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Published byWinfred Wilkerson Modified over 9 years ago
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Purpose To clarify award close out policy, procedures, roles and responsibilities related to Sponsored Projects from the Pre-Award perspective
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Everyone Has a Role SPAdmin SPAcct Principal Investigators Departmental/Unit Administrator
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What is the Role of SPAdmin? Understanding and assisting in interpretation of Sponsor’s requirements Effects of these requirements on department/unit Restrictions/flexibility of SPAcct to meet spoonsor’s terms University policies and procedures related to close outs
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What is the Role of SPAdmin? Negotiating subagreements Out ○ Flowdown sponsor agreements ○ Ensure reports and deliverables are received on time In ○ Ensure project is not continuing without a contract in place ○ Ensure prime monitoring expectations are being met
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What is the Role of SPAdmin? Monitoring End dates Notify PIs and departmental/unit administrators of upcoming award expirations Clarify departmental needs and sponsor expecations ○ Extension ○ Advance Accounts ○ Close Outs
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What is the Role of SPAdmin? Reporting to Board of Regents Reconciling Revenue reported (Plans) to Revenue Received
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Myths Pre-award does not need to know when a grant/contract is closed out If it’s not federal – begin and end dates don’t matter No cost extensions are not required in industry sponsored agreements We do not have to treat clinical trial contracts the same as grants Advance accounts are not allowable on contracts Residuals are allowable on non-federal projects Receiving partial indirects is a justification for keeping greater than 25% residuals
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Myth 1 Pre-award does not need to know when a grant/contract is closed out BOR reporting Sponsor reporting Terms/Conditions Advance accounts
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Myth 2 If it’s not federal – begin and end dates don’t matter Consistency Liability Indemnification
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Myth 3 No cost extensions are not required in industry sponsored agreements Consistency Contract specific
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Myth 4 We do not have to treat clinical trial contracts the same as grants Maybe – maybe not
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Extension Memos Use one of the following PI must sign Provide information in red
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Extension: No Sponsor Approval Required
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Extension: Sponsor Approval Required
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Myth 5 Advance accounts are not allowable on contracts IRB fees No IRB/IACUC/IBC approvals required Work separate from approvals being conducted
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Advance Accounts Background Assigned to a sponsored project before the award or extension process is completed Most common with subcontracts Approval includes authorization to incur costs outside of the official project start and end dates Are zero balance accounts Incur expenses No budget or revenue 35 & 36 WBS advance accounts will become account number 34 accounts will be assign as 37 WBS advance accounts
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Advance Accounts Advance accounts might be appropriate if: The project start date occurs before the award process has been completed A contract extension is in negotiation and has yet to b signed by all parties Extension of awards or subcontracts are delayed pending finalization by the sponsor or the federal government Sponsor grants pre-spend authority
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Advance Account Form
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Myth 6 Residuals are allowable on non-federal projects Depends ○ Terms/Conditions Cost reimbursement vs. Fixed Price Guidelines Contracts
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Myth 7 Receiving partial indirects is a justification for keeping greater than 25% residuals Consistency Anti-Kickback Pre-award consideration – not at close-out
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Important Aspects of Revenue and Expense Summary for SPAdmin Revenue (over)/under expense Revenue Plan Life to Date Variance Total Expense Expenses
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Revenue Plan is information that is reported to Board of Regents (BOR) $100 million = Revenue not Plan Big disconnects: Clinical Trial agreements ○ number of patients recruited Adjustments need to be made, when Plan does not match Life to Date – to reflect actual funds received Plan = Amount of Award Checklists set up in SPAdmin Database Life to Date = Actual Funds Received *Note: Close outs should not be requested until all revenue is received from the Sponsor Variance = +/- the difference between Plan and Life to Date = the dollar figure that must be on the internal budget sent to SPAdmin for close out = Revenue Reported to BOR
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Revenue Formulas Example: 77,433/1.26 = 61,454.76 (Direct Costs) 77,433 – 61,454.76 = 15,978.24 (F&A Costs) * F&A rate Variance / 1.26* = Direct Costs Variance Direct Costs = F&A Costs
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Close Out Budget Fields
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Completed Close Out Budget Using the Example Provided in this Process Illustration
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Close Out Memos Use one of the following PI must sign Provide information in red
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No Adjustments = 0 (No budget Needed) = (No Residual Funds) = 0 (No Residual Funds) Revenue (over)/under expense Variance Total Expense Life to Date
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Close Out: No Adjustments
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Adjustment/No Residuals > 0 (Budget Needed - ± for amount) = (No Residual Funds) = 0 (No Residual Funds) Revenue (over)/under expense Variance Total Expense Life to Date
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Close Out: Adjustment with no Residuals
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Adjustment/Residuals <25% > 0 (Budget Needed - ± for amount) ≠ (Residual Funds) ≠ 0 (Residual Funds) × 25% = 25% threshold < 25% threshold Revenue (over)/under expense Variance Total Expense Life to Date Revenue (over)/under expense Life to Date
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Close Out: Adjustment with Residuals less than 25%
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Adjustment/Residuals >25% > 0 (Budget Needed - ± for amount) ≠ (Residual Funds) ≠ 0 (Residual Funds) × 25% = 25% threshold > 25% threshold Provide justification Revenue (over)/under expense Variance Total Expense Life to Date Revenue (over)/under expense Life to Date
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Close Out: Adjustment with Residuals Greater than 25%
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Residual Justification? Anti-Kickback Act of 1986 - Compliance If there is significant residual fund balance, i.e., an amount greater than or equal to 25 percent of the contract/grant price, at the completion of work for the contract/grant, the Principal Investigator must provide a written explanation for the substantial discrepancy between the cost to perform the contract/grant and the contract/grant price. This explanation should be supplied by the Principal Investigator to Sponsored Programs Administration, which will use it along with the information that the Principal Investigator is required to provide upon closeout of the agreement as the basis for an audit of the project.
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University Residual Policy Comparisons University of Idaho10% San Francisco State University$1,000 Georgia Southern University25% Texas A & M25% University of Pennsylvania Health System 50%
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Return Residuals to Sponsor > 0 (Budget Needed - ± for amount) ≠ (Residual Funds) ≠ 0 (Residual Funds) Variance Total Expense Life to Date Revenue (over)/under expense
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Close Out: Return Residuals To the Sponsor
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Conclusion Timely project close out/extension action is critical to: Accurate revenue reporting to BOR Comply with internal and external policy Ensure receipt of final payment Save time, money and reputation of the institution Protect against withholding of new awards campus-wide by the awarding agency Prevent suspension of payments for costs incurred on other projects funded by the same agency
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Policy References A-21 A-133 A-110 Anti-Kickback Act of 1986 42 U.S.C. 1320a-7b(b)
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