KSG/OSP Training and Information Session May 17, 2007

KSG/OSP Training and Information Session

May 17, 2007

Overview: Agenda

Welcome - Stew Uretsky

Kennedy School Sponsored Programs Overview - Matt Alper

University Office for Sponsored Programs Overview - Ethlyn O’Garro Pre-Award Administration-Proposal review and submission - Charlene Arzigian

- Jen Mahoney

-Negotiations - Sarah Holtz

-- BREAK --

Post-Award Administration-A-21 Key Concepts, Effort Reporting, New Vacation Policy - Judy Ryan

-Cost Transfers, Financial Reporting, Award Closeout - Ana Garcia

Wrap-up and Final Questions

Welcome: Sponsored Programs ManagementStrong communication and coordination between the Research Centers and/or Departments, the Research Administration Office (RAO), the Office of Financial Services (OFS), and the Office for Sponsored Programs (OSP) is essential.

Financial Reporting

Proposal Development

Negotiations

Sponsored Payment

Proposal Review & Submission

Effort Reporting

Cost Transfers

Award Close-Out

OFS

OSP RAORC/ DeptGift vs. Grant

Audits

About OFS: Who We AreAssociate Executive

Dean & CFO

Stewart Uretsky

Assistant Director of Finance

Kelly Boyle

Accounting Associate

John Caetano

Staff Assistant

Marita Terefenko

Assistant Director of

Planning & Systems

Nancy Guisinger

Associate Director for

Financial Operations

Connie Mugnai

Accounting Associate

Rashida Nisbett

Accounting Assistant

Wanda Grady


Edna Pierre


Elaine Romano

Financial Analyst

Heather Fusco

Financial Analyst

Jeff Hudson

Financial Analyst

Lorraine Kiley

Faculty Awards

IOP, WAPPP & CPL

OSP Liaison; SPOC

All other KSG Centers

About RAO: Who We Are

Matthew AlperAssociate Dean for Research

Charlene ArzigianAssistant Director

Ann Frenning KossuthWebmaster and Resource Coordinator

TBNResearch Support Coordinator

KSG SPONSORED PROPOSALSKSG SPONSORED PROPOSALSFY 2002 – FY 2006FY 2002 – FY 2006

OVERVIEWOVERVIEW FY02FY02 FY03FY03 FY04FY04 FY05FY05 FY06FY06

PIs 72 61 72 60 52

Prospectively

Processed Proposals101

50%108

63%106

65%74

62%68

58%

Retrospectively

Processed Proposals 103

50%63

37%57

35%45

38%49

42%

TOTAL PROPOSALSTOTAL PROPOSALS 204 171 163 119 117

KSG SPONSORED PROPOSALS SUBMITTEDKSG SPONSORED PROPOSALS SUBMITTEDFY 2003 – FY 2007 (Q1-Q3) OVERVIEWFY 2003 – FY 2007 (Q1-Q3) OVERVIEW

BY CENTERBY CENTER FY03FY03 FY04FY04 FY05FY05 FY06FY06 FY07FY07

Ash -- -- 3% 3% 4%

BCSIA 12% 13% 13% 18% 20%

Carr 1% 2% 4% 3% 1%

CID 8% 6% 9% 8% 10%

CPL 2% 2% 3% 2% 5%

Executive Education 4% 12% 7% 11% 13%

Hauser 9% 10% 8% 5% 1%

M-RCBG 20% 11% 13% 8% 14%

Shorenstein -- 1% 3% 3% 1%

Taubman 10% 11% 15% 10% 11%

WAPPP -- 1% 1% 0% 0%

Wiener 20% 20% 16% 24% 13%

Unaffiliated & Other 14% 11% 5% 5% 7%

TOTAL PROPOSALS 171 163 119 117 84

KSG SPONSORED PROPOSALSKSG SPONSORED PROPOSALSFY 2003 – FY 2006 OVERVIEWFY 2003 – FY 2006 OVERVIEW

BY SPONSOR BY SPONSOR TYPETYPE FY03FY03 FY04FY04 FY05FY05 FY06FY06

Federal63

37%58

36%54

45%38

32%

Non-Federal108

63%105

64%65

55%79

68%

TOTAL

PROPOSALS171 163 119 117


BY INDIRECT COST BY INDIRECT COST RATERATE FY02FY02 FY03FY03 FY04FY04 FY05 FY06

<20% 48% 36% 39% 36% 50%

20% 20% 29% 32% 24% 24%

26%Federal Off-Campus

5% 2% 4% 6% 3%

29% Federal Other Activity (Now 32%) 2% 3% 4% 7% 2%

63%, 64%, 66%

Federal On-Campus21% 26% 18% 24% 19%

Other 4% 3% 3% 3% 2%

TOTAL PROPOSALS 204 171 163 119 117


PROPOSALS & PROPOSALS & OUTCOMESOUTCOMES FY02FY02 FY03FY03 FY04FY04 FY05 FY06

Funded Awards 114 97 78 74 72New Proposals

Submitted158 123 126 98 96

Yield Rate* 72% 79% 62% 75% 75%

* Yield Rate refers to new funded awards as a percentage of all new proposals submitted in a given fiscal year.

KSG TOTAL SPONSORED PROGRAM EXPENDITURESKSG TOTAL SPONSORED PROGRAM EXPENDITURESFY 2003 – FY 2007 (Projected)FY 2003 – FY 2007 (Projected)

FY03FY03 FY04FY04 FY05 FY06FY07 (Proj.)

Sponsored Program

Expenditures ($m)*

$28.4-15%

$25.0-12%

$24.90%

$26.1+5%

$26.4+1%

Federal Sponsors$9.80%

$8.5-13%

$10.4+22%

$11.8+13%

$9.0-24%

Non-Federal Sponsors

$18.6-21%

$16.5-11%

$14.5-12%

$14.4-1%

$17.4+21%

* These data reflect only those proposals submitted and awards accepted by OSP; the percent change from the prior fiscal year is indicated.

Q: Is this a “Gift” or is it a “Sponsored Agreement?”

Gifts - administered via Harvard University Recording Secretary’s Office (RSO)

• In general, a gift does not have terms that specify how the funding must be spent. • The funding received may be utilized at the full discretion of the recipient.• Unexpended funds not returned to the donor at the expiration of the gift period. • Financial reporting, if any, is limited, and for donor stewardship purposes only.

Sponsored Agreements (administered as grants, contracts, or cooperative agreements through OSP) - typically have one or more of the following:

• Scholarly terms or Statement of Work to define line of scholarly/scientific inquiry.• Formal deliverables such as annual progress reports or performance objectives.• Specified terms regarding fiduciary responsibility or payment contingencies.• Specified terms regarding disposition of property (including intellectual property) upon conclusion of the project.• Proposal typically submitted in a sponsor-required format.

Q: If this looks like a Gift, where do I turn for help?A: The KSG Gifts Policy Committee (GPC)!

Q: Great! What the heck is that?The GPC includes senior representatives of the KSG Financial Services, External Affairs, and Research Administration Offices. The GPC meets regularly and advises the Dean, Academic Dean, Executive Dean, Centers, and faculty on financial and administrative matters related to selected gift opportunities.

The GPC is charged with reviewing certain gift proposals and term sheets, and advising the Dean and others on questions of donor affiliation and stewardship, financial analysis, connection to and consistency with the KSG mission, and other risk management or compliance-related concerns.

Q: Sounds great. How do I find out more?A: Glad you asked. For more information, see: http://www.ksg.harvard.edu/research/gifts_policy.htm

About OSP: Who We AreVP for Finance

Beth Mora

Director, OSP

Bev Simmonds

Director, Cost Analysis and Compliance

Judy Ryan

Associate Director

Ethlyn O’Garro

Associate Director

Judy McSweeney

Sponsored Programs Officer

and Manager – FAS Life Sciences

Scott Blackwell

Sr. Financial Analysts

Financial Analysts

G&C Officers


Sr. G&C Specialists

G&C Specialists

Financial Analysts

Sponsored Programs Administrators

Sponsored Programs Coordinators


Financial Analysts


and Manager – FAS Phys/Soc Sciences

Helia Morris


and Manager – GSIA

Jen Mahoney


and Manager – HMS

Min Xiao


and Manager – SPH

Roseann Luongo

Sponsored Programs

Officer and Manager –

Cash Management

Diane Harwood

G&C Officers


Sr. G&C Specialists

G&C Specialists

Financial Analysts



G&C Officers


Sr. G&C Specialists

G&C Specialists

Financial Analysts



Financial Analysts

Business Process Training Specialist

Amy Maltzan/Victoria Wallace

Grants.Gov Business Process Manager

Simone Alpen

Lifecycle Teams

About OSP: What We Do

• Support effective management of awards throughout their lifecycle

• Provide institutional signature on all University-area proposals

• Receive, review and negotiate awards• Act as primary liaison with Sponsor, along

with Principal Investigator (PI)• Assist in interpretation of policies;

disseminate information on new policies• Provide institutional signature on all

sponsored financial reports for entire University

OSP GOALS/INITIATIVES

• Operations/Data Integrity• Client Outreach• On-line Trainings

GMAS• System of Record• Electronic Action Memos

The Award Lifecycle and Related Policies

Submission Policy and Provost’s Review Criteria

Gifts vs. Grants

Effort ReportingCost Transfers

Financial Reporting

Award Closeouts


ID Funding & Write Proposal

Institutional Clearances

Sponsor Review

Not Funded: Reviewers’ Comments

and Resubmit

Funded: Award

Terms & Conditions

Establish Project AccountIncur

Award Expenses

Accounting and

Monitoring

Sponsor Reports

and Close-out

Request Additional Funding!

This diagram shows how the policies we’ll discuss in this session relate to the Award Lifecycle.

Direct Charging (OMB A-21)UPAS




Sponsor Review

Funded: Award

Terms & Conditions


Award Expenses

Accounting and

Monitoring

Sponsor Reports

and Close-out


Submission Policy and Provost’s Review Criteria

RAO Proposal Review Process

• The Dean’s Approval Form (DAF) is the internal Harvard document that must be attached to all proposals.

• The RAO reviews proposals for compliance with KSG and Harvard University policies and procedures. RAO obtains OFS approval of the budget and KSG approval of the proposal from the Academic Dean, via signatures on the DAF.

• A fully-signed DAF represents KSG approval of a proposal and is required in order for OSP to submit a proposal.

Elements of RAO Proposal Review

• Proposal conforms with KSG and Harvard policies, and all applicable sponsor guidelines.

• Budget is accurate, including salary, fringe benefit

and overhead calculations.

• All requested costs are reasonable and allowable, particularly on federal proposals where not all usual direct costs are allowable under A-21 regulations.

• Overhead less than 20% requires approval by the Academic Dean.

Elements of RAO Proposal Review

• If use of human subjects is involved, what is status of approval?

• Is cost-sharing involved, and if so, is a form required?

• If there is direct charging of administrative salaries to federal grants, is a checklist completed?

• Does proposal require approval of the KSG Faculty Committee on Projects and Proposals (FCOPP)?FCOPP is a senior faculty advisory committee to the Dean that assesses a subset of proposals for potential risks to the University, the School, and its faculty, staff and students.

Items Likely to Complicate Proposal Review

Common Problems

Last-minute proposals

Lack of editing/proofreading by preparer

Inattention to University and sponsor budget guidelines, requirements, and instructions

Insufficient information provided to RAO/OSP, e.g., a copy of the program announcement or other instructions


Missing ItemsSubcontractor participation without documentation

of institutional commitment

Human subjects approval or exemption

Conflict of Interest Form

Approval of appropriate Dean(s) for faculty participation from other Harvard Schools


Budget IssuesOverhead shortfall (<20% ) issue not addressed

and resolved

Incorrect fringe benefit rates

Salary and vacation fringe calculations incorrect

Inconsistencies between budget and budget justification/lack of budget justification or detail.

Proposal Submission

• Proposals receive final review and are formally submitted by duly authorized representatives of Harvard in OSP.

• CAUTION! OSP is the only office authorized to submit proposals to external sponsors on behalf of the President and Fellows of Harvard College and its faculty members.

• A PI can submit a proposal (which should be labeled as preliminary) directly to a non-federal sponsor, but it will not be considered a formal Harvard University proposal until it has been submitted through the KSG Dean's Approval process to OSP.

Award Negotiation/Account Set Up

• If a proposal is funded, OSP negotiates the terms and conditions of the award with the sponsor. RAO serves as liaison between OSP and Center/Program and is kept up to date on status of negotiations.

• An Advance Account may be requested to set up an account string during award negotiation. This is done at the risk and request of the Center/Program.

• When negotiations are complete, OSP accepts the award on behalf of the University and sets up an account for the award.

OSP Staff

• Sponsored Programs Officer and Manager – Jen Mahoney

• Grants and Contracts Officer – Sarah Holtz

• Sr. Grants and Contracts Specialist - Debby Dunlap

• Sponsored Programs Administrator – Wendy Cazavelan

• Financial Analysts - Leela Joseph - Ana Garcia

Submission Policy: Timeline and Purpose

*Local dept./school review time not included

Timely proposals assured priority over late submissions which are reviewed after “on time” submissions in order received.

Type of Proposal Submit to OSPNon-Federal At least 3 business days prior to

sponsor deadline*

Federal At least 5 business days prior to sponsor deadline*

Response to RFP Send the RFP (or URL of the applicable Web site) to OSP at least 5 business days prior to the deadline. This allows adequate time for review of Sponsor’s submission guidelines and terms and conditions. On occasion, additional time may be needed to resolve/negotiate any issues prior to proposal submission.

5/3 Day Memo from Steve Hyman and Beth Mora can be found on the ERA website: http://isites.harvard.edu/fs/docs/icb.topic38276.files/5daymemo.pdf

Considerations in Proposal Review

OSP will also review against sponsor guidelines (e.g. font size, page limit, etc.) and advise PI of any potentially problematic issues, but will not edit or hold signatures based on such items (PI decides if/how to address these).

Is it clear who is sponsoring the project?

Are the PI and other key personnel identified?

Is there a defined scope of work?

Does the budget make sense?

Are the correct current fringe rates included?

Is the appropriate overhead rate included?

Are the costs listed allowable?

Is there a justification of all costs?

Are the core principles of our academic freedom and other key university researchpolicies maintained with the proposal/award?

Have the proper approvals been initiated?

Is there a dean’s approval form that the appropriate designated local official has signed off on?

Have approvals from all involved Tubs been included?

Could someone not familiar with the project pick up the proposal and know what it isfairly easily?

Vice Provost for International Affairs Criteria

• Review Criteria- Proposed budget exceeds KSG threshold

$1.1 Million

- Proposed project supports the establishment of any new international site

- Proposed project is deemed unusual, complex or high risk

- The project includes travel to countries on the Dept. of State Warning List

http://travel.state.gov/travel/cis_pa_tw/tw_1764.html

Provost Review Criteria

The presence of any of the following characteristics will require the proposal to be approved by the Provost before it is submitted to the

sponsor (OSP coordinates):Amount of request is $5M or more

Previous problems with sponsor

Degree to which the project deviates from Harvard’s existing mission of teaching, research, and service (i.e. clinical care vs. basic research; clinical trials vs. basic research)

Amount of int’l participation in project (particularly if there are foreign subcontractors)

Relationship of project to current world events (State Dept List)

Mechanics within the program announcement that may deviate from standard protocol (i.e. largefederal project awarded in three weeks through an expedited review)

Anything about the project that would automatically trigger local or national news coverage (i.e. non-approved human embryonic stem cells, any project studying terrorism, etc.)

Any exceptions to current University research policy (i.e. publication restriction, clauses that threaten academic freedom or prohibit inclusion of foreign nationals)

Previous issues/problems with a previous segment of the award

Extent to which the project may create genuine health/safety risk to Harvard personnel

Project w/large number of subcontracts where vast majority of work is not being conducted byHarvard

OSP Review of Grant Award

• Before accepting an award on behalf of the University, OSP reviews all terms and conditions in an award

• Reviews terms with PI and Department Administrators

• Reviews terms for consistency with proposal submitted

• Budget• Project Dates• Deliverables


• Reviews terms for compliance with University’s sponsored research policies, including:– Payment Terms– Acceptance of Deliverables– PI Independence– Termination– Audit– Indemnification and Insurance– Use of Harvard’s Name– Intellectual Property

• http://www.fas.harvard.edu/~research/greybook/patents.html

– Publication Restrictions– Confidentiality – Anti-terrorism Language– Export Control


• Review of award terms may require input from:

– Office of the Provost

– Office of the General Counsel

– Office of Technology Development

– Risk Management and Audit Services


Examples of Recent Issues

At Proposal Stage:• NSF/Department of Homeland Security: Students

Supported by Project must be U.S. Citizens or Permanent Residents

At Award Stage:• USAID and MacArthur Foundation: Compliance Plans for

Checking Suspected Terrorist Lists

• USAID: Requirement to have “Policy Opposing Prostitution and Sex-Trafficking”

Intermission

Sponsor Review

Funded: Award

Terms & Conditions


Award Expenses

Accounting and

Monitoring

Sponsor Reports

and Close-out





Incur Award Expenses

Allowability Consistency Conclusion

ReasonablenessAllocability

A-A-R-C Direct Cost Analysis

Does A-21 say this type of cost is allowable?

Does this item or activity specifically benefit the project?

Would a prudent person have paid this price?

Has this cost been double-counted as both a direct and indirect cost?

Is the cost allowable as a direct cost?

Allowability

Does A-21 say this type of cost is allowable?

ConsistencyHas this cost been double-counted as both a direct and indirect cost?

ConclusionIs the cost allowable as a direct cost?

ReasonablenessWould a prudent person have paid this price?Explicitly

NOTAllowable(e.g., J3. Alcoholic

Beverages)

Allowable as Direct Cost(e.g., J31.

Materials & Supplies)

NOT explicitly in A-21

(e.g., Specific Gizmos)

Normally allowable only as an indirect cost

(e.g., F6. Departmental

Administration)

Allocability Test:1. Was the cost incurred solely to advance the work under the sponsored agreement? If YES, then the cost is allocable.2. Does the cost benefit the work under the sponsored agreement and other projects as well? If YES, then the cost must be allocated in the measure to which it benefited the work under the sponsored agreement and a written allocation plan must be in place.

Different Purpose & Circumstance Test:1. Is this a non-federal grant? OR2.a. Can the cost be identified specifically with the project? b. Is it required by the project’s scope? c. Is it a line item in the proposal budget and included in the budget justification?If YES to 1 or 2 ( all 3 questions), the cost is allowable and allocable as a direct cost.

AllocabilityDoes this item or activity specifically benefit the project?

Reasonable Test:Would a prudent person pay this price for this item or activity for the performance of the sponsored agreement?

If YES then the cost is Reasonable.

Consistency Test:1. Have you used different practices for estimating costs in the proposal budget and for accounting/billing/reporting costs?2. Have you charged the same cost both indirectly and directly when it is incurred for the same purpose and circumstance?

If NO to both questions, then the cost passes the Consistency Test.

The cost is allowable as a direct cost in the measure to which it benefits the project

STOP

May the cost of this item or activity be treated as a DIRECT cost?

A-A-R-C Direct Cost Analysis

Federal and Non-Federal

• Both are audited and reviewed– Multiple reviews last year – agencies and foundations– A-133 audit now includes non-federal awards

• Both rely on University systems such as payroll, effort reporting, equipment management

• Both will be considered as part of SAS 112Communicating Internal Control Related Matters Identified in an Audit

Results of Non-Compliance: Significant

Audits/Settlements

Johns Hopkins Univ Effort Certification

$2.7 million

University of Minnesota

Misuse federal funds $32 million

New York University Medical Center

Inflated research grant costs

$15.5 million

Mayo FoundationMischarging federal grants $6.5 million

Harvard/BIDMCCosting Issues Self-Reported

$3.25 million

Northwestern University

Committed Time/Effort$5 million

Univ Alabama/Birmingha

mEffort Certification &

Clinical Research Billing $3.4 million

East Carolina Univ Questioned Costs HHS/OIG Audit $2.4

million

Univ of Southern California Questioned

Costs HHS/OIG Audit $400,000

Florida International Univ

Effort Certification & Direct Costs

$11.5 million

Univ California/San Francisco

Animal Care Allegations $92,500 fine

Cornell Medical Clinical Research Issues

$4.4 million

A-133 D400d(3). Monitor the activities of sub-recipients as necessary to ensure that Federal awards are used for the authorized purposes in compliance with laws, regulations, and the provisions of the contracts or grant agreements and that performance goals are achieved.

Sub-recipient Monitoring

Sub-recipient Monitoring

• As prime grantee, KSG and PI are responsible for entire award

• PI monitors programmatic performance

• PI approves invoices and certifies performance and appropriateness of charges

• Grantee could be liable for disallowed costs of subcontractor

Effort Reporting Policy

Effort : the amount of time spent on a particular award, expressed as a % of the total amount of time spent on work related activities (teaching, research, service) for which the University compensates an individual.

Effort reporting is a federal requirement (A-21 Sec. J.10.c):• Effort Reporting is a process mandated by the Federal

government to verify that direct labor charges to Federally sponsored projects are reasonable and reflect actual work performed

• Faculty and staff salaries charged to sponsored research projects should be commensurate with the direct effort provided to the project

• As a requirement of receiving federal funding, institutions must maintain an accurate system for reporting the percentage of time (i.e., effort) that employees devote to federally sponsored projects

Effort Reporting: Here at Harvard

• In Harvard's decentralized environment, effort reporting and salary certification methods are accomplished in different ways by the Schools.

KSG Monthly Salary Certification for Research Staff:

http://www.ksg.harvard.edu/ofs/policies_procedures/research.htm

Cost Transfers

Sponsor Review

Funded: Award

Terms & Conditions


Award Expenses

Accounting and

Monitoring

Sponsor Reports

and Close-out





Cost Transfers – Policy Overview

Cost Transfer Policy can be found in the Policies section of the OSP

website:http://vpf-web.harvard.edu/osr/managing/

man_cos_transfer.shtml

Definition: A cost transfer is a transfer to a federally funded sponsored account of a charge previously recorded elsewhere.

Cost Transfers – Purpose of Policy

• Federal regulations require that transfers to federally funded sponsored accounts be timely and properly documented (see OMB Circular A21 section C 4 (b))

• To demonstrate that adequate financial controls are in place, cost transfers should be kept to a reasonable minimum

• Late, frequent, and inadequately explained cost transfers:– Suggest poor financial management– Lead to questions on the overall reliability of KSG’s internal

controls and accounting systems– Cause audit issues

• Monthly monitoring of accounts using the Period Expense Report and Detail Listing is encouraged to identify incorrectly allocated expenses

Cost Transfers – Policy Overview• The policy addresses ALL debit transfers to Federal Awards that were

previously recorded elsewhere– Cost transfers are identified by a journal naming convention, the journal

name starts with “CT”• Example: “CT STA Allocate glass washing OCT-04”

– The description field of a CT journal indicates that a CT form has been processed or the reason why a CT form is not required is identified

• Different procedures are followed for cost transfers made under 90 days and over 90 days from the 15th of the month following that in which the original charge was recorded

• There are also special categories of cost transfers that require only a journal entry – see the Cost Transfer policy for more information on these

Situations that DO NOT allow for Cost Transfers:– “Zeroing Out” accounts– Solve funding problems– Meet deficiencies caused by cost overruns– Balancing the budget– Shifting costs to avoid budget restrictions

Cost Transfers Under 90 Days

• ExampleOriginal charge posted September 4th – 90 days counted from October 15th – Cost Transfer should be transacted on or

before January 12th

• Cost transfers made within 90 days of the 15th of the month following that in which the original charge was recorded– Transferred by journal entry at departmental level– Accompanied by the Cost Transfer Explanation Form with

questions 1 and 2 answered and signed as indicated– Journal description: “See related Cost Transfer form”– Documentation sent to OSP for review and approval – Returned to originator for posting to GL and retention with

other accounting records

CT Explanation and Justification Form

Valid explanations should include:

Question 1– Description of expense being transferred (include why and when

original charge occurred)

– Why the expense was originally charged incorrectly

Question 2– Why expense(s) is allowable on the receiving account (direct benefit

to the receiving account)

Would an outside auditor reviewing the Cost Transfer Explanation & Justification Form 3 years from now understand the cost transfer

?

Cost Transfers Over 90 DaysCost transfers made more than 90 days after the 15th of the month following

that in which the original charge was recorded

ONLYONLY GRANTED IN EXTENUATING CIRCUMSTANCES

NOT EXTENUATING CIRCUMSTANCES:

• Absence of– Principal Investigator – Responsible administrator

• Shortage of staff• Lack of experience of staff

EXTENUATING CIRCUMSTANCES:

• Late issuance of an Action Memo (45 day limit!)• Late issuance of a notice of grant award

• Failure of another department to take action

NOTE: ALL CT FORMS REQUIRE SUPPORTING DOCUMENTATION

Cost Transfers Over 90 Days

Cost transfers made after 90 days of the 15th of the month following that in which the original charge was recorded:

– Transferred by journal entry at departmental level– Accompanied by the Cost Transfer Explanation Form

with questions 1 - 4 answered and signed as indicated– Journal description: “See related Cost Transfer form”– Documentation sent to OFS for review and approval – Forwarded by OFS to OSP for signature– Returned by OSP to originator for posting to GL and

retention with other accounting records

Cost Transfers – Roles & ResponsibilitiesCenter/Department:• Ensure compliance with the University Cost Transfer Policy • Complete/enter draft cost transfer journals • Complete cost transfer package and forward to OSP (under 90 days) or OFS ( over 90 days)• Retain hard copies of all related documentation in accordance with applicable record

retention regulations• Ensure that all personnel engaged in financial administration of federally funded accounts

are familiar with the University Cost Transfer Policy

OFS:• Review cost transfers over 90 days to ensure compliance with University Cost Transfer

Policy• Provide required Financial Dean signature, if all criteria are met• Forward signed form to OSP, retain copy of cost transfer documentation in appropriate fund

file• If necessary, upload journal entry when cost transfer is approved

OSP:• Be available to assist in interpretation and implementation of the University Cost Transfer

Policy

• Train in the application of the Cost Transfer Policy• Review cost transfers• Approve cost transfers

Financial Reporting

Sponsor Review

Funded: Award

Terms & Conditions


Award Expenses

Accounting and

Monitoring

Sponsor Reports

and Close-out





Sponsored Financial Reporting PoliciesThe University Policy and Procedures for

Sponsored Financial Reporting can be found at:

http://vpf-web.harvard.edu/osr/managing/man_fin_reporting.shtml

Policy Objectives:– Clarify reporting roles and responsibilities– Identify which expenses will be included on financial reports – Reduce number of unreconciled accounts and revised

Financial Reports – Develop consistent reporting practices across departments

OSP Responsibilities in Financial Reporting• Each month, the OSP Financial Analysts run the “Scheduled

Reports” in CREW identifying which financial reports and invoices are due within next 30-90 days

• Review and prioritize outstanding financial reports list and communicate with departments for upcoming reporting deadlines, including annual reports or final invoices for the budget periods

• Draft periodic invoices or reports and submit directly to sponsors

• Draft final Financial Status Reports (FSRs) or final invoices based on latest PER figures and send to department for review

• Work with department to resolve various issues and prepare necessary adjustments ( remove unallowable transactions, over spent or under spent, carry forward, overhead etc. )

• Submit FSR to sponsor before deadline

Center/Program Responsibilities in Financial Reporting

• Each month, the departmental administrators should run the “Segments” report in CREW identifying those awards with anticipated end dates within next 120 days

• Ensure all outstanding expenses have posted (e.g. web vouchers from affiliates, salaries, subcontract final invoices etc.)

• Review expenses for cost compliance - remove any unallowable/non-allocable charges (contact OSP for cost transfer issues)

• Remove any over-expenditures and reconcile to budget

• Review and approve draft FSR (5 business days)

Federal and Non-Federal Reporting

• Types of Federal Reports:– SF 269 Financial Status Report (FSR)– SF 272 Federal Cash Transactions Report– SF 270 Request for Reimbursement– SF 1034/1035 Voucher for Reimbursement

• NIH typically requires SF 269

• Non-federal reporting requirements vary by sponsor, as a result the reporting format/template may differ

Reporting Roles & Responsibilities

Roles & Responsibilities

Final Non-Reportable

Final Reportable

OSP = OCenter/Dept = D

Reviews Invoices Reports

Account Reconciliation D D D

Review of Expenditures O/D O/D O/D

Alert Dept. of Post-Award Issues

O O O

Respond to/Rectify Post-Award Issues

D D D

Confirm Final Figures D D D

Prepare FSR O O O

Send FSR draft to Department N/A* O O

Approve report/invoice N/A* D D

Submit FSR to sponsor N/A* O O

*Dept responsible for final reconciliation

Award Closeouts

Sponsor Review

Funded: Award

Terms & Conditions


Award Expenses

Accounting and

Monitoring

Sponsor Reports

and Close-out





Closeout of Sponsored Accounts

Information can be found on the OSP website:

http://vpf-web.harvard.edu/osr/closing/clos_how_award.shtml

• Prudent financial management of sponsored accounts includes timely and accurate reporting and account/award close out. These functions are tested as part of the annual OMB A-133 audit as well as by other sponsoring agencies when they make periodic visits to Harvard.

• Approximately 60 days prior to the expiration of the project account, the OSP Financial Analyst will contact the local unit regarding the status of the account. The administrator should ensure that all project costs are appropriately charged to the account. As the project nears termination it is important to review all costs and clear those which are unallowable or inappropriate to this account.

Considerations w/Account Closeout and Disabling

• GMAS monthly automatic disabling process

• Activity-Subactivity Disabling: GL expenses = GL income = Final Figure

• Segments Close-out in GMAS (manually)

• Funds Disabling automatically • If problems arise, OSP team member

will work with department administrators to resolve issues

Potential Problems with Disabling

• Expenses posted in the current month

• Invalid code combinations • Charges to non-sponsored funds and

sponsored activity/subactivity– Cost sharing– Work study– Travel advances

Thank you for attending. Questions?

Additional Materials

OMB A-21 Key Concepts

Chief Aim: to have the federal government pay its “fair share” of the costs of research conducted at the University.

Means for achieving this aim: principles for determining the costs applicable to research and development, training, and other sponsored work performed by universities under sponsored agreements (grants, contracts, and other agreements) with the Federal Government.

ALLOWABLE Costs:

They must be reasonableThey must be allocable to sponsored

agreements under the principles of A-21

They must be given consistent treatment through application of those generally accepted accounting principles appropriate to the circumstance

They must conform to any limitations or exclusions set forth in A-21 or in the sponsored agreement


ALLOCABLE Costs:

A cost is allocable to a particular cost objective if the goods or services involved are chargeable or assignable to such cost objective in accordance with relative benefits received.


REASONABLE Costs:

A cost that a prudent person would have incurred under the circumstances prevailing when the purchase was made.


CONSISTENCY:An institution must use the same

practices for estimating costs in budgeting a proposal and for accumulating and reporting costs.

Each type of cost may be allocated only once and on only one basis to any sponsored agreement or cost objective.

OMB A-21 Appendix A - Cost Accounting Standards 9905.501 and 502


Case 1: Administrative salaries

The Facts:Professor Academia is writing a proposal to the NIH for an Obesity Project involving human subjects. She’d like to have an administrator to provide support for the Obesity Project. Here are the tasks she’s thinking of assigning to the new hire:

Case 1

Proposed Obesity Project administrator tasks (abbreviated):

Proposal preparation Coordinating human subjects Project Survey preparation (administrative) Arranging travel to a conference on obesity Course and committee materials Food for weekly lab meeting Filing/keeping desk in order Administering a journal Work related to “Education and Obesity”

Case 1

May Professor Academia put some or all of the admin’s compensation on the proposed Obesity Project budget?

In other words…

Which of the listed tasks would constitute allowable effort on the Obesity Project?

The IssueCase 1

ALLOWABILITY Summary of Conclusions:

Compensation = Effort for:

Yes or No?

Proposal preparation NO

Coordinating Human Subjects YES

Survey preparation YES

Arranging travel to a conference on obesity

YES

Course and committee materials

NO

Food for weekly lab meeting NO

Filing/keeping desk in order NO

Administering a journal NO

Work related to “Education and Obesity”

NO, but perhaps allocable to E&O Project

Case 1

CONCLUSION:

Salary and fringe equal to the proportion of an administrator’s time spent finding and coordinating human subjects, preparing the survey, and arranging travel to the obesity conference may be charged to the grant (i.e., they’re ALLOWABLE), provided that:

1.The proportion is at least 25% of an FTE; and,

2.The salary and fringe are a specific line item in the proposal budget and discussed in the budget justification.

Case 1

But what do I do with the rest of the administrator’s salary and fringe?

Determine whether his or her effort spent on other projects passes the A-A-R-C analysis (i.e, it is allowable as a direct expense on another grant.)

Charge remaining amounts to the appropriate departmental account.

Case 1

Case 2: Computers and Communications

The Facts:Professor Moose just received funding from the USAID to do field work in a Distant Land on the Far Away Project. He and his research staff will be collecting data at the Project site and analyzing it there and here in Cambridge. Professor Moose often uses his cell phone to stay in contact with his research staff in the field and with collaborators on the Far Away Project. He also does a significant amount of his work by email from his home computer, in part because of the time difference between Cambridge and the site of the Far Away Project, and would like to charge the costs of his Internet service to the Project award. He’d like to charge the costs of the following items or activities directly to his Project grant.

Case 2

Proposed charges to the Far Away Project:

a laptop computer to take with him to record data in the field

a desktop computer for his lab (it’ll sit in the open, common area of his lab so his post-docs and students have access to it) for analyzing results using a special software program, once he returns from the field

the specialized software the cell phone and monthly cell phone

service fees, including roaming charges the costs of his home Internet service

Case 2

May Professor Moose put some or all of his computer and communications charges on the proposed Far Away Project budget?

The IssueCase 2

ALLOWABILITY Summary of Conclusions:

Charge Yes or No?

A laptop computer to take with him to record data in the field

YES in the measure to which the project is benefited

A desktop computer for his lab NO

The specialized softwareYES in the measure to which the project is benefited

The cell phone and monthly service fees, including roaming charges

NO

The costs of his home internet service

NO – this is a personal expense

Case 2

CONCLUSIONS:

If Professor Moose purchases a laptop specifically for the purpose of advancing (benefiting) the work of the Far Away Project, then the item is “readily identified specifically with the project with a high degree of accuracy” and its full cost may be allocated to the Project. To treat its cost as a direct charge, he should include the cost of laptop in the proposal budget under “Materials and Supplies” and describe it in the budget justification.

The entire cost of the specialized software is allowable as a direct cost because it was incurred solely to advance the work under the Far Away Project.

Case 2

But what do I do with the costs of computers and communications that are not allowable as direct charges on the Project?

Charge them to the appropriate departmental account, unless they are personal expenses, which should be covered by the individual faculty member.

Case 2

Documents

KSG/OSP Training and Information Session May 17, 2007