Sponsored Programs at Penn Module 2 Proposal Preparation, Budgeting and Submission

1. Sponsored Programs at PennModule 2Proposal Preparation, Budgeting and Submission

2. Agenda • Budget preparation and construction • Cost-sharing considerations • Intellectual property • Regulatory affairs • IACUC • IRB • Proposal routing and review • Export Controls • Questions?

3. Where Do You Start? • Gather the Facts • Talk to the Principal Investigator (PI) • What is the Scope of Work? • Who is the Sponsor? • Where will the work be performed? • Collaborators? • Consultants?

4. Sponsor Guidelines • Instructions and Contractual Terms • Requests for Proposal/Quote (RFP/RFQ) • Requests for Application (RFA) • Funding Opportunity Announcements (FOAs) • “Unsolicited” Applications • Send sponsor guidelines, instructions, contractual terms, etc., to Research Services

5. Cover Page • PI Name • Title • Name of Grantee • Trustees of the University of Pennsylvania • Period of Performance • Amount Requested • Required Signatures

6. Preparing the Budget • Costs requested in proposal budget must: • Be Allowable (Factors used in determining) • Allocable • Reasonable • Consistently Estimated • Directly benefit the proposed project Costs must be necessary for the performance of the award (OMB Circular A-21); SPP #2108, #2110, #2138

7. Regulatory guidance • CAS 501 (appendix OMB A21) • “The purpose of this standard is to ensure that each educational institution's practices used in estimating costs for a proposal are consistent with cost accounting practices used by the educational institution in accumulating and reporting costs.”

8. Other considerations • Sponsor guidelines and limitations • Salary caps • F&A limitations • Direct cost or total cost limits • Expense category exclusions • Recover F&A as direct costs from non-governmental sponsors • SPP #2138 Direct Cost Expenditures for Non-Governmental Agencies • May be School-specific rules

9. Preparing the Budget (Salary) • Salary requests are expressed as % effort or person months • Plan realistically • Determine the percent of effort for all personnel needed to conduct the project • Downward adjustments of effort may need sponsor approval • Percent of effort=Percent of salary requested • Cost sharing is discouraged • Avoid hourly rates • Cannot usually charge clerical salaries or administrativecosts directly

10. Allowability of clerical and/or administrative staff expense • Generally part of F&A costs. • Possible exceptions (see OMB A21, Exhibit C): • Large, complex programs (e.g., Center grants). • Epidemiological studies, clinical trials. • Scheduling seminars/conferences attended by large numbers of participants. • Individual projects requiring project-specific tasks such as database management, human and animal protocols, etc.

11. Preparing the Budget (Benefits) • Fringe Benefits are charged as a % of Salary • As of 7/08/08, rates on federally sponsored projects: • Full-time employees – 29.2% • Part-time employees - 9.7% • For non-Federal sponsors, add Spouse and Dependent Tuition Benefit (2.1% ) for full-time employees • Current F&A and benefits rates

12. Preparing the Budget (Equipment) • Definition • “Equipment” costs $5,000 or more per item, and has a useful life of more than 1 year • Includes computer software that meets this definition (capitalized computer software). • Accounting Policy #1106.0 • Justification • Why is this item necessary to support the science? • When is it necessary? • Availability • Is the equipment available elsewhere in the University? • Competitive Bid Requirement

13. Preparing the Budget (Office Supplies) • Generally not treated as direct costs. • Can be allowable if specifically related to the project. For example: • Specific aim of the project is to create a manual or other instructional media. • Extensive human subjects data accumulation, questionnaires, etc., is required. • Must be necessary for conduct of project • OMB Circular A-21, Exhibit C

14. Preparing the Budget (Travel) • Usually restricted to employees • Domestic • Foreign • Fly America Act if Federal $$ • May require prior approval even if in budget

15. Preparing the Budget (Patient Care) • Defined in rate agreement:“…hospitalization and other fees associated with patient care whether the services are obtained from an owned, related, or third-party hospital or other medical facility…” • Excluded from MTDC base and F&A calculations.

16. What is not included in patient care? • Subject reimbursement and travel. • Costs of ancillary tests performed outside the hospital on a fee-for-service basis. • Costs accumulated in service centers at Penn, such as in Radiology for research patient care. • Consulting physician fees. • All of the above are “other” or “consultant” expense.

17. Preparing the Budget (Subcontracts) • Budget, including F&A costs • Copy of F&A rate agreement • Statement of Work (SOW) • Cover page/Letter of Intent with Authorized Signature • Reps/Certs required by sponsor

18. Preparing the Budget (Consultants) • Penn staff usually cannot be included in this category • If applicable, must coordinate payment through Penn Payroll Office. • Consultant’s letter of intent and cost (not on “university” letterhead) • All costs related to the consultant are usually accumulated in this category. • Statement of Work • Consortium agreements typically used if consultants are identified as Key Personnel.

19. Preparing the Budget (Other Direct Costs) • Service Center charges • Tuition and Fees • Post Doctoral Health Insurance • Publication Costs • Protocol Review fees, when appropriate • Rent, when appropriate, but excluded from MTDC. • Animal per diem. • Subject compensation and travel SPP #2110 Federal Direct Cost Expenditures; SPP #2138 Direct Costs Expenditures for Non-Government Organizations

20. Preparing the Budget (F&A Costs) • F&A = Overhead = Indirect Costs • Pays for many costs that cannot be allocated to a specific project, i.e. utilities, payroll and other support services, etc. • The “Colleges and Universities Rate Agreement” contains the federally negotiated F&A rates F&A usually expressed as a % of a base • Modified Total Direct Cost Base (MTDC) • Excludes equipment, patient care costs, student tuition, and fees, alterations and renovations, rental of off-site facilities and the portion of each sub-award in excess of $25,000 • Check sponsor guidelines for appropriate base

21. Preparing the Budget (F&A Costs) • Which rate to use? • Research rates (on- and off-campus) [57.5% & 26%] • Certain DOD Contracts [59.9%] • Instruction [52%] • Other Sponsored Activities (on- and off-campus) [36% & 26%] • Examples: health or community service projects, seminars, conferences, exhibitions, lecture programs • Clinical Trials [26% Total Direct Costs (TDC)] • Corporate Contracts [59.9%] • Current agreement

22. When is the offsite rate applicable? • Use this rate whenever activity will occur for 3 months (or 25%) or more at a facility not owned by the University. • Consider preparing a split-rate budget when appropriate. • Remember that rent can be a direct charge when using the off-site rate. • Rent is excluded from MTDC and F&A calculations.

23. Don’t overlook • Are there humans involved? • Subject compensation and travel? • Related patient care costs? • Equate costs proposed to research plan, especially with the consents. • Are there animals involved? • Prepare detail cost estimate: included shipping and box charges. • Animal per diem? • Equate costs proposed to research plan.

24. …and more • Are there large pieces of equipment? • Installation and set-up included? • Maintenance contracts? • Space available or renovation costs included? • Provide a quote. • Are there pre- and or post-docs? • Tuition included? • Excluded from MTDC and F&A. • Health insurance costs listed? • Not excluded from MTDC.

25. Reasons for carefully preparing the budget • Reduces the possibility of significant budget cuts by the sponsor. • Aids post-award management. • Aids the department in budget planning. • Significant budget changes are interpreted by sponsors as a change in scope!

26. Budget Justification • Each line item usually requires specific justification. • Unusual or extraordinary expenses such as equipment, clerical salaries and administrative expenses, may require additional justification. • Check sponsor guidelines for requirements.

27. Cost sharing Considerations • Specific portion of the project cost not funded by the sponsor • Types • Mandatory • Required by sponsor • Voluntary committed • Not required by sponsor but Penn PI promises to provide cost-sharing • Matching or In-Kind • Some sponsors require University to match funds (i.e., 50/50) or provide “in-kind” funds.

28. Cost Sharing Considerations • Record-keeping obligations • What is allowable • Can’t use federal $ without prior approval • Can’t use the same $ for two different projects • Time period requirements • Cost Sharing $ subject to the same allowability rules as award • Department needs to provide funding • ORS needs to account for separately and report cost sharing SPP #2119 Cost Sharing/Matching

29. Cost Sharing Considerations • Cost Sharing that is proposed or required must be indicated on the Transmittal Form • ORS Cost Share form must be attached detailing proposed cost share • ORS cost-share form • List source of funding for the cost share • Complete form, submit with proposal

30. Specific Agency Requirements (NIH) • Modular proposals • Funding increments of $25K for max. of $250K in direct costs • Proposals over $500,000 in any one year • Calculated on direct costs only • Must have prior approval in writing 6 weeks before submission • Data sharing plan requirement • Salary cap • Type size requirement & page limitations NIH WILL RETURN NONCOMPLIANT APPLICATIONS WITHOUT REVIEW

31. Specific Agency Requirements (NIH) • Key Personnel • Individuals who contribute to the scientific development or execution of the project in a substantive, measurable way, whether or not salaries are requested • Human Subjects training certification • Conflict of Interest declaration for all Key Personnel • Other Significant Contributors • Individuals who have committed to contribute to the scientific development or execution of the project, but are not committing specified measurable effort

32. Penn Participation Agreement • Intellectual Property Participation Agreement • Required of ALL salaried participants, adjunct & emeriti faculty, and students (Bayh-Dole Act& UniversityPatent Policy) • University will not process proposals for PIs who have not signed • Departmental responsibility • Found at Research Services website • http://www.upenn.edu/researchservices/pdfs/participation.pdf

33. PI Submits Protocol • IACUC • IRB • Regulatory Approvals

34. Office of Regulatory Affairs • Administers • Institutional Review Board (IRB) • Institutional Animal Care and Use Committee (IACUC) • Provides Research Services with approval status for all protocols

35. Institutional Review Board • Protects the rights and welfare of human research subjects • Authorized to approve, require modifications in, or disapprove all research activities involving human subjects

36. Human SubjectsApproval Requirements & Timelines • Approval of a human subject protocol for a new application is not required at time of submission • Unless mandated by sponsor • Approval can be “Just-in-Time” for NIH • Human subject protocols and appropriate education certification • Required to be in place prior to the awarding of a new project

37. Human SubjectsApproval Requirements & Timelines (cont.) • For non-competing continuations the approval date must not be earlier than one year before the start date for which the progress report is submitted • If the protocol approval date does not meet this criteria the non-competing application will be delayed

38. Institutional Animal Care and Use Committee (IACUC) • Reviews and approves the care and use of animals in research

39. Use of AnimalsApproval Requirements & Timelines • Approval of an animal subject protocol for a new application is not required at time of submission • Unless mandated by sponsor • Approval can be granted “Just-in-Time” for NIH • Non-competing continuation applications must have a valid approval date at the time of submission

40. PI and BA Submit Proposal • PI and Business Administrator (BA) develop budget • Participation Agreement signed • Transmittal Sheet is completed • Appropriate departmental signatures secured • Submit proposal to Dean’s Office • Regulatory Approvals

41. Research Services Review • Regulatory Issues • Determine Type of Award • F&A Cost Review • Conflict of Interest • Review Transmittal Form for Accuracy & Completeness • Cost Sharing

42. Proposal Routing and Submission • The Transmittal Form • Internal Form • Do not mail to sponsor • Uses • Departments, make commitments project is within total program and academic objectives of department • Deans, make commitments project consistent with the total program objectives of the school and commitments for project (including any cost sharing/matching funds are acceptable • Research Services uses it to create funds; accuracy matters • Used as a means of managing regulatory issues

43. Names and Contacts Fund Attributes Type of Project and Proposal Title Contacts Period of Performance Requested Budgets Subaccounts instructions and worksheet F&A Rates Cost Sharing instructions & form RFP Subcontractors Facilities and Space Regulatory Approvals Conflict of Interest Signatures Proposal Routing and Submission(Transmittal Form)

44. Proposal Routing and Submission • Approvals • If project includes faculty from multiple schools/departments • Plan for additional time to secure appropriate signatures • If project includes participation from another institution • Information from the other institution must also be obtained and presented in the application • Plan for delays • Broken copiers • Electronic proposal submission issues • Administrative support assisting with multiple grant applications from multiple PI’s

45. Proposal Routing and Submission • Applications requiring additional information (financial reports) require more time • Responses to RFP’s • Contractual terms sent to Research Services as soon as possible • Policy requires 5 days • PI’s transferring from another institution should begin the transfer process as soon as they have accepted a position at Penn • Observe individual School deadlines

46. Other Considerations • Electronic Proposal Submission • All Electronic Submissions are not created equal • Read the Instructions • Does the PI or Institution need to be registered users? • Is the required technology available at the Department? At ORS? • All electronic applications must be approved by ORS before submitting to sponsor even if a paper copy with signatures is required after electronic submission. SPP #2102 Approval of Proposals

47. Other Considerations • Terms and Conditions • Must be consistent with University mission of research, education and service • No bars on publication • University owns and controls intellectual property • Federal regulations appropriate to educational institutions are used

48. Export Controls – What They Are and Key Federal Departments Involved • Regulations promulgated by various federal agencies under federal law to restrict, limit, curtail, or prevent exports of certain items to certain countries or individuals • Export Administration Regulations (EAR) Department of Commerce, Bureau of Industry and Security (BIS) • International Traffic in Arms Regulations (ITAR) Department of State, Directorate of Defense Trade Control (DDTC) • Other Departments and Agencies – Treasury, NRC, DEA, EPA, FDA, etc.

49. Export Controls – So What? How do these laws impact research at Penn? Export Control Laws are laws which prohibit the unlicensed “export” of certain controlled technologies for reasons related to national security, treaty compliance, and trade agreement. If Penn research involves these controlled technologies, Penn may be required to get U.S. government approvals before allowing: • Foreign researchers and students in the U.S. (including at Penn!) or anyone outside the U.S. who participates in such research • The sharing of research results with persons who are not U.S. citizens or permanent residents • “Export” is defined very broadly as any oral, written, electronic or visual disclosure, shipment, transfer or transmission of a commodity, technology or software/codes. Note: Server access could be an export!

50. Export Control Laws and Research at Penn General Rule: Penn, its faculty, and employees may not export to some entities certain materials and information without a license from the U.S. Government, unless an exception applies Fortunately, the majority of research at Penn will be covered under an exception to the ECL requirements. What are the exceptions?