Presentation Transcript

1. OSP Brown Bag SessionJanuary 12, 2012

   Effort reporting, cost sharing and financial compliance Michael Anthony Management Accounting & Analysis
2. Financial Compliance Cost Accounting Standards (CAS)CAS 501 - Consistency in estimating, accumulating and reporting costs by educational institutions.CAS 502 - Consistency in Allocating Costs Incurred for the Same Purpose by Educational Institutions (Direct vs. Indirect).CAS 505 - Accounting for Unallowable Costs.ACS 506 - Cost Accounting Period
3. 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 (From GIM 23, Costing Policy beginning on Section 4, page 33) Direct Costs
4. Faculty Research associates Predoctoral and postdoctoral fellows Technicians, lab assistants, graduate students Tuition remission for graduate students Direct Costs Salaries, Wages and Fringe Benefits
5. Chemicals Laboratory supplies Computer software Drugs Books Minor equipment Uniforms Photographic supplies Tools Animals Direct Costs Supplies and Materials
6. Travel Postage Subcontracts Radioactive waste disposal Animal care Motor pool Equipment Consulting services Direct Costs Other Direct Costs Other costs specifically identified and justified in funded proposals (where normal indirect costs are “unlike”)
7. Long distance telephone costs Freight Patient care and subject cost Direct Costs Other Direct Costs Costs that are normally indirect may be charged to non-federally sponsored agreements if permitted by the sponsor’s policies/practices or are otherwise approved by the sponsor
8. Basic telephone services (such as phone installation, monthly line charges, basic instruments) Office supplies Facilities costs (such as rent, maintenance, security, utilities) Direct Costs Off-Campus Projects Only
9. Indirect Costs 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. (From GIM 23, Costing Policy beginning on Section 4, page 33)
10. Cellular phones, pagers and related service charges* Routine/administrative copying charges* Memberships Journals and subscriptions Indirect Costs 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.
11. Large complex programs Extensive data accumulation Extensive travel Manuals and large reports Geographically inaccessible Project-specific database management Graphics Human or animal protocol OMB InterpretiveStatement of July 13, 1994 Examples Where Direct Charging May Be Appropriate
12. Large complex programs Extensive data accumulation Extensive travel Manuals and large reports Geographically inaccessible Project-specific database management Graphics Human or animal protocol OMB InterpretiveStatement of July 13, 1994 Examples Where Direct Charging May Be Appropriate
13. 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)
14. Program Income Additive – Added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives (default method for research), Used to finance the non-Federal share of the project or program (cost sharing), Deductive – Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based (default method for non research), Combination of additive and deductive
15. Program Income 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.
16. Program Income 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.
17. 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.
18. Cost Sharing Overview Generally the same allowability standards apply to expenditures used to meet cost share commitments as they would if the costs were charged directly to the award.
19. 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.
20. 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. Shift When committed effort changes from being grant funded to non grant funds.
21. 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).
22. 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.
23. 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.
24. 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. 20% teaching activity and 5% administrative activity 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).
25. 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, grantee 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.
26. 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.
27. 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
28. 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.
29. 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.
30. 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.)
31. 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.
32. 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.
33. 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.
34. 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)
35. 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.
36. 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.”
37. 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 sponsor’s regulations and/or grant terms and conditions
38. 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.
39. 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
40. Resources A)On-line financial accounting system B) Grants information memoranda C) GCA on Web:www.washington.edu/research/gca/office D) OMB Circular A-21: Cost Principles for Education Institutions E) Sponsoring agency rules and regulations
41. Resources F) Monthly Research Administrator Meetings (MRAM) G) Targeted GCA assistance H) Departmental administrators and fiscal staff I) Advanced costing course GCA/OSP class Management Accounting & Analysis (FEC)