1. Postaward Expenditures
Sponsored Projects & Contracting Services

2. 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

3. 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

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

5. 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

6. 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.

7. 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

8. 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)

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

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

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

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

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

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

15. 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.

16. 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

17. 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

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

19. 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

20. 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.

21. 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

22. 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

23. 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

24. 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

25. 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

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

27. 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?

28. 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

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

30. CASE STUDIES

31. Case Study – Calculate the Cost Transfer
You need to remove the total deficit of $500 on account
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 to account
IDC on the account is 26%
How much TOTAL expense will post to account ?
Account
$ Salary
$ ERE %
$ Sal + ERE
$ IDC % %
$ TOTAL
Account
$ IDC % %
$ TOTAL

32. Cost Transfer Answers
Account
Account

33. 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?

34. 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?

35. 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?

36. 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?

37. Case Studies - Travel
You receive an 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?

38. 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?

39. 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?

40. 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?

41. 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?

42. 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?

43. 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?

44. 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?

45. 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

46. 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

47. 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

48. Thank You!