1 The Office of Research Services The Office of Research Support Services REVISED October 2011 Sponsored Programs at Penn Proposal Budget Preparation,

1The Office of Research Services

The Office of Research Support Services REVISED October 2011

Sponsored Programs at Penn

Proposal Budget Preparation,

Budgeting Using PennERA and

Routing & Approval



Where Do You Start?

• Gather the Facts – Talk to the Principal Investigator (PI)

• What is the Scope of Work?• Who is the Sponsor?• Where will the work be performed?• Collaborators?• Consultants?



Sponsor Guidelines

• Instructions and Contractual Terms• Requests for Proposal/Quote (RFP/RFQ)• Requests for Application (RFA)• Funding Opportunity Announcements (FOAs)• “Unsolicited” Applications• Send sponsor guidelines, instructions,

contractual terms, etc., to Research Services



Cover Page

• PI Name• Title • Name of Grantee

– Trustees of the University of Pennsylvania• Period of Performance• Amount Requested • Required Signatures



RFProposal • Government generates scope of work via

Notices/Program Announcements.

• You respond with how you will accomplish, budget and time frame.

• Contract is usual award document for RFP/RFQ while a grant/cooperative agreement is usual award document for RFA.

RFQuotationRFApplication



Budget preparation is a collaborative effort!

• Principal Investigator:– Should work with the Grants Manager to develop the

budget.– Designates others who might have input, e.g., lab

manager, research coordinator.



Reasons for carefully preparing the budget

• Reduces the possibility of significant budget cuts by the sponsor.

• Aids post-award management.• Aids the department in budget planning.• Significant budget changes are interpreted by

sponsors as a change in scope!



Preparing the Budget

• Costs requested in proposal budget must:– Be Allowable (Factors used in determining)

• Allocable • Reasonable• Consistently Estimated

– Directly benefit the proposed project

Costs must be necessary for the performance of the award (OMB Circular A-21); SPP #2108, #2110, #2138

http://www.whitehouse.gov/omb/circulars/a021/a21_2004.html

http://www.finance.upenn.edu/vpfinance/fpm/2100/2108.shtml

http://www.finance.upenn.edu/vpfinance/fpm/2100/2110.asp




Regulatory guidance

• CAS 501 (app. OMB A21, 48 CFR 9905.501)– “The purpose of this standard is to ensure that each

educational institution's practices used in estimating costs for a proposal are consistent with cost accounting practices used by the educational institution in accumulating and reporting costs.”




Other considerations

• Sponsor guidelines and limitations– Salary caps– F&A limitations– Direct cost or total cost limits– Expense category exclusions

• Recover F&A as direct costs from non-governmental sponsors– SPP #2138 Direct Cost Expenditures for Non-Govern

mental Agencies• May be School-specific rules





Preparing the Budget (Salary)

• Salary requests are expressed as % effort or person months

• Plan realistically– Determine the percent of effort for all personnel needed to

conduct the project– Downward adjustments of effort may need sponsor

approval• Percent of effort=Percent of salary requested

– Cost sharing is discouraged– Avoid hourly rates

• Cannot usually charge clerical salaries or administrative costs directly



Allowability of clerical and/or administrative staff expense

• Generally part of F&A costs.• Possible exceptions (see OMB A21, Exhibit C):

– Large, complex programs (e.g., Center grants).– Epidemiological studies, clinical trials.– Scheduling seminars/conferences attended by large

numbers of participants.– Individual projects requiring project-specific tasks

such as database management, human and animal protocols, etc.




Preparing the Budget (Benefits)

• Fringe Benefits are charged as a % of Salary• As of 6/16/11, rates on federally sponsored

projects:– Full-time employees – 31.8%– Part-time employees - 9.7%

• For non-Federal sponsors, add Spouse and Dependent Tuition Benefit (2.2% ) for full-time employees

• Current F&A and benefits rates

http://www.upenn.edu/researchservices/history.htm



Preparing the Budget (Equipment)• Definition

– “Equipment” costs $5,000 or more per item, and has a useful life of more than 1 year

– Includes computer software that meets this definition (capitalized computer software).• Accounting Policy #1106.0

• Justification– Why is this item necessary to support the science?– When is it necessary?

• Availability– Is the equipment available elsewhere in the

University?• Competitive Bid Requirement

http://www.finance.upenn.edu/vpfinance/fpm/1100/1106.0.asp



Preparing the Budget (Office Supplies)

• Generally not treated as direct costs.• Can be allowable if specifically related to the

project. For example:– Specific aim of the project is to create a manual or

other instructional media.– Extensive human subjects data accumulation,

questionnaires, etc., is required.• Must be necessary for conduct of project

– OMB Circular A-21, Exhibit C




Preparing the Budget (Travel)

• Usually restricted to employees• Domestic• Foreign

– Fly America Act if Federal $$– May require prior approval even if in budget

http://osr.unc.edu/documents/federal_travel.pdf



Preparing the Budget (Patient Care)

• Defined in rate agreement:“…hospitalization and other fees associated with patient care whether the services are obtained from an owned, related, or third-party hospital or other medical facility…”

• Excluded from MTDC base and F&A calculations.



What is not included in patient care?

• Subject reimbursement and travel.• Costs of ancillary tests performed outside the

hospital on a fee-for-service basis.• Costs accumulated in service centers at Penn,

such as in Radiology for research patient care.• Consulting physician fees.• All of the above are “other” or “consultant”

expense.



Preparing the Budget (Subcontracts)

• Budget, including F&A costs• Copy of F&A rate agreement• Statement of Work (SOW)• Cover page/Letter of Intent with Authorized

Signature• Reps/Certs required by sponsor



Preparing the Budget (Consultants)

• Penn staff usually cannot be included in this category– If applicable, must coordinate payment through Penn

Payroll Office.• Consultant’s letter of intent and cost

– All costs related to the consultant including travel are usually accumulated in this category.

• Statement of Work– Consortium agreements typically used if consultants are

identified as Key Personnel.



Preparing the Budget (Other Direct Costs)

• Service Center charges• Tuition and Fees (Research Projects)• Post Doctoral Health Insurance• Publication Costs• Protocol Review fees, when appropriate• Rent, when appropriate, but excluded from MTDC.• Animal per diem.• Subject compensation and travel

SPP #2110 Federal Direct Cost Expenditures;SPP #2138 Direct Costs Expenditures for Non-Government Organizations






Preparing the Budget (F&A Costs)

• F&A = Overhead = Indirect Costs– Pays for many costs that cannot be allocated to a specific

project, i.e. utilities, administrative payroll and other support services, etc.

• The “Colleges and Universities Rate Agreement” contains the federally negotiated F&A rates

• F&A usually expressed as a % of a base• Modified Total Direct Cost Base (MTDC)

– Excludes equipment, patient care costs, student tuition, and fees, alterations and renovations, rental of off-site facilities and the portion of each subcontract in excess of $25,000

• Check sponsor guidelines for appropriate base

http://www.upenn.edu/researchservices/pdfs/negotiated.pdf



Preparing the Budget (F&A Costs)

• Which rate to use?– Research rates (on- and off-campus) [60% & 26%]– Certain DOD Contracts [62%]– Instruction [57%]– Other Sponsored Activities (on- and off-campus) [36% &

26%]• Examples: health or community service projects,

seminars, conferences, exhibitions, lecture programs– Clinical Trials [28% Total Direct Costs (TDC)]– Corporate Contracts [62%]

• Current agreement

http://www.upenn.edu/researchservices/pdfs/negotiated.pdf



When is the offsite rate applicable?

• Use this rate whenever activity will occur for 3 months (or 25%) or more at a facility not owned by the University.– Consider preparing a split-rate budget when

appropriate.• Remember that rent can be a direct charge

when using the off-site rate.– Rent is excluded from MTDC and F&A calculations.



Don’t overlook

• Are there humans involved?– Subject compensation and travel?– Related patient care costs?– Equate costs proposed to research plan, especially

with the consents.• Are there animals involved?

– Prepare detail cost estimate: included shipping and box charges.

– Animal per diem?– Equate costs proposed to research plan.



…and more• Are there large pieces of equipment?

– Installation and set-up included?– Maintenance contracts?– Space available or renovation costs included?

• Provide a quote.• Are there pre- and or post-docs?

– Tuition included?• Excluded from MTDC and F&A.

– Health insurance costs listed?• Not excluded from MTDC.



Budget Justification

• Each line item usually requires specific justification.

• Unusual or extraordinary expenses such as equipment, clerical salaries and administrative expenses, may require additional justification.

• Check sponsor guidelines for requirements.



Other Considerations

• Specific Sponsor Requirements– NIH modular: ≤$250,000/year– Many non-Federal sponsors may not allow PI salary,

benefits, travel, etc.• Penn Participation Agreement



Terms & Conditions

• Terms and Conditions– Must be consistent with University mission of

research, education and service– No bars on publication– University owns and controls intellectual property– Federal regulations appropriate to educational

institutions are used



Budgeting Using PennERA Proposal Development (PD)



Budgeting Using PennERA PD

• Type of budget is automatically determined by PD during proposal setup.




• Type of budget is automatically determined by PD during proposal setup.

• Proposal creator answers questions so that PD can “select” the correct configuration.



• Sample Budget Configurations

• Typical setup – can be detail or simplified entry.

• Modified for NIH modular budget.

• Federal S2S not requiring detail budget.




• Two budget entry methods– Simplified

• Minimal data entry• Use if not a Federal system-to-system (S2S) requiring a detail budget




• Two budget entry methods– Detail

• As required by Federal sponsor’s instructions

• Can be used in any PD record



• Detail – Personnel Expense



• Detail – Personnel Detail Entry



• Detail – Non-Personnel Expense



• Detail – Non-Personnel Detail Entry



• Detail – Subcontract Expense




• Complete other sections:– F&A

• Many proposals calculate F&A automatically

• If manual entry is used, reset to autocalculation if editing expense data entry




• Complete other sections:– Cost Sharing

• Observe Penn’s cost-sharing policies

• Complete cost-sharing form– Upload Budget Justification



Routing & Submission



PI and BA Submit Proposal

• PI and Business Administrator (BA) have completed all components in PD

• Participation Agreement signed and filed in department

• Upload internal documents (e.g., subaccount worksheet)

• Proposal is certified by PI in PennERA• BA completes e-transmittal form• Record submitted to routing path for internal

review.



• What’s a routing path?

…and…



• What’s a routing path?…and…

…and…



Research Services Review• Review e-Transmittal Form &

PI certification for Accuracy & Completeness

• Regulatory Issues• Determine Type of Award• F&A Cost Review• Conflict of Interest• Cost Sharing• Terms & Conditions if

applicable• Check for electronic

submission validation issues



Purpose of e-Transmittal• The Transmittal Form

– Internal Form• Does not get submitted to sponsor

– Uses• Departments, make commitments & determine that

project is within total program and academic objectives of department

• Deans, determine that project is consistent with the total program objectives of the school and that commitments for project (including any cost sharing/matching funds) are acceptable

• Research Services uses it to create funds; accuracy matters



Proposal Routing and Submission• Approvals

– If project includes faculty from multiple schools/departments • Plan for additional time to secure appropriate approvals

– If project includes participation from another institution• Information from the other institution must also be

obtained and presented in the application• Plan for delays

– Electronic proposal submission issues– Administrative support assisting with multiple grant

applications from multiple PI’s– Broken copiers, scanners



Proposal Routing and Submission

• Applications requiring additional information (financial reports) require more time

• Responses to RFP’s– Contractual terms sent to Research Services as soon as

possible– Policy requires 5 days

• PI’s transferring from another institution should begin the transfer process as soon as they have accepted a position at Penn

• Observe individual School deadlines



Regulatory Issues

• IACUC• IRB

• PI Submits Protocol electronically for Human Subject research using the HS-ERA system and for Animals using ARIES.



Office of Regulatory Affairs

• Administers – Institutional Review Board (IRB) – Institutional Animal Care and

Use Committee (IACUC)• Provides Research Services

with approval status for all protocols



Institutional Review Board

• Protects the rights and welfare of human research subjects

• Authorized to approve, require modifications in, or disapprove all research activities involving human subjects



Human SubjectsApproval Requirements & Timelines

• Approval of a human subject protocol for a new application is not required at time of submission – Unless mandated by sponsor – Approval can be “Just-in-Time” for NIH

• Human subject protocol approval and appropriate education certification– Required to be in place prior to the awarding of a new

project



Human SubjectsApproval Requirements & Timelines (cont.)

• For non-competing continuations the approval date must not be earlier than one year before the start date for which the progress report is submitted– If the protocol approval date does not meet this

criteria the non-competing application will be delayed



Institutional Animal Care and Use Committee (IACUC)

• Reviews and approves the care and use of animals in research



Use of AnimalsApproval Requirements & Timelines

• Approval of an animal subject protocol for a new application is not required at time of submission – Unless mandated by sponsor– Approval can be granted “Just-in-Time” for NIH

• Non-competing continuation applications must have a valid approval date at the time of submission



Reminders

• Electronic Proposal Submission– All Electronic Submissions are not created equal– Read the Instructions– Does the PI or Institution need to be registered users?– Is the required technology available at the

Department? At ORS? – All electronic applications must be approved by ORS

before submitting to sponsor even if a paper copy with signatures is required after electronic submission.

SPP #2102 Approval of Proposals




Reminders continued…• Meet the specifications of

the announcement • Make it easy for the

reviewers to see that you have done so

• Awards are made to the Institution

• Only Research Services is authorized to sign on behalf of the University



Questions???

Documents

1 The Office of Research Services The Office of Research Support Services REVISED October 2011 Sponsored Programs at Penn Proposal Budget Preparation,