1. MANAGING SPONSORED PROJECTS FINANCIAL COMPLIANCE May 1, 2008 Office of Grants &Contracts Accounting

2. FINANCIAL COMPLIANCE You Should Understand: Key Areas of Risk Your Responsibilities Resources and Tools Available

3. FINANCIAL COMPLIANCE What are the Risks Related to Grant Awards? Misuse of funds (purchasing cards, fraud) Improper cost allocation (multiple projects) Accelerated expenditures Unobligated balances Cost transfers Restrictions on Notice of Award Financial conflict of interest Time and effort reporting Unallowable costs

4. FINANCIAL COMPLIANCE Why All The Fuss? Because of Potential Impact on MUSC  Shutdown of Operations  Fines and Penalties  Damage to University’s Reputation  Susceptibility to False Claims Allegations

5. FINANCIAL COMPLIANCE Why All The Fuss? Because of Potential Impact on You  Loss of PI Status  Debarment  Possible Criminal and Civil Charges Remember: One of our primary goals in GCA is to safeguard the University and you

6. FINANCIAL COMPLIANCE Who is Responsible? Institution? Principal Investigator (PI)? Departmental Administrator? Central Administration?

7. FINANCIAL COMPLIANCE Who is Responsible? As PI, you: Make the budgetary decisions Approve expenditures Should know special terms and conditions Approve final Financial Status Reports (FSRs)

8. FINANCIAL COMPLIANCE Who is Responsible? Tips: Always remember that the financial aspects of your grant are just as important as the science Don’t ever hesitate to question an expense on your grant

9. FINANCIAL COMPLIANCE Training What would your responses to the following questions be?  What training have you attended in the past 18 months?  Who sponsored this training?  What training programs are provided by the University?  Does MUSC have policies and procedures to ensure compliance with federal regulations? Make every effort to attend training

10. FINANCIAL COMPLIANCE Understanding Direct Costs vs. F&A Costs DIRECT COSTS  Federal Definition (OMB Circular A-21, Section D) F&A COSTS  Federal Definition (OMB Circular A-21, Section E) It is a Direct Cost, but is the cost allowable? Does the cost meet the following criteria?  Reasonable  Allocable  Allowable  Consistently Treated

11. FINANCIAL COMPLIANCE Avoiding the Pitfalls Allowable/Unallowable Expenditures Know what charges are not applicable to your grant If you have concerns of allowabilty or allocability question your Departmental Administrators Become familiar with costs that can and cannot be charged direct to your grant

12. FINANCIAL COMPLIANCE Avoiding the Pitfalls Cost Transfers Try to avoid having frequent transfers Understand the University’s Cost Transfer Policy Be aware of the NIH Cost Transfer Policy Question transfers off and onto your grant Make sure cost transfers are adequately justified and well documented Avoid transfers at the end of a grant spending period

13. FINANCIAL COMPLIANCE Avoiding the Pitfalls Activity Reporting Be aware of the University’s policies and understand them Submit Activity Reports on time Be able to reasonably explain how you track the amount of time spent on an award  By You  By a Trainee or Post Doc Know who your Department Coordinator is Understand how activity is reported, to whom, and how often Understand how your activity is approved Know who maintains the Activity Reports Make sure that you account for all of your activity

14. FINANCIAL COMPLIANCE Most Common Direct Costs Salaries & Fringe Benefits Equipment Supplies Patient Care Cost Travel Subrecipient Agreements

15. FINANCIAL COMPLIANCE Salaries & Fringe Combined Salary NIH Salary Cap Affiliate Salary Worksheet (Affiliate Salary - Policy/Procedure 4-3.07) Fringe Benefits – rates negotiated only for grants MUSC Online Activity Reporting https://appserve.musc.edu/effort https://appserve.musc.edu/effort

16. FINANCIAL COMPLIANCE Equipment Definition Special purpose equipment General purpose equipment Excluded from the F&A Calculation on federal awards Rebudgeting may require prior approval from the sponsor

17. FINANCIAL COMPLIANCE Supplies Materials & Supplies  Expendable items  Medical/scientific/laboratory supplies  Equipment under $5000 or a useful life > 1 yr. Office Supplies  Normally unallowable as a direct cost on federal awards

18. FINANCIAL COMPLIANCE Patient Care Costs Account Code  Most commonly used chart of accounts Inpatient and outpatient expenses Rebudgeting Excluded from F&A Cost Calculation for Federal Awards

19. FINANCIAL COMPLIANCE Travel Who can travel? Contact GCA for further assistance prior to incurring travel expenditures. Travel expenses incurred by consultants & private entities are subject to the Federal Travel Regulations http://www.gsa.gov/Portal/gsa/ep/contentView.do?c ontentId=17943&contentType=GSA_BASIC http://www.gsa.gov/Portal/gsa/ep/contentView.do?c ontentId=17943&contentType=GSA_BASIC

20. FINANCIAL COMPLIANCE Subrecipient Agreements Definition Prior approval Applicable F&A Subrecipient invoice approvals