Postaward Expenditures Sponsored Projects & Contracting Services

Objectives Evaluating risk level of expenditures Understand how to properly justify and document Identify the UAccess Financials documents that SPCS reviews and what we look for Apply knowledge to real cases

Federal Cost Allowability Reasonable Allocable Conforms to terms Consistent Reasonable Necessary Arm’s length bargaining: a transaction in which the buyers and sellers act independently of each other and have no relationship to each other. The prudent person test: a sound business decision made by a prudent person under the circumstance prevailing at the time. Allocable Incurred specifically for a project Chargeable or assignable to a project in proportion to the benefit received Reasonable allocation basis without undue effort or cost May not shift costs to eliminate deficit or for convenience Documentation Conform to limitations or exclusions set by laws, regulations, terms of an award, and policies. Consistently treated under similar circumstance

What are examples of High Risk Costs? Audience Exercise What are examples of High Risk Costs? ?

High Risk Costs Overtime General Rebudgeting Late Cost Transfers > 120 Days After End Date Equipment not Budgeted Purchases near term Computers Equipment Relocation Costs Travel During a period with no payroll Allocated to multiple awards over long period Foreign Excessive PI travel to workshops/conferences

Documentation Expenditures on Federal projects must be supported by a business purpose. It can either be in the proposal budget justification, or accompany the transaction in Financials. The level of documentation should scale with the level of risk of the cost.

SPCS Transactional Document Review SPS reviews certain high risk documents for: Incurred within the budget period Available budget or backstop Clear benefit to project or business purpose Within award closeout period Spending down at or near end of project

Action List Routing Salary Expense Transfer, General Error Correction, Effort Certification routing is hard coded into Financials Other documents are setup via UAccess Financials Org Review which we can customize ourselves (and departments can for themselves)

Disbursement Vouchers When? Expired accounts Travel Example: Airline ticket purchased prior to end date

Internal Billings When? Hospitality: Business Meeting expense Special Requirements Agenda List of attendees Food allowable or pre-approved

Internal Billings (cont.) When? Capital Equipment Special Requirements Allowability on account and prior approval Titling issues

Procurement Cards When? Expense over $5,000 Expired accounts Special Requests Attach receipt Include dates Auto-Approval

Requisitions/Purchase Order Amendments When? All subawards Amount over $5,000 All capital equipment Tagged, non-capital equipment

Requisitions/Purchase Order Amendments (cont.) What? Sponsor approval/notification for subaward & equipment Equipment titling issues Closer review near end of project Cost Allocation

A. Yes B. No C. I can’t remember. Question for the Audience Does SPCS review all transactional documents for each sponsored account? A. Yes B. No C. I can’t remember.

On all 3XXXXXX and 4XXXXXX accounts Only on Expired SPCS accounts Question for the Audience When does SPCS review Disbursement Vouchers? On all 3XXXXXX and 4XXXXXX accounts Only on Expired SPCS accounts Only on Federal or Subfederal accounts On all university accounts

Question for the Audience Which item(s) is/are required for Internal Billings for Business Meetings with Food? Signed affidavits by all attendees to benefit to project Pre-Published Meeting agenda List of attendees Social Security Numbers B & C only

Expense Transfers General Error Corrections Effort Certifications Salary Expense Transfers Distributions of Income and Expense When? All sponsored accounts

General Error Corrections Must be used on SPCS accounts, unless fiscal year object code balance is insufficient Used to move expense between accounts or correct an object code

Effort Certifications Effort must be certified regularly for employees paid on federal or sub-federal accounts. UA chooses to certify every six months. If effort is changed on any project, system automatically generates an SET.

Distribution of Income & Expense Should only be used for prior fiscal year transfers or when inadequate balance on object code Should be treated like a GEC: Non-timely: Requires Error Certification Timely: Explanation of reason for transfer Description: “General Error Correction” Line description: “GEC” Original Document Number

Cost Transfers: What SPCS looks for Enough funding to cover or up-to-date backstop Expense incurred within award dates Business Purpose/Explanation of reason for transfer Sponsored to Sponsored Deficit Removal Spends out account to the penny Allowable? Original Document/Reference Numbers Cost Allocation

Why does SPCS ask so many questions? Too many accounts to have detailed knowledge of each one Ensure policies are followed Uniform Guidance University Policy Sponsor Policy Mitigate audit risk/Good stewardship

An error certification PI signature What is required in all cost transfer documents? An error certification PI signature Explanation of the reason for the transfer A thank you note to your fund accountant

Which of the following is a possible audit red flag? Cost transfers that spend out to the penny Removing a deficit onto a federal sponsored account A large number of purchases at the end of the project Equipment purchased near the end of the project All of the above

Error Certifications When? (Sub)Federal – 30 days Nonfederal – 90 days Note: Payroll according to months, not pay periods.

Error Certifications (cont.) What? Questions answered Makes sense to someone unfamiliar with project Satisfy an auditor: Allowable/Benefit to project Focus on why error happened & how it won’t happen again Will you remember if audited five years later?

Calculating Cost Transfers Know the TOTAL you need to transfer This is important for both the account you are moving the expense FROM and the account you are moving the expense TO Be aware of the expenses that will move WITH the transfer (ERE and/or IDC) From the total, back out necessary expenses, if needed

Cost Transfer Calculation General Cost Transfer Calculation Expense * IDC% = IDC $ Expense + IDC $ = TOTAL Transfer SET/ECD Cost Transfer Calculation

CASE STUDIES

Case Study – Calculate the Cost Transfer You need to remove the total deficit of $500 on account 4005000 The only expenses are from Salary for a Full Benefit Employee (ERE Rate 31.2%) IDC on the account is 53.5% How much Salary will you be removing? You are transferring the Salary you removed from account 4005000 to account 3006000 IDC on the account is 26% How much TOTAL expense will post to account 3006000? Account 4005000 $248.27 Salary $77.46 ERE 31.2% $325.73 Sal + ERE $174.27 IDC % 53.50% $500.00 TOTAL Account 3006000 $84.69 IDC % 26.00% $410.42 TOTAL

Cost Transfer Answers Account 4005000 Account 3006000

Case Studies - Subawarding You are the fiscal officer for a project that has three co-investigators. A few months after the project is awarded, you find out one of the investigators is moving to another institution, but still wishes to complete his scope of work at his new institution. Is this possible? If so, what steps do you need to take to make this work? Who needs to be involved and what do those parties need to do?

Case Studies - Payroll You are reviewing your PEL’s and notice a timecard for an hourly employee that is paying them 30 hours of overtime on a grant for the two-week pay cycle. Their total hours paid is 110 hours for the two weeks. You are not sure if this is ok, what do you do?

Case Studies - Payroll Your PI stops by your office and lets you know that one of their research analysts has been working on her grant since July, but she does not think the payroll was charged. How do you determine if the expense is allowable? How do you document the correcting entry if it is?

Case Studies - Travel You are approving a travel expense report, and notice that the trip description states “for a research trip.” Is this sufficient? What other attributes on the expense report do you review?

Case Studies - Travel You receive an email from a PI asking you to prepare a travel expense report for his trip to Europe. You review the grant budget and do not see foreign travel budgeted. What do you do? Is it allowable?

Case Studies – PreAward Costs Your PI requests an account to be setup on backstop so he can start incurring expenditures before the grant arrives. What questions do you ask him?

Case Studies – PreAward Costs The grant is awarded four months later and you receive the award document from sponsored projects, along with the account setup document in your action list. What should you check?

Case Studies – Relocation Costs Your PI is recruiting a software manager for a large program project. They want to post recruiting and advertising costs for the position to national job search websites. Is this allowable? If so, what would make it allowable?

Case Studies – Rebudgeting Costs Your PI comes to you and needs a requisition created to purchase a $20,000 mass spectrometer on her grant. The equipment was not budgeted. How do you decide if the purchase will be allowable or not?

Case Studies – Costs near the end of the project While approving Pcard purchases, you notice a laptop charged to a grant that is ending in a couple of weeks. The accompanying Pcard documentation says the business purpose is “for completing research.” You aren’t sure if this is allowable, what are some questions you can ask the purchaser?

Case Studies – Costs near the end of the project You are handling receiving duties and notice a laboratory clean hood a PI has been waiting for has finally arrived. You review the packing slip and the order, and notice it was purchased on an account that expired last month. The purchase was made 25 days before the grant ended. Is this an allowable expense? What do you do?

Case Studies – Administrative Costs Your PI wants to charge paper, toner, pens, and other assorted office supplies to his project. He says the department doesn’t give him enough F&A funds back, therefore the supplies should be allowable as a direct charge since they are being used on the grant. Is this allowable? Why or why not?

Recent UA NSF Audit Findings Compassionate leave Subaward without prior approval Pre-award costs outside of 90 days Travel charged to the wrong award Campus rec fees for student participants

How do we Compare? Recent NSF Audits University of Southern California $639,479 University of Kansas Center for Research $172,030 Georgia Tech Research Corporation $62,009 University of Arizona $56,904 *Figures include direct and F&A costs

Recent NIH Findings University of Louisville – $1.3 million for administrative costs University of California San Diego – $202,000 of administrative costs University of North Carolina - $353,000 of administrative & unallowable costs University of Colorado - $1.2 million of unallowable costs *Figures include direct and F&A costs

Thank You!