer salary payment unless there is a proportionate reduction in the summer salary pay. Faculty are prohibited from traveling on University business other than the business of the sponsored awards that their summer salary is being charged to. PAF Salary Distribution Examples: PI Dr. Apple has a 1 month summer salary appointment and an annual institutional base salary of $114,696. He will have 1 month summer salary on his NSF grant that begins on 7/1/2009. The maximum summer salary month payment is 1/9 th of Dr. Apple s annual compensation ($114,696/9 = 10

11 $12,744). The maximum that can be charged to sponsored awards is 95% ($12,744 x 95% = $12,106.80). The distribution that one would enter onto the extra service form would be as shown below. Reason Code: 3007 Date of Extra Service: Begin 07/01/2009 End 07/31/2009 Amount $12, Amount Account Number Amount Account Number 1. $12, $ Postdoctoral Appointees One of the more common types of grants is an individual postdoctoral fellowship. o It is important to review the allowable costs since there are 2 options for funding postdocs who hold postdoctoral fellowships. They can be paid a salary as an employee (postdoctoral scholar) if the grant allows for employee compensation, or they can be paid a stipend as a trainee if the grant limits funding to nonemployee trainee positions. Postdoctoral Fellows o Stipend Payments = UC Trainee o Funding = Fellowship or Training Grant o Subaccount 8370 Postdoctoral Scholars o Salary Payments = UC Employee o Funding = Research Grants o Subaccount 1200 Postdoctoral Researcher on an NIH Fellowship PI Dr. Apple is a BSD postdoctoral fellow, a non employee position, with an NIH NRSA F32 fellowship (FAS account no ). As NIH individual fellowship awards pay only stipends, in this example, Dr. Apple s appointment will be as a postdoctoral fellow. His total stipend including University supplementation is $50,000. He has a total of 5 years of experience and thus would be at YOE (Years of Experience) Level 4 ($45,504) (see files/not OD html for NRSA stipend levels). His stipend distribution on the PAF would be: Account No. Earn Amount (Term only) Percent Start End % 7/1/2009 6/30/

12 2 XXXXX % 7/1/ /99/999 Postdoctoral Researcher on a non federal Fellowship PI Dr. Orange is a PSD postdoctoral scholar, an employee position, with a Cancer Research Institute (CRI)Fellowship, FAS This particular funding agency will pay either a salary or a stipend and up to $5000 in fringe benefits and/or health insurance. Because Dr. Orange has is an employee, i.e., a postdoctoral scholar, the award should be charged a salary expense instead of a stipend expense. Dr. Orange s has 5 years of experience. His current salary of $45,504 is consistent with the NRSA stipend levels for an individual with that experience. (See files/not OD html for NRSA stipend levels.) His distribution on the PAF would be: Account No. Earn Amount (Term only) Percent Start End % 7/1/2009 6/30/2010 Note: The benefit costs on Dr. Orange s salary will total $11, ($45,504 salary x 24.7% benefit rate). Because the award limits the benefit charges to $5,000, the excess benefit costs will have to be cost shared. Other Employee Payroll Distributions: Other employee distributions on research accounts follow the same principles as those followed for academic employees. Other employees may be charged up to 100% on a sponsored account if that is all that they are working on. Just as with faculty, the level of salary recovery is proportionate to the level of effort. Jane Doe, Research Technician for Dr. Apple will be working on his NIH grant (FAS account no ) that begins on 7/1/2009. Jane s effort distribution will be 50% to the NIH grant and 50% to an existing NSF grant (FAS account no ). Her salary distribution on the PAF would be: Account No. Earn Amount (Term only) Percent Start End % 7/1/2009 6/30/ % 7/1/2009 6/30/2010 Cost Sharing Salaries Salaries used to satisfy mandatory cost sharing other than mandatory cost sharing caused by the NIH pay rate cap and salaries used to satisfy voluntary committed cost sharing are charged to FAS associate accounts that are used to record an awards cost sharing expense. These cost sharing accounts should appear on the PAF of any individual whose salary is being cost shared. 12

13 To refresh your memory on the different types of cost sharing (mandatory, voluntary committed and involuntary), see Module 3. Other recurring expenses Besides personnel, other costs are required for a sponsored award s activity. It is important to review the agency guidelines, award application and award budget to make sure anticipated costs are allowable. Allowable costs must be: o reasonable o allocable o consistently treated, and o conform to awarding agency and University limitations Using the application budget along with the FAS ABR codes will assist in planning the expenditures. Subaccount Pools: 0990 Poll for subaccount 1000/8599 cost 0999 Pool for personnel costs 2000 Pool for subaccount 21000/8599 costs 2001 Pool for services 5000 Pool for supplies 6000 Pool for equipment 7000 Pool for travel 7600 Pool for other general costs 8300 Pool for training expenses 9900 Pool for unallowable costs Supplies Purchases from outside the University are done through the University s BuySite application < BuySite is the University system for creating, submitting and approving orders If an an order s cost is to be distributed to two or more accounts, then it s important to enter each 10 digit accounts along with a percentage that indicates the percentage of the total cost to be charged to that account. Purchases from stores or recharge centers inside the University Stores or recharge centera may have their own own ordering system. Payments are made via the Interdepartmental Order Form 62 or its electronic equivalent. < form62/index.shtml> Equipment Equipment expenses must be charged to a FAS subaccount that falls within the 6001/6999 subaccount range. Purchased equipment costs are charged to subaccounts in the 6001/6199 and 6300/6999 range, while constructed equipment expenses are charged to the 62xx subaccount range. Using the correct subaccount is important not only to properly identify the 13

14 equipment expense but also to ensure that the equipment expense is excluded when FAS assesses indirect cost charges. Equipment is defined as: o an item of nonexpendable, tangible personal property o having a useful life of more than one year o an acquisition cost that is $5,000 or more Equipment can be purchased or constructed at the University. Purchased equipment cost includes: o freight o in transit insurance o installation o any modification or accessories necessary to make the equipment usable Constructed equipment cost includes: o Materials purchased to construct the equipment item o Non University labor and University labor cost included in University recharge center billings. Other University labor costs are excluded. Equipment replacement parts should not be charged to an equipment subaccount. Instead, they should be charged to the appropriate supply subaccount. Some non federal agencies may have a different definition of equipment. If so, you will need to structure your use of supply subaccounts to capture any required reporting of equipment that does not meet the University s definition of equipment. Equipment acquisitions should be discussed and planned with the PI at the beginning of the award. Acquisitions in the last three months of an award should be avoided since auditors will question how such acquisitions could benefit the award so near its end. Much more information about equipment and property management can be found in the University s Property Management Manual < Subawards Subaward and sponsored consulting agreements are two of the more complicated aspects of post award management. o Generally, these arrangements are proposed in the preaward stage of the application. o Once the application is awarded, it is important to discuss with the PI the subawards and consulting agreements. URA has a full time dedicated staff member devoted to creating and amending subawards and consulting agreements. A subaward is a formal agreement between the University and another legal organization. o The University of Chicago is the prime recipient. o The organization we are collaborating with is the subrecipient. 14

15 The University enters into these agreements when a substantive portion of the workscope outlined in the prime agreement is conducted at another institution. o A subaward normally involves collaboration with another educational or research institution but may be entered into with any organization outside the University. Subrecipient Has responsibility for programmatic decision making. Has responsibility for adherence to applicable federal compliance requirements (OMB circulars, FARs). Subrecipient PI may be co author on publications and may seek patent protection for inventions. The subaward and subcontract labels are used interchangeably at the University. Some would say, however, that technically the subcontract label applies when the funding instrument is a contract, while the subaward label applies to all other funding instruments. But again, at the University these two terms are used interchangeably. o Whether the agreement is called a subaward or a subcontract, the underlying activities involve a legal and binding agreement between the University and another organization that defines: the period of performance workscope budget reporting other terms and conditions o And the University will flow down any award or contract terms we have in the prime award or contract to the subrecipient. When the subaward is included in the proposal and approved by the funding organization in the award document, a Subaward Agreement is prepared. o Generally URA initiates the subaward process. The Subaward Manager will draft the appropriate subaward agreement, forward it to the department administrator and principal investigator for review and approval, and obtain institutional endorsement. The document is then sent to the appropriate office at the subrecipient's institution for signature. To pay a subrecipient Subrecipients submit invoices to a department administrator (listed as the Financial Contact on the subaward contact attachment). Administrator and the Principal Investigator complete the Subrecipient Payment Authorization Form (PDF) pay auth.pdf 15

16 The administrator checks the invoice to ensure it is consistent with award budget (check also for a cost sharing expenditure report, if applicable) and the PI attests that the invoice appears reasonable in light of the subrecipient s progress reports. o It is very important for the subrecipient to communicate with the PI about the status of the work. o Subaward invoices should not be paid if the subrecipient s work is not satisfactory. The Subrecipient Payment Authorization Form, subrecipient invoice, Direct Payment Voucher and any explanations required by the Subrecipient Payment Authorization Form are sent to the Sponsored Award Accounting Section of Financial Services o It s recommended that the department administrator also keep a spreadsheet on payments made and the balance of the subaward available. FAS can keep track of 9 subawards per FAS account. o If more than 9 subawards are needed for a research activity, then additional associate accounts should be created to track the subawards. o Each subaward should be assigned a unique subaccount within the subaward range Other subrecipient post award matters All funding organizations, whether federal or non federal, require prior approval to initiate a new subaward. If the PI wants to enter into a subaward after the award has begun, a written request must be forwarded through University Research Administration for institutional endorsement and submitted to the sponsor for approval. URA performs a risk assessment of each subrecipient when new subaward modification is requested. o A risk assessment reviews the subrecipient organization to assess its ability to comply with the terms and conditions of the award that governs financial management human subjects, animals and other compliance areas. Information collected from a prospective subrecipient includes: Past audit reports and audited financial statements funding profiles past subaward performances o When a subrecipient is assessed to be risky, URA will impose provisions on the Subrecipient that are tailored to monitor the risk. Sponsored Consulting Agreements The University uses similar procedures and documentation for hiring consultants as those used for establishing subawards. 16

17 o These procedures are applied consistently to all outside sponsored awards regardless of the purpose or the source of funding. A consultant is an independent contractor ( and NOT an employee of the University. A Sponsored Consultant is defined as any person hired in a professional capacity to provide specific services under a sponsored agreement (grant, contact, cooperative agreement, etc.), bringing specific expertise needed by the project. o The consultant is generally an expert in the field. A Sponsored Consulting Agreement may NOT be executed if the individual is: o An employee of The University of Chicago in any capacity. o If an individual is a former University of Chicago employee, you must obtain approval of the Payroll Department of the Comptroller's Office prior to any form of compensation. A consultant employed under a sponsored project may be compensated for services and reimbursed for travel (including meals and lodging) and other miscellaneous expenses. o Any payment made to consultants must comply with limitations set by the University or the sponsoring organization. A Sponsored Consulting Agreement should be used to cover those situations when a specific skill or professional expertise is needed for a specified period of time. o Consulting arrangements are not a substitute for subcontracts and are not intended to be used when part of the project is performed at another institution. When engaging a consultant under a grant or contract, a Sponsored Consulting Agreement should be prepared prior to any services being performed. o The Department Administrator completes the sponsored consulting agreement package available on the URA website. o The consulting agreement must include a statement of work and a budget that breaks down the costs to complete the statement of work. The work must be conducted and completed during the performance period of the award. o The Department Administrator sends the electronic version to the URA Subaward Manager for review. URA will return the agreement if revisions or documentation are required to proceed with the agreement. A copy of the revised agreement will be forwarded to the PI for review and signature. o Two hard copies with original PI signature should be delivered to the Subaward Manager at URA for institutional endorsement. 17

18 Cost Allocation Methodologies There are three different methods by which costs can be allocated directly to sponsored awards. The method that should be selected for any one cost is a function of the exactness in which one can measure the proportionate benefit of the cost to individual sponsored awards and other University activities. Method 1: If the cost only benefits a single sponsored award, then allocate the cost entirely to that sponsored award. Method 2: If the cost benefits a sponsored award and other activities in proportions that can be reasonably estimated, than allocate the cost based upon those benefit estimates. Method 3: If the cost benefits a sponsored award and other activities in proportions that cannot easily be estimated, then allocate the cost on any reasonable basis. During the setup meeting, identify what allocation method will be used to allocate the sponsored award costs that are expected to be incurred. Recap Understand FAS basics o Account structure Ledger, account, account controls, subaccounts o Automatic Budget Reallocation features Budget pools o Accounts required for a sponsored award Master required Associate optional Communication is essential between the PI and administrtors o Pre award staff o Post award staff o HR/Academic Affairs o Others Timing is important o Setup FAS accounts, including advance accounts, and payroll distributions timely o Submit timely acquisitions through BuySite Correct setup of payroll is important Know the processes associated with o Supplies o Equipment o Subawards 18

19 o Consultants Establishing cost allocation rules is important o Distinguish between costs that solely benefit the award and those that benefit the award and other activities. o For cost that benefit multiple activities, establish cost allocation rules: Allocate based upon estimate of proportionate benefit to the sponsored award and other activities, or if that s not possible, by use of a reasonable allocation base. Acknowledgements Casey Murray Lynda Wolter Jessica Greenfield 19