SRA Departmental Administrators Certification Course (DA-201)

SRA Departmental Administrators Certification Course(DA-201)

Keys To Success In Management:

• Pride In One’s Organization

• Enthusiasm For Its WorkTom Peters

A Passion For Excellence

Classic Management Challenge

“How To Make Ordinary People Do Extraordinary

Things”

Peter Drucker In HBR Likens Managers To Conductors Of

Symphony Orchestras“A Great Orchestra Is Not Composed Of Great Musicians But Of Adequate Ones Who Produce At Their Peak”

Why Does The Same Group Of Musicians Perform Poorly Under One Conductor

And Superbly Under Another?

“The Great Leaders Are Like The Best Conductors – They Reach Beyond The Notes To Reach The Magic In The Players.”

Blaine Lee

The Power Principle

Drucker Says:

“The Key To Greatness Is To Look For People’s Potential

And Spend Time Developing It”

So How Are You Doing As A Manager?

or

“In the real world, Research Administrators strive to provide quality support to the research enterprise while following all of the applicable policies and rules. It’s not always as easy as it sounds!”

Department Chair

Sponsored Programs Office

Purchasing Office

Funding Agencies

Dean’s Office Students

To Succeed, We Can’t Just Be Reactive, We Must Be Proactive!

What Does It Mean To Be Proactive?

• Have A Plan.

• Study The Art

Of Management

• Observe Successful People!

Lessons From Great Leaders

“A Good Plan Executed Right Now Is Far Better

Than A Perfect Plan Executed Next Week.”

George S. Patton

“She Didn’t Know It Couldn’t Be Done, So She Went Ahead And Did It.”

Mary’s Almanac

Lessons From Great Leaders1. Don’t Be Afraid To Take Action

“Failure Is The Opportunity To Begin Again, More Intelligently.”

Henry Ford

“I Have Not Failed. I’ve Just Found 10,000 Ways That Won’t Work.”

Thomas Alva Edison

“The Only Man Who Makes A Mistake Is The Man That Never Does Anything.”

Theodore Roosevelt

Failure–Tolerant Organizations• Encourage Intelligent Risk Taking• View Failure As A Pre-Requisite For

Invention• View Failures As Outcomes To Be

Examined, Understood, And Built Upon• Focus On Increasing Their Organization’s

Intellectual Capital • Create A Culture Of Collaboration Rather

Than Competition.Richard Farson and Ralph Keyes

The Failure-Tolerant Leader

• Jack Welch, Former Head Of GE

“We Reward Failure.”

• Thomas Watson, Sr., Former Head Of IBM

“The Fastest Way To Succeed Is To Double Your Failure Rate.”

Peter Doherty, 1996 Nobel Prize Winner“A Good Researcher Failed Every Time But The Last One.”

• Spencer Silver’s “Failure” Imperfect Adhesive resulted In 3M’s Post-It Notes


2. Foster An Environment That Allows People To Fail Intelligently

“I Not Only Use The Brains I

Have, But All I Can

Borrow.”

Woodrow Wilson

“The Best Executive Has The Sense Enough To Pick Good Men, And The Self-Restraint Enough To Keep From Meddling.”

Theodore Roosevelt

“Never Tell People How To Do Things. Tell Them What To Do And They Will Surprise You With Their Ingenuity.”

General George S. Patton



3. Hire Good People, Point Them In The Right Direction, Provide Motivation, but Don’t Micro-Manage

“Individual Commitment To A Group Effort – That Is What Makes A Team Work, A Company Work, A Society Work, A Civilization Work.”

Vince Lombardi

• Teamwork – A Worthy Goal!

• But Not All Groups Become Teams

• What Makes A Group Become A Team?

“A Team Is A Small Number Of People With Complementary Skills Who Are Committed To A Common Purpose, Set Of Performance Goals, And Approach For Which They Hold Themselves Mutually Accountable.”

Jon R. Katzenbach And Douglas K. Smith

The Discipline Of Teams


















3. Hire Good People, Point Them In The Right Direction, Provide Motivation, but Don’t Micro-Manage

4. Encourage The Development Of Effective Teams

“The Difference Between A Boss And A Leader: A Boss Says, ‘Go!’ – A Leader Says, ‘Let’s Go!’”

E. M. Kelly

Growing Disciples

What Does It Mean To Lead By Example?



3. Hire Good People, Point Them In The Right Direction, And Stay Out Of Their Way

4. Encourage The Development Of Effective Teams

5. Lead By Example!

Tim’s Definition of Management:

The Process of Intentionally Guiding An Organization Toward The Successful Fulfillment Of Its Mission, Within A Given Set Of Environmental Constraints,By Setting And Achieving Specific Goals.


Tim’s Definition of Management:

What Constraints Do We Face?

Money


Money People


Money People

Facilities


Money People

Facilities Time“The thing I lose patience with the most is the clock. Its hands move too fast. Time is really the only capital that any human being has, and the one thing that he can’t afford to

lose.”

Thomas Edison

Environment Constraints

1.Resources


1.Resources2.Rules


1.Resources2.Rules

3.Organizational Culture

Spending Too Much Time Focusing on

Constraints Is A Waste!

“Great Managers Focus On Solutions, Not Limitations.”

Remember Tim’s Definition

of Management


Harvard Parking Story 1950’s – 2 UNC Grads To Harvard

One in Wheel Chair

Arrived In Boston One Evening•No Parking By Dorm•Parked By Front Door To Unload

Campus Police Came•Returned With Workman – Painted Yellow Line

Understanding Mission:

“As Long As You And Your Roommate Are Students In Good-

Standing At Harvard, This Parking Place Is For

You!”

He Felt Empowered To Make A Decision That Supported This Mission.

Some Pretty Incredible Managers – Even “Campus Cops” Knew And Supported The MISSION.

He Understood Harvard’s Mission: Supporting Education

Remember The Man Who Worked For Ringling Brothers Circus

All Dusty And Somewhat Smelly Worked For 32 Years Following The Elephants With A Broom And Large Dust Pan To Keep The Streets Clean

When Asked Why He Didn’t Get Into Another Line Of Work He Replied, Indignantly

“WHAT, AND GIVE UP SHOW BUSINESS?” He Knew What Business He Was In.

It Wasn’t About Cleaning Up After Elephants.

He Was In Show Business!

He understood The Mission.

Visits To UNC-CH VR Lab

“Your Job Is To Support (Enable) What You Are About To Experience.”

NEW PERSPECTIVE Focus On The Mission!

“What Is Your Job?”• Process Travel Forms• Pre-Audit Contract and

Grant Expenditures• Track Effort-Reporting

CircusEmployee

HarvardCop

MISSION

Research Support

Staff

Pride Enthusiasm

Focus

Efficiency vrs. EffectivenessA Balancing Act!

Efficiency – Producing The Greatest Quantity Of Work For Each Unit Of Resource Expended (Or Producing A Unit Of Work For The Smallest Possible Expenditure Of Resources)

Effectiveness – Successfully Accomplishing The Goals/Objectives Of The Organization.

Fulfilling Its Mission!

Efficiency Is Important Resources Are Limited – We Must Use

Them Intelligently

But - An Efficient Organization Is Not Necessarily An Effective Organization

When Sub-Units Strive To Develop Efficient Approaches To Accomplishing Their Work, They Often Ask The Following Questions:

– How Can We Organize Ourselves To Get Our Work Done Most Efficiently?

Sub-Unit Optimization

– What Policies/Procedures Do We Need To Put Into Place To Help Us Get Our Work Done?

What’s Wrong With These Questions?

• They Focus Inward On Getting Their Work Done Rather Than Focusing On How To Accomplish The Goals Of The Organization.

Example: UNC Survey Due May 15

Sub-Unit Optimization

Better Question:

How Can We Best Organize Ourselves To Accomplish The Work That We Are Assigned In A Manner That Best Supports The Goals Of The Enterprise?

Paradoxical Question

• Should We Intentionally Create Sub-Unit Inefficiencies In Order To Best Support The Goals/Mission Of The Enterprise?

Remember Tim’s Definition of Management


Rules For Effective Goal Setting

1.Set Goals That Are Important/Challenging

• Related To Mission

• Significant

• Push You To Achieve

• Highly Motivated

• Focus On What You Want – Not What You Don’t Want

• Keep A Mental Image of Success

• Stay Away From Negative Thinking

“Obstacles Are Those Frightful Things You See When You take Your Eyes Off The Goal.”

Henry Ford

2.State Your Goals In Positive, Not Negative, Terms!

“Dreams Are Just Thoughts. They Become Tangible Goals When We Write Them Down.”

3.Write Your Goals Down.

• Helps To Crystallize Thinking

• Be Precise

• Helps Spot Contradictory Goals

• Increases Commitment

“Goals Are Just Dreams With Deadlines.” Diana Scharf Hunt

Creating Deadlines Is A Powerful Management Technique

4.Make Your Goals Time Specific

5.Review Your Goals Regularly!

• My Approach: Plastic-Covered Sheet In Telephone Book Drawer

• Reviewing Keeps You Focused

• Be Willing To Modify/Clarify When Appropriate

6.Don’t Give Up. Continue Until You Achieve Your Goals!


Remember Tim’s Definition of Management

What Is Your Approach To Management?

Intentionality in Management

• Management By Wandering Around• Total Quality Management

• Responsible Delegation Techniques

• Understanding Motivation

Management By Wandering Around


• Get Out From Behind Your Desk• Spend Time In The

Labs/Classrooms/Building• Walk The Halls• Be A Keen Observer• Ask People Questions

• You Will Be Surprised By What You Learn!

• On Occasion Go To Other People’s Office For Meetings (Don’t Always Have Them Come To You)

• If Possible, Locate Your Office In The Highest Possible Traffic Area

Be Accessible

• If Possible, Arrange Your Office So You Don’t Sit Behind Your Desk When Meeting People


TQM: What’s Worth Remembering

W. Edwards Deming (Management Consultant -Ideas Were Rejected In The US – Promoted a Quality Approach In Japanese Manufacturing)

• Pre-Quality (Poor Quality, Cheap “Knock-Offs”)

• Post-Quality (Finest Electronics and Cars In The World)

Baldridge Award in US

TQM Core Principles

What Can We Do To Get Better?• Banish Complacency• Set Heroic Goals – “Raise The Bar”

Commitment To Continuous Improvement• “Excellence Is A Game Of Inches.” Tom

Peters

Treat Mistakes Like “Diamonds”• Rare/Opportunities To Learn• H-P (Can’t Get Raise If You Haven’t Made

Mistakes – If No Mistakes, You Aren’t Doing Anything)

Responsible Delegation

A Manager Must Learn To Delegate Responsibility And Authority In Order To Build An Effective Team!

1. Time To Look At “Big Picture”/Plan2. Greater Staff Involvement = Higher

Morale/Investment3. More Gets Done When Manager Isn’t “Funnel”4. Creativity

Payoffs

Responsible Delegation

1. Inconsistent Application of Policy2. Strain When Manager Feels That An

Employee Is Doing Something Wrong And Has To Confront Him/Her

3. Accountable For Decisions You Don’t Make

4. Asking Employees To Do Too Much – They May Be Resistant (“Don’t Dump on Me”)

5. “I Could Have Done It Myself Faster”6. “Loose Touch With Operations”

Risks/Problems

Reward People For Solving Problems Without Coming To See You First!

Unconventional Weekly Staff Meetings Agenda – “The Problems You Faced

And The Decisions You Made And, If You Got Help, Who Helped You.”

Builds A Team That Works Together!

Harvard Business Review Case Study: MacGregor

McGregor Played A Lot Of Golf!

Employee Motivation is Based Upon:

MOTIVATION

A B C


MOTIVATION

A B CA= Does My Job Contribute To My Personal Goals?


MOTIVATION


B= Am I Confident In My Abilities To Do My Job?


MOTIVATION


C= If I Do A Great Job, Will I Be Recognized And Rewarded?

B= Am I Confident In My Abilities To Do My Job?

Compliance for Departmental Administrators

DA 201

Institutional Compliance is:

A A commitmentcommitment to obey federal and state laws and to obey federal and state laws and sponsor policies, and follow internal policies and sponsor policies, and follow internal policies and proceduresprocedures

An An ongoing operational programongoing operational program to prevent, to prevent, detect, and correct wrongdoingdetect, and correct wrongdoing

A A system of internal control and proceduressystem of internal control and procedures to to evaluate operational practices, minimize legal and evaluate operational practices, minimize legal and business risk and implement corrective actionbusiness risk and implement corrective action

Objectives

Importance of programImportance of program What is requiredWhat is required ResponsibilitiesResponsibilities How departmental administrators can How departmental administrators can

participateparticipate

Why is Institutional Compliance Necessary? Complex statutory and regulatory Complex statutory and regulatory

environmentenvironment Increased government scrutinyIncreased government scrutiny Government and sponsors look favorably Government and sponsors look favorably

upon institutions with effective compliance upon institutions with effective compliance programsprograms

Compliance

Need to know the rules to help the Need to know the rules to help the investigatorsinvestigators

At departmental level, you are more likely At departmental level, you are more likely to hear of problems earlyto hear of problems early

Issues of noncompliance inevitably come Issues of noncompliance inevitably come back to haunt the department and its back to haunt the department and its administrationadministration

First line of defense against non-complianceFirst line of defense against non-compliance

Compliance

Compliance does not mean “no”Compliance does not mean “no”

Benefits of a Compliance Program Demonstrates commitment to ethical and lawful Demonstrates commitment to ethical and lawful

behaviorbehavior Instills a culture that promotes integrity and Instills a culture that promotes integrity and

ethical behaviorethical behavior Proactively identifies risks before they become Proactively identifies risks before they become

major issuesmajor issues Enhances employee awareness of conduct that is Enhances employee awareness of conduct that is

unacceptableunacceptable Reduces organizational exposure to civil and Reduces organizational exposure to civil and

criminal liabilitycriminal liability

Risk Assessment (Outline)

Protection of Human Subjects Protection of Human Subjects Care and Use of Animals in ResearchCare and Use of Animals in Research Stewardship of Federal FundsStewardship of Federal Funds Conflict of InterestConflict of Interest Environmental Health and Safety IssuesEnvironmental Health and Safety Issues

Management’s Responsibilities

Commitment

You must be able to communicate (sell)You must be able to communicate (sell) What is expected of themWhat is expected of them Why it is required (federal, state, local & Why it is required (federal, state, local &

sponsor)sponsor) Where hazards, controls, and safe work Where hazards, controls, and safe work

practices exist in the workplacepractices exist in the workplace When requirements change or newly adoptedWhen requirements change or newly adopted Whom to contact for questions and assistanceWhom to contact for questions and assistance What are the required resources What are the required resources


Protection of Human SubjectsProtection of Human Subjects Care and Use of Animals in ResearchCare and Use of Animals in Research Stewardship of Federal FundsStewardship of Federal Funds Scientific MisconductScientific Misconduct Conflict of InterestConflict of Interest Application of Intellectual PropertyApplication of Intellectual Property Environmental Health and Safety IssuesEnvironmental Health and Safety Issues

Human Subjects in Research

Medical War Crimes - WWII Experiments were unprecedented in scope and Experiments were unprecedented in scope and

degree of harmdegree of harm ““Medical Experiments” were performed on Medical Experiments” were performed on

thousandsthousands 16 of 23 Physicians and Administrators found 16 of 23 Physicians and Administrators found

guiltyguilty 1947 verdict included rules for “Permissible 1947 verdict included rules for “Permissible

Medical Experiments” known as the “Nuremberg Medical Experiments” known as the “Nuremberg Code”Code” Voluntary consentVoluntary consent Benefits outweigh risksBenefits outweigh risks Ability of subjects to terminate participationAbility of subjects to terminate participation


Jewish Chronic Disease Hospital (1963) Injection of foreign, live cancer cells into Injection of foreign, live cancer cells into

hospitalized patients with various chronic hospitalized patients with various chronic debilitating diseasesdebilitating diseases

Oral consent did not include discussion of Oral consent did not include discussion of cancer cellscancer cells

Researcher found guilty of fraud, deceit and Researcher found guilty of fraud, deceit and unprofessional conductunprofessional conduct


The Willowbrook Study (1963-66) NY institution for “mentally defective” NY institution for “mentally defective”

childrenchildren Study to gain an understanding of the Study to gain an understanding of the

natural history of infectious hepatitisnatural history of infectious hepatitis Newly admitted children were deliberately Newly admitted children were deliberately

infected so scientists could work on a infected so scientists could work on a vaccinevaccine


Tuskegee Syphilis Study Notorious example of prolonged and Notorious example of prolonged and

knowledgeable violation of a vulnerable groupknowledgeable violation of a vulnerable group 1932 through 1972 USPHS - study to the natural 1932 through 1972 USPHS - study to the natural

history of untreated syphilishistory of untreated syphilis 400 men participated – spinal taps were presented 400 men participated – spinal taps were presented

as “special free treatment”as “special free treatment” 1940 penicillin found effective in the treatment1940 penicillin found effective in the treatment


Timeline of Events

NIH – Human Participant Protections Education for Research Teams


Timeline of Response

NIH – Human Participant Protections Education for Research Teams


Declaration of Helsinki (1964, revised 2000)

Distinction – Therapeutic vs. Non-Distinction – Therapeutic vs. Non-TherapeuticTherapeutic

Informed Consent – Central RequirementInformed Consent – Central Requirement Need for protocol, reviewed byNeed for protocol, reviewed by

independent committeeindependent committee


Federal Protections Begin Result of the Tuskegee Study exposureResult of the Tuskegee Study exposure National Research Act of 1974National Research Act of 1974

Codify policy for protection of human Codify policy for protection of human subjects (45 CFR 46)subjects (45 CFR 46)

Established Institutional Review Board as Established Institutional Review Board as authorizing bodyauthorizing body

Only applies to federally funded or FDA regulated Only applies to federally funded or FDA regulated research research


Belmont Report (1979) Cornerstone of ethical principles upon which the Cornerstone of ethical principles upon which the

federal regulations are basedfederal regulations are based Respect for PersonsRespect for Persons

Individual AutonomyIndividual AutonomyProtection of individuals with reduced Protection of individuals with reduced

autonomyautonomy BeneficenceBeneficence

Maximize benefits and minimize harmsMaximize benefits and minimize harms JusticeJustice

Equitable distribution of research costs and Equitable distribution of research costs and benefitsbenefits

HIPAA - Privacy Rule (4/14/03) (Health Insurance Portability and Accountability Act)

National health information privacy protectionNational health information privacy protection Applies to health plans and providers who conduct Applies to health plans and providers who conduct

electronic financial transactionselectronic financial transactions Applies to personally identifiable health Applies to personally identifiable health

information communicated electronically, on paper, information communicated electronically, on paper, or orallyor orally

Affords patients rights to education about privacy Affords patients rights to education about privacy safeguards, access to their medical records, and a safeguards, access to their medical records, and a process for correction of recordsprocess for correction of records

http://privacyruleandresearch.nih.govhttp://privacyruleandresearch.nih.gov//

HIPAA – Security Rule (4/21/05)

The standards define The standards define administrativeadministrative, , physicalphysical, and , and technical safeguardstechnical safeguards to protect the confidentiality, to protect the confidentiality, integrity, and availability of electronic protected integrity, and availability of electronic protected health information (EPHI)health information (EPHI)

Protect against any reasonably anticipated threats or Protect against any reasonably anticipated threats or hazards to the security or integrity of such hazards to the security or integrity of such informationinformation

Protect against any reasonably anticipated uses or Protect against any reasonably anticipated uses or disclosures of such information that are not disclosures of such information that are not permitted or required under the privacy rulepermitted or required under the privacy rule

Ensure compliance by its workforceEnsure compliance by its workforce


What Can the Administrator Do?

Become familiar with the requirements for Become familiar with the requirements for research involving human subjects research involving human subjects

Maintain rapport with IRB administratorsMaintain rapport with IRB administrators Assist investigator in applying for IRB approvalAssist investigator in applying for IRB approval Ensure training requirements are met for key Ensure training requirements are met for key

personnelpersonnel Become familiar with HIPAA regulations, and Become familiar with HIPAA regulations, and

assist PI in compliance with privacy regulationsassist PI in compliance with privacy regulations


Resources

DHHS Office for Human Research ProtectionsDHHS Office for Human Research Protections http://ohrp.osophs.dhhs.gov/http://ohrp.osophs.dhhs.gov/

IRB RegistrationIRB RegistrationAssurance FilingAssurance FilingPolicy GuidancePolicy GuidanceCompliance OversiteCompliance OversiteEducational MaterialsEducational MaterialsWorkshopsWorkshops


Resources

45 CFR 46 – Protection of Human Subjects45 CFR 46 – Protection of Human Subjects http://ohrp.osophs.dhhs.gov/http://ohrp.osophs.dhhs.gov/

humansubjects/guidance/45cfr46.htmhumansubjects/guidance/45cfr46.htmTo what does the policy applyTo what does the policy applyDefinitionsDefinitionsSubpart A – “Common Rule”Subpart A – “Common Rule”Subparts B-D – Vulnerable populationsSubparts B-D – Vulnerable populations


Resources

Belmont ReportBelmont Report http://ohrp.osophs.dhhs.gov/http://ohrp.osophs.dhhs.gov/

humansubjects/guidance/belmont.htmhumansubjects/guidance/belmont.htm Declaration of HelsinkiDeclaration of Helsinki

http://www.wma.net/e/policy/17c.pdfhttp://www.wma.net/e/policy/17c.pdf Nuremberg CodeNuremberg Code

http://www.dreamscape.com/morgana/http://www.dreamscape.com/morgana/ nurmberg.htmnurmberg.htm

http://www.dreamscape.com/morgana/


Protection of Human Subjects Protection of Human Subjects Care and Use of Animals in ResearchCare and Use of Animals in Research Stewardship of Federal FundsStewardship of Federal Funds Scientific MisconductScientific Misconduct Conflict of InterestConflict of Interest Application of Intellectual PropertyApplication of Intellectual Property Environmental Health and Safety IssuesEnvironmental Health and Safety Issues

Care and Use of Animals in Research

Public Involvement

1962 – 1962 – Silent SpringSilent Spring, by Rachel Carson, by Rachel Carson 1966 – LIFE magazine article1966 – LIFE magazine article


Public Involvement 1982 – Silver Spring Monkey case1982 – Silver Spring Monkey case

Deafferentation StudyDeafferentation Study Infiltration of labInfiltration of lab Photos and affidavitsPhotos and affidavits Search warrant and seizureSearch warrant and seizure PETA on the mapPETA on the map


Public Involvement

1983 –Head Trauma in Monkeys1983 –Head Trauma in Monkeys Animal Liberation Front burglaryAnimal Liberation Front burglary

6 years of research materials6 years of research materials60 hours of videotape60 hours of videotapeResearch animalsResearch animalsExtensive facility and equipment Extensive facility and equipment

damagedamage


Government Involvement

1962 – NIH Contract – first 1962 – NIH Contract – first GuideGuide 1966 – Laboratory Animal Welfare Act 1966 – Laboratory Animal Welfare Act

Covers warm blooded animals used in Covers warm blooded animals used in teaching, research and testingteaching, research and testing

Excludes rats, mice and birdsExcludes rats, mice and birds Enforced by the USDAEnforced by the USDA Annual InspectionsAnnual Inspections



1985 – Health Research Extension Act1985 – Health Research Extension Act 1985 - Public Health Service Policy1985 - Public Health Service Policy

Covers live vertebrate animals when PHS Covers live vertebrate animals when PHS funds (NIH, NSF, HRSA…) are involvedfunds (NIH, NSF, HRSA…) are involved

Enforced by the Office of Laboratory Enforced by the Office of Laboratory Animal Welfare (OLAW), NIHAnimal Welfare (OLAW), NIH



PHS Policy and AWA establish the PHS Policy and AWA establish the Institutional Animal Care and Use Institutional Animal Care and Use Committee as the authorizing bodyCommittee as the authorizing body

IACUC ResponsibilitiesIACUC Responsibilities MembershipMembership Review proposed studiesReview proposed studies ReportReport



PHS through the PHS through the GuideGuide requires: requires: Occupational Health Program for Animal Occupational Health Program for Animal

WorkersWorkers Training for Animal WorkersTraining for Animal Workers



Become familiar with the requirements of research Become familiar with the requirements of research involving animalsinvolving animals

Maintain a rapport with IACUC administratorsMaintain a rapport with IACUC administrators Assist investigator in applying for IACUC Assist investigator in applying for IACUC

approvalapproval Ensure IACUC approval is obtained Ensure IACUC approval is obtained Ensure training requirements are met for animal Ensure training requirements are met for animal

workersworkers


Resources Office of Laboratory Animal WelfareOffice of Laboratory Animal Welfare

http://grants1.nih.gov/grants/olaw/olaw.htmhttp://grants1.nih.gov/grants/olaw/olaw.htmPHS Policy TutorialPHS Policy TutorialIndex to OLAW GuidanceIndex to OLAW GuidanceOLAW LISTSERVOLAW LISTSERVTraining MaterialsTraining Materials


Resources Guide for the Care and Use of Laboratory Guide for the Care and Use of Laboratory

Animals (1996)Animals (1996) http://www.nap.edu/readingroom/books/http://www.nap.edu/readingroom/books/

labrats/contents.htmllabrats/contents.html Institutional Policies and Responsibilities Institutional Policies and Responsibilities Animal Environment, Housing, and Animal Environment, Housing, and

Management Management Veterinary Medical Care Veterinary Medical Care Physical Plant Physical Plant


Resources PHS Policy on Humane Care and Use of PHS Policy on Humane Care and Use of

Laboratory AnimalsLaboratory Animals http://grants1.nih.gov/grants/olaw/http://grants1.nih.gov/grants/olaw/

references/phspol.htmreferences/phspol.htmApplicabilityApplicabilityDefinitions Definitions Implementation by InstitutionsImplementation by InstitutionsImplementation by PHSImplementation by PHS


Resources

Association for Assessment and Association for Assessment and Accreditation of Laboratory Animal Care, Accreditation of Laboratory Animal Care, International (AAALAC, International)International (AAALAC, International) http://www.aaalac.org/http://www.aaalac.org/

Represents qualityRepresents qualityPromotes scientific validityPromotes scientific validityRecruiting toolRecruiting tool


Protection of Human Subjects Protection of Human Subjects Care and Use of Animals in ResearchCare and Use of Animals in Research Stewardship of Federal FundsStewardship of Federal Funds Scientific MisconductScientific Misconduct Conflict of InterestConflict of Interest Environmental Health and Safety IssuesEnvironmental Health and Safety Issues

Stewardship of Federal Funds

How? How? How? How Funds will be ExpendedHow Funds will be Expended

Fiscal managementFiscal management Charging practicesCharging practices

How Research will be ConductedHow Research will be Conducted Research integrityResearch integrity Conflict of InterestConflict of Interest

How Research Outcome will Benefit the PublicHow Research Outcome will Benefit the Public Encourage application of intellectual propertyEncourage application of intellectual property Share outcome to spawn new researchShare outcome to spawn new research


OMB Circulars

OMB A-110OMB A-110 Standard for obtaining consistency and Standard for obtaining consistency and

uniformity among Federal agencies uniformity among Federal agencies Applicable to institutions of higher Applicable to institutions of higher

education, hospitals, and other non-profit education, hospitals, and other non-profit organizationsorganizations


OMB Circulars

OMB A-21OMB A-21 Cost Principles for Educational Cost Principles for Educational

InstitutionsInstitutions OMB A-122OMB A-122

Cost Principles for Non-Profit Cost Principles for Non-Profit OrganizationsOrganizations


OMB Circulars

OMB A-21 and A-122OMB A-21 and A-122 Define the financial framework for Define the financial framework for

administering federally sponsored researchadministering federally sponsored research Describe the basis for calculating facilities Describe the basis for calculating facilities

and administrative costs (F&A; indirect)and administrative costs (F&A; indirect) Provide guidance for determining how to Provide guidance for determining how to

charge specific, common costscharge specific, common costs


Where Can Things Go Wrong?

During Post-AwardDuring Post-Award Direct ChargingDirect Charging Cost TransfersCost Transfers Effort ReportingEffort Reporting Cost SharingCost Sharing


Direct Charges Must Measure Up

The yard (meter) stickThe yard (meter) stick ReasonableReasonable AllocableAllocable ConsistentConsistent AllowableAllowable


Universal Truths

Brush your teeth before bedBrush your teeth before bed An apple a day keeps the doctor awayAn apple a day keeps the doctor away Don’t swim for 1 hour after eatingDon’t swim for 1 hour after eating Look both ways before you cross the streetLook both ways before you cross the street I before E except after CI before E except after C Reasonable, Allocable, Consistent and Reasonable, Allocable, Consistent and

AllowableAllowable

© 2001 Arthur Andersen


Reasonable

Prudent Person Rule (A-21 & A-122)Prudent Person Rule (A-21 & A-122) ““A cost may be considered reasonable if A cost may be considered reasonable if

the nature of the goods or services the nature of the goods or services acquired or applied, and the amount acquired or applied, and the amount involved therefore, reflect the action that involved therefore, reflect the action that a prudent person would have taken under a prudent person would have taken under the circumstances prevailing at the time the circumstances prevailing at the time the decision to incur the cost was made.”the decision to incur the cost was made.”


Allocable A cost is allocable to a Federal award if it is treated A cost is allocable to a Federal award if it is treated consistentlyconsistently

with other costs incurred for the same purpose in like with other costs incurred for the same purpose in like circumstances and if it:circumstances and if it:

Is incurred specifically for the award;Is incurred specifically for the award; Benefits both the award and other work and Benefits both the award and other work and

can be distributed in reasonable proportion; or can be distributed in reasonable proportion; or Is necessary to the overall operation of the Is necessary to the overall operation of the

organization, although a direct relationship to organization, although a direct relationship to any particular cost objective cannot be shown.any particular cost objective cannot be shown.


Consistent and Allowable ConsistentConsistent

Similar cost incurred in like circumstances Similar cost incurred in like circumstances must be treated consistentlymust be treated consistently

AllowableAllowable Not otherwise specified as unallowableNot otherwise specified as unallowable ““The fact that a cost requested in a budget is The fact that a cost requested in a budget is

awarded, as requested, does not ensure a awarded, as requested, does not ensure a determination of allowability. The determination of allowability. The organization is responsible for presenting organization is responsible for presenting costs consistently and must not include costs costs consistently and must not include costs associated with their F&A rate as direct associated with their F&A rate as direct costs.”costs.”

• NIH GPS (03/01) NIH GPS (03/01)



Become familiar with the OMB Circulars Become familiar with the OMB Circulars and Institutional Policiesand Institutional Policies

Assist investigator during the budget Assist investigator during the budget formulationformulation

Review the budget Review the budget Develop tests for departmental Develop tests for departmental

administrators administrators Perform internal targeted reviewsPerform internal targeted reviews


Resources Office of Management and BudgetOffice of Management and Budget

OMB A-110OMB A-110

http://www.whitehouse.gov/omb/circulars/http://www.whitehouse.gov/omb/circulars/a110/a110.htmla110/a110.html

OMB A-122OMB A-122

http://www.whitehouse.gov/omb/circulars/http://www.whitehouse.gov/omb/circulars/a122/a122.htmla122/a122.html

OMB A-21OMB A-21

http://www.whitehouse.gov/omb/circulars/a02http://www.whitehouse.gov/omb/circulars/a021/a0211/a021

. html. html

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

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


Resources

NIH Grants Policy StatementNIH Grants Policy Statement http://grants.nih.gov/grants/policy/http://grants.nih.gov/grants/policy/

nihgps_2001/nihgps_2001/



Scientific MisconductScientific Misconduct

SCIENCE IS A COMMUNITY SCIENCE IS A COMMUNITY BASED ON TRUSTBASED ON TRUST

““Most Americans see a strong science as Most Americans see a strong science as essential to a successful future. Yet that essential to a successful future. Yet that generous social support is based on the generous social support is based on the

premise that science will be done premise that science will be done honestly and that mistakes will be honestly and that mistakes will be

routinely identified and corrected.”routinely identified and corrected.”

President, National Academy President, National Academy of Sciences, 1989of Sciences, 1989



INTEGRITYINTEGRITY

1.1. The condition of having no part or element The condition of having no part or element taken away or wanting; undivided or taken away or wanting; undivided or unbroken state; material wholeness, unbroken state; material wholeness, completeness, entirety.completeness, entirety.

2.2. The condition of not being marred or The condition of not being marred or violated; unimpaired or uncorrupted violated; unimpaired or uncorrupted condition; original perfect state; soundness.condition; original perfect state; soundness.

The Oxford English Dictionary, 1933The Oxford English Dictionary, 1933

““The right to search for truth The right to search for truth

implies also a duty; implies also a duty;

one must not conceal any partone must not conceal any part

of what one has of what one has

recognized to be true.”recognized to be true.”

- AlbertAlbert EinsteinEinstein


PHS Reportable Misconduct:PHS Reportable Misconduct:

Fabrication, falsification, plagiarism, or other Fabrication, falsification, plagiarism, or other practices that seriously deviate from those that practices that seriously deviate from those that are commonly accepted within the scientific are commonly accepted within the scientific community for proposing, conducting, or community for proposing, conducting, or reporting research. It does not include honest reporting research. It does not include honest error or honest differences in interpretation or error or honest differences in interpretation or judgment of data.judgment of data.

Scientific Misconduct

DATA COLLECTION, MANAGEMENT AND RECORD KEEPING


Data Collection and PresentationData Collection and Presentation

TrimmingTrimming

CookingCooking

ForgeryForgery

PlagiarismPlagiarism

““Trimming: the smoothing of Trimming: the smoothing of irregularities to make the data irregularities to make the data look extremely accurate and look extremely accurate and precise.”precise.”

““-Honor in Science” Sigma Xi (1986)-Honor in Science” Sigma Xi (1986)


““Cooking: retaining only Cooking: retaining only those results that fit the those results that fit the theory and discarding theory and discarding others.”others.”



““Forging: inventing some or all Forging: inventing some or all of the research data that are of the research data that are reported and even reporting reported and even reporting experiments to obtain data that experiments to obtain data that were never performed.”were never performed.”



Plagiarism is the Plagiarism is the misappropriation of another misappropriation of another individual’s thoughts, ideas, or individual’s thoughts, ideas, or writings and claiming them as writings and claiming them as one’s own.one’s own.


Scientific MisconductScientific Misconduct AccountabilityAccountability

The laboratory notebook The laboratory notebook represents the final authority on represents the final authority on data collection, manipulation, and data collection, manipulation, and presentation.presentation.


AuthorshipAuthorship

Authorship on a scientific paper Authorship on a scientific paper should be limited to those should be limited to those individuals who have contributed individuals who have contributed directly to the design and directly to the design and execution of the experiments and execution of the experiments and who have participated in the who have participated in the preparation of the manuscript.preparation of the manuscript.



Conflict of Interest

A Body with Many Heads Public ExpectationsPublic Expectations

Protect SubjectsProtect Subjects Preserve TrustPreserve Trust Promote ProgressPromote Progress

Bioethicists ConcernsBioethicists Concerns Profits may cloud scientific integrityProfits may cloud scientific integrity Experiments may be pushed that might Experiments may be pushed that might

not be safenot be safe


It’s About Public Trust

Longstanding interest in objectivity in Longstanding interest in objectivity in research and financial conflict of interestresearch and financial conflict of interest

Key Question: “Is the situation likely to Key Question: “Is the situation likely to interfere or interfere or appearappear to interfere with the to interfere with the independent judgment one is supposed to independent judgment one is supposed to show as a professional performing official show as a professional performing official duties?duties?


Significant Financial Interest

Anything of monetary value, including but Anything of monetary value, including but not limited to, salary or other payments for not limited to, salary or other payments for services; equity interests; and intellectual services; equity interests; and intellectual property rightproperty right

> $10,000 or > 5% ownership interest for > $10,000 or > 5% ownership interest for any one enterprise or equityany one enterprise or equity


1999 – University of Pennsylvania 1999 – University of Pennsylvania Researchers testing new way to replace Researchers testing new way to replace

defective genes to treat enzyme disorders. defective genes to treat enzyme disorders. 18 year old Jesse Gelsinger died from the 18 year old Jesse Gelsinger died from the gene therapy studygene therapy study

The university held equity in the company The university held equity in the company developing the drug, and the lead doctor developing the drug, and the lead doctor held one-third of its shares of stockheld one-third of its shares of stock


Significant Financial Interest Disclosure of Significant Financial InterestDisclosure of Significant Financial Interest

Funding by NIH or NSFFunding by NIH or NSF Includes faculty, spouse, dependent Includes faculty, spouse, dependent

childrenchildren Declarations are made annually or as new Declarations are made annually or as new

significant financial interests are obtainedsignificant financial interests are obtained


Significant Financial Interest Interest must beInterest must be

Managed;Managed; Reduced; orReduced; or EliminatedEliminated

Management PlanManagement Plan Include brief, general explanation of Include brief, general explanation of

actions taken butactions taken butExcludeExclude personal financial data personal financial data

NIH GMO notified; NSF notified only if can’t NIH GMO notified; NSF notified only if can’t managemanage


Significant Financial Interest National Institutes of Health researchersNational Institutes of Health researchers 900 current and former scientists collected 900 current and former scientists collected

$8.9 M in royalties for drugs and inventions $8.9 M in royalties for drugs and inventions they discovered while working at NIHthey discovered while working at NIH

Until recently, no disclosure required to Until recently, no disclosure required to clinical trials subjectsclinical trials subjects


Significant Financial Interest GI physician (M. Wolfe) at Boston University asked GI physician (M. Wolfe) at Boston University asked

to review data comparing Celebrex with two older to review data comparing Celebrex with two older arthritis medicationsarthritis medications

Favorable JAMA reviewFavorable JAMA review One year later, while serving on FDA advisory One year later, while serving on FDA advisory

committee, Wolfe reviewed data again and found committee, Wolfe reviewed data again and found the study ran for 1 year, not 6 months, and benefits the study ran for 1 year, not 6 months, and benefits of Celebrex goneof Celebrex gone

Pharmaceutical company suppression of negative Pharmaceutical company suppression of negative datadata



Become familiar with PHS requirements Become familiar with PHS requirements and Institutional policyand Institutional policy

Assist Investigator in disclosing significant Assist Investigator in disclosing significant financial interestsfinancial interests

Notify Grants Management when Notify Grants Management when appropriateappropriate

Ensure annual disclosureEnsure annual disclosure


Resources

Conflict of Interest (NIH, OER)Conflict of Interest (NIH, OER) http://grants1.nih.gov/grants/policy/http://grants1.nih.gov/grants/policy/

emprograms/overview/ep-coi.htmemprograms/overview/ep-coi.htmNIH Grants Policy StatementNIH Grants Policy StatementFAQsFAQs


Resources

PHS Policy (42CFR50)PHS Policy (42CFR50) http://www.access.gpo.gov/nara/cfr/http://www.access.gpo.gov/nara/cfr/

waisidx_01/42cfr50_01.htmlwaisidx_01/42cfr50_01.htmlApplicabilityApplicabilityDefinitionsDefinitionsInstitutional ResponsibilitiesInstitutional ResponsibilitiesManagement of Conflicting InterestsManagement of Conflicting Interests


Resources

New England Journal of MedicineNew England Journal of Medicine Volume 346:285-287 Jan. 24, 2002Volume 346:285-287 Jan. 24, 2002

Association of American Medical Association of American Medical Colleges Task Force report discussionColleges Task Force report discussion

BackgroundBackground


Resources

GAO (2001): Report on Conflict of Interest GAO (2001): Report on Conflict of Interest in Biomedical Researchin Biomedical Research Study of UniversitiesStudy of Universities

http://www.aau.edu/research/GAO.pdf http://www.aau.edu/research/GAO.pdf


Resources

DHHS (5/05/2004): Financial Relationships DHHS (5/05/2004): Financial Relationships and Interest in Research Involving Human and Interest in Research Involving Human Subjects: Guidance for Human Subject Subjects: Guidance for Human Subject ProtectionProtection Issues for Institutions, Investigators and Issues for Institutions, Investigators and

IRBsIRBshttp://www.hhs.gov/ohrp/http://www.hhs.gov/ohrp/

humansubjects/finreltn/fguid.pdfhumansubjects/finreltn/fguid.pdf



Environmental Health and Safety

Regardless of who funds the workRegardless of who funds the work The Institution is absolutely responsible for:The Institution is absolutely responsible for:

Health and Safety of faculty, staff and Health and Safety of faculty, staff and students students

Environmental ComplianceEnvironmental Compliance


Safe workplace is obligation of grant awardSafe workplace is obligation of grant award


Major Federal Laws and How they affect research

Occupational Safety and Health ActOccupational Safety and Health Act Select Agent Laws and regulationsSelect Agent Laws and regulations Hazardous Waste Law (RCRA)Hazardous Waste Law (RCRA) Toxic Substances Control ActToxic Substances Control Act


Major Federal Laws and How they affect research Occupational Safety and Health Occupational Safety and Health

ActAct Agency: U. S. Occupational Agency: U. S. Occupational

Safety and Health AdministrationSafety and Health Administration Chemical Hygiene Plans Chemical Hygiene Plans

(OSHA 29 CFR 1910.1450)(OSHA 29 CFR 1910.1450) control exposure to control exposure to

hazardous chemicalshazardous chemicals additional requirements for additional requirements for

particularly hazardous particularly hazardous chemicalschemicals

required for select agent required for select agent toxinstoxins

IMPORTANCE OF SECURITYTime Line of Using Select Agents

Bubonic Plague Samples Missing in Texas

2000

1339-1351

1763

1994-1995

1977

Six more arrested in London Ricin poison find

20012003

2003


Select Agent Laws and regulations Biological or chemical Biological or chemical

that are potential that are potential weapons of mass weapons of mass destruction.destruction.

ExamplesExamples

RicinRicin AnthraxAnthrax SmallpoxSmallpox Ebola VirusesEbola Viruses

Ricin

Anthrax Spores


Major Federal Laws and How they affect research

Select Agent Laws and regulationsSelect Agent Laws and regulations Security Security

Physical Security - locked storage Physical Security - locked storage areas, locked labs, locked buildingsareas, locked labs, locked buildings

Inter and Intra facility transfersInter and Intra facility transfersRisk assessment for PI and lab staffRisk assessment for PI and lab staffFacility risk assessment and security Facility risk assessment and security

plansplans


Major Federal Laws and How they affect research Resource Resource

Conservation & Conservation & Recovery Act (i.e. Recovery Act (i.e. Hazardous Waste Law Hazardous Waste Law (RCRA)(RCRA)

Agency: US Environmental Agency: US Environmental Protection AdministrationProtection Administration


Radiation Safety

Standards for Protection Against RadiationStandards for Protection Against Radiation Occupational Exposure LimitsOccupational Exposure Limits Exposure Limits to Members of the Exposure Limits to Members of the

PublicPublic Release Limits to the EnvironmentRelease Limits to the Environment


Maintain rapport with the Safety department Maintain rapport with the Safety department Be aware of approval processes for chemical, Be aware of approval processes for chemical,

biological, and radioactive materialsbiological, and radioactive materials Identify hazards to Safety before grant submitted. Identify hazards to Safety before grant submitted.

May be able to address hazard reduction in grantMay be able to address hazard reduction in grant Ensure approvals are obtained Ensure approvals are obtained Ensure training requirements are met for all Ensure training requirements are met for all

personnel personnel Be aware of PI and Institutional responsibilities and Be aware of PI and Institutional responsibilities and

associated processes and documentationassociated processes and documentation


Resources

Biosafety in Microbiological and Biosafety in Microbiological and Biomedical Laboratories (BMBL)Biomedical Laboratories (BMBL) DHHSDHHS CDCCDC NIHNIH

http://www.cdc.gov/od/ohs/biosfty/bmbl4/bmbl4toc.htm

Environmental Health and SafetyResources NIH Guidelines for Research Involving NIH Guidelines for Research Involving

Recombinant DNA MoleculesRecombinant DNA Molecules DHHSDHHS NIH (OBA)NIH (OBA)

http://www4.od.nih.gov/oba/rac/guidelines/guidelines.html

Research Compliance in Perspective

How Many Times Have You Heard?

““But other research institutes and But other research institutes and Universities allow…”Universities allow…”

Managing an Institutional Compliance Program

Challenges Research is performed and administered Research is performed and administered

throughout the institution throughout the institution Departmental Administrators have other Departmental Administrators have other

responsibilitiesresponsibilities Inability to segregate instruction, research, and Inability to segregate instruction, research, and

patient care makes administration complexpatient care makes administration complex Knowledge of regulations and expectations are Knowledge of regulations and expectations are

limitedlimited Training on research compliance is often Training on research compliance is often ad hocad hoc

and not performed effectivelyand not performed effectively

Engaged ManagementHow to delegate responsibility and authority while still staying

in control

The Problem

Once an organization grows larger than a single person can manage, then management has to be delegated.When management tasks are split among many people, the need for coordination arises

The Challenge of Coordination

What has been delegated to whom?Am I supposed to write the report or is my boss?

What is each person’s level of authority?Am I supposed to make the decision or not?

What is the expectation for follow up and task completion?

What is the due date for the project?

Intra Organizational Communication

Between supervisor and supervised

Between peers in an organization

A consistent message for all branches of an organization

Who Does What?

The Supervisor needs to assign tasks (delegate) in a way that optimizes organizational productivity.Usually related areas of management responsibility are grouped for efficient delegation.

You don’t ask an accounting manager to handle a facilities task!

Principles of Engaged Management

1. Regular communication2. Progress reporting3. Goal-setting4. Problem identification5. Managerial support6. Mutual understanding of workload

and tasks

Regular Communication

The Monthly Management Report1. On time, every time.2. Three Sections:

• Accomplishments• Priorities (in priority order)• Need for support

Progress Reporting

1. What was accomplished.2. Who participated (peers,

subordinates, supervisor)3. Serves as a reminder at annual

performance review time4. Provides the opportunity to “toot

your own horn”.

Goal Setting1. Short-term goals2. Longer-term goals3. Forces employee to think about how

to allocate their time.4. Provides supervisor the discretion to

prioritize tasks differently as organizational demands change.

Problem Identification

What high priority goals seem to never get accomplished?What are the impediments to completion?Was the task inappropriately delegated?

Wrong person?Wrong department?Wrong time?

Managerial SupportShould the task have been delegated to this person?Are resources needed for completion?Does the delegator need to arbitrate?Would this task be more easily solved with a “team” approach?Is the level of authority appropriate?

Level of AuthorityEvery item has an appropriate level of

authorityType 1 – “Handle it, but keep me informed.”Type 2 – “You are responsible, but come to me for direction and support.”Type 3 – “I will take primary responsibility for this item, but it affects your area so you work with me as a team on it.”

Type 1

“Handle it, but keep me informed.”

Example: There is a water leak in a laboratory. The facilities manager is empowered to solve the problem, but by letting her supervisor know of the problem and its progress to resolution, the supervisor is not “blind sided”.

Type 2“You are responsible, but come to me for

direction and support.”

Example: A new PI wants a lab modified at a cost of $10,000. The facilities manager understands the problem, collects information, examines alternatives, but gets her supervisor to provide direction and participate in the decision.

Type 3“I will take primary responsibility for this

item, but it affects your area so you work with me as a team on it.”

Example: The Dean has decided to build a new building. The supervisor will have this as a long-term project, and the facilities manager will be an active participant and provide staff support to the supervisor.

Level of Authority Problems

Many problems arise because either an employee fails to exert authority when they should, or oversteps her/his authority.When in doubt, ASK!Level of Authority grows with time in job and as the employee grows in experience and judgment.

Mutual Understanding

Employee and supervisor gradually understand each other’s jobs, pressures, demands, and needs.Communication is regular and open.No surprises!Better decisions result when both parties are engaged in the management of the area.

The Monthly MeetingOn-site or off-site at employee’s option. Bring the report!Guaranteed private time. (“My boss cares about me!”)“How do you feel about your job, your career, the workload, your peers, your staff.“What can I do as your supervisor to make your job easier, or increase your job satisfaction?”

Additional Management Tools

ReportsWorkload statisticsCapacity planningTrendsTroubling e-mailsRequisitions!

Adapt the Tool to the People

One size doesn’t fit allFermentation manager VS MIS DirectorDegree of detail and frequency of reportingReport contentInclude reports of sub-organizational units

When the System Fails

People who refuse to be accountablePeople who refuse to be managedPeople who can’t plan, organize, or prioritize

Do’s

Insist on a consistent application of the programRead the reportsAsk questions / understandPut yourself in the other person’s shoesRecognize and reward progressSeek meaningful ways to be supportive

Instructions for Skill Practice Activity• Participants will work in groups of 3

• Each person will alternate between A, B and C• A = Principal• B = Respondent• C = Observer

• A’s will go first, followed by B’s with C’s going last

Practice 3 Key Points

• Participants will be asked to practice 3 key points from the HR session

– Evaluating Performance

– Delegation

– Scientist and the Human Resource

• Allow 9 minutes for each key point – each participant will have 3 minutes and then rotate their role

• The presenters will review the 3 key points when the participants have finished

1) Evaluating Performance

Three months ago you hired a new mailroom clerk and he is not working out as well as you expected. He started out fine but you find that he has called in sick the last two Mondays and has had to leave early on a number of days. You want to schedule a meeting with him to review his performance but feel a bit reluctant to do so because he is such a nice person and you do not want to antagonize him. What you do not realize is that your mailroom clerk has a very sick parent to care for.

2) Delegation

You have been asked to review a collaboration agreement that must go out tomorrow but are in the middle of finalizing your departmental budget that you promised to give to your finance officer by tomorrow at noon. It is your birthday today and a big party is planned for you this evening. There is only one other person who you can give any one of these jobs to in your department. He is in the middle of an important project and you have already spoken to him about being late in submitting it to you. What do you do?

3) Scientists and the Human Resource

Dr. Roy, your institution’s most senior research scientist appears at your desk on Monday morning with a new research associate whom he has just hired. He has not advised anyone at your institution about this and wants to charge his salary to a grant account that was closed two months ago. How do you respond to him and what steps do you take to straighten things out?

Intellectual Property & Technology Transfer

AgreementsA Glimpse into the Wild World of

Technology Transfer

Topics

• Invention Reports

• Confidential Disclosure Agreements (CDAs / NDAs)

• Material Transfer Agreements (MTAs)

• License Agreements

• Option Agreements

• Recap and Practical Matters

Invention Reports

Invention Reports• Report at Time of Invention – Does

Not Require “Reduction to Practice”• Obtain Written Assignments at Time of

Invention Report• Report Internally Prior to Public Disclosure

(Discussions, Collaborations, Publications, Proposals) – One Year Trigger

• Invention Report Helps to Support “First to Invent” Doctrine (U.S.)!

• Make Report as Broad / All-Encompassing as Possible – Don’t be Constrained by Patentability

Anatomy of an Invention Report

• Front Page Needs to be “at a Glance”– Report Date– Inventorship (Legal Name, Affiliation, Home

Address, Contact Info, & Citizenship) – MUST be Correct!

– Sponsorship (Sponsor Name, Contract/Grant #, Funding Period/ Dates, PI)

– Invention Title


• Invention Abstract

• Prior Art (Patents, Publications, Commercially Available Products & Services) – What Else is Out There & How & Why Yours is Better

• Detailed Invention Description – Broaden!

• Figures & Drawings

• Supporting Data / Reduction to Practice


• Public Disclosures – Prior & Planned

• Regulatory Approval Requirements – Does This Invention Require Regulatory Agency Approval, e.g., EPA, USDA, FDA, OSHA?

• Market Assessment – Potential Markets, Competition, Potential Licensees

• Personal Objectives - File Only, Desire Utility Patent, Commercialize Via License / Start-Up – If Start-Up, What Role?


• Signatures with Dates– Inventors– Witness – Needs to be Familiar with or

Understand Underlying Technology– Department Chairperson (Optional)– Office of Recordation


• Inventor Request for Waiver of Rights– For inventions created external to institution, or

without significant institutional resources– Inventor signatures Required

• List of Faculty Knowledgeable About Subject Matter Technical “Due Diligence”

Confidential Disclosure Agreements(CDAs)


• Also called Nondisclosure

Agreements (NDAs)

• One Direction Vs. Mutual (2-Way)

• One Party Vs. 2 Party Agreements

• One Mutual CDA Between 3 Parties is NOT the Same as Three 2-Party CDAs!

• Motivation for Institution is to Prevent Public Disclosure (Loss in Patent Rights)


• Motivation for Industry is to Protect Proprietary Information – Publication Restrictions!

• Require PI to Sign Letter of Understanding & Compliance – Needs to Educate ALL Who Are Involved in Handling Confidential Info

• Track / Monitor Dates – Issue Memo to PI When CDA is Terminated

• Watch out for: (a) Disclosure of Company’s Name, (b) Company’s “Business” (Strategies, Plans, Customers, Employee Names, etc.), (c) use of Company Info in Multi-Partner Proposals and Publications

Anatomy of a CDA

• Recitals – You have Rights, We Have Rights, You want Institution to Perform Research, What Defines “Confidential Information”

• Purpose of Confidential Info Disclosure = Research Only! No Other Purpose

• No Express or Implied License to Use Info

Anatomy of a CDA

• Info Provided to be Returned or Destroyed Upon Written Request

• Recipient to Use “Best Efforts to Preserve” – Remember that Faculty / Students/ Researchers Far More Likely to Slip Up Than Industry Counterpart!e.g. “Recipient shall use its best efforts to preserve the confidentiality… and shall use not less than reasonable care with respect to such Confidential Information…”

Anatomy of a CDA

• CAN Disclose the Following: (a) Available to Public, (b) Becomes Part of the Public Domain Through no Fault of Recipient, (c) Previously Lawfully Disclosed to Recipient, (d) Previously Developed Independently by Recipient – Require (c) and (d) to include “… as Proven with Written Records”

• Jurisdiction – Agreement Governed by Laws of Institution’s State (Usually State Law Requirement – Only Alternative is to Remain “Silent” on Issue)

Anatomy of a CDA

• Term of Agreement and Confidentiality Requirement - Shorter the Better for Institutions

• Assignment of Rights by Company Requires Institution’s Written Consent

• Agreement is Binding on all Employees of Company / Institution

• Typical “No Reps or Warranties”• Approved Signatures – Who’s Approved to Sign at

Your Institution?

Material Transfer Agreements(MTAs)

Material Transfer Agreements(MTAs)

• Usually for Exchange of Biological Materials / Animals – BUT Can Apply to Other Materials

• Most Institutions Have Different Agreements for Incoming and Outgoing Materials

• Know Who is Authorized to Sign for Your Institution – Faculty Typically See Review as “Red Tape” and May Sign to Expedite Receipt of Material

• Preserve Publication Rights!• Watch out for “Built-in” IP License / Assignment • Standardize Templates and Publish on Web to Expedite

Process & Prevent Negotiations Challenges

Anatomy of an MTA(For Outgoing Materials)

• Define Material to be Transferred (and Include all Derivatives, Modifications, and Improvements)

• Define Ownership of Material – Institution!• Recipient Agrees NOT to Transfer to Others

Without Institution’s Consent• Recipient Has Right to Use (& File Patents

for) Substances Created Using Materials ONLY IF Substances are NOT Derivatives / Modifications


• Modifications / Derivatives MAY be Distributed to Not-for-Profit or Government Agencies without Provider Approval ONLY for Research Purposes

• Modifications / Derivatives for Commercial Use Require License from Provider

• No Inherent License Rights

• Define Who Owns Resulting IP (“Yours, Mine, Ours”)


• MTA does NOT Alter any Previously Granted Rights to Material

• Provider’s Obligation to Fully Disclose ANY Health or Safety Risks / Precautions Known to be Associated with Materials

• Typical “No Reps or Warranties”

• Recipient Assumes ALL Liability for Use

• Jurisdiction of Law


• Recipient Agrees to Comply with ALL Laws and Regulations (Human / Animal Subjects, Export Control, etc.)

• Agreement Termination Provisions – Time + How to Dispose of Materials

• Fees Required – If Any

• Signatures

License Agreements

License AgreementsThe “Bread & Butter” of Tech Transfer

• Licenses & Assignments are Different

• Provide the Ability to Manufacture & Sell

• Exclusive Vs. Nonexclusive

• Perpetual Vs. Timed

• Worldwide Vs. Licensed

Territory

• Unlimited Use Vs. Field of Use

• Right to Sublicense


• Institution’s Internal Right to Use

Madey Vs. Duke University

• Institution’s Right to Publish

• Compensation Choices: Royalties, Fees, Equity, % of Profits, Good & Services (Barter)

• Patent Prosecution & Maintenance – Who Manages & Who Pays?


• Auditable Financial Records

• What Happens in the Event of Bankruptcy?

• How do you Handle Patent Infringers or an Infringement Case Against Licensee / Institution?

• Commercialization Plan / Milestones

• What are “Clawback Provisions”?


• Guard Against “Shell Game” & Other Tricks– All Products Sold Through Sublicensees– Collateralization of License for Debt– Sale / Merger of Company– Transfer of Rights to Subsidiaries– Definition of “Net Sales”– Definition of “Bundling”– Technology Workarounds

Anatomy of a License Agreement

• Recitals - “Soft Objectives” & SOPs• Definitions – Need to Clearly & Distinctly Define

Agreement Terms:– “Licensed Products and Processes”

– “Invention Rights” – Derivatives/Improvements Included?

– “Know How”

– “Net Sales Revenue” (Gross Sales Revenue Even Better!)

– “Licensed Field of Use”

– “Licensed Territory”

– “Internal Use”

Anatomy of a License Agreement• License Grant

– Exclusive or Nonexclusive– Perpetual or Time-Based– Field of Use– Right to Sublicense– Institution’s Right to Internal Use – Institution’s Right to Publications– Cross-license Rights– Force Any Additional Research Requirement to be

Governed by Separate Agreement(s)– Preserve Government Rights (Bayh-Dole, FAR/DFARS)– Ensure Compliance with all Regs (e.g. Export Control)


• Licensee Acknowledgement of Understanding– Add Clause that States that

Licensee Fully Investigated

Inventions / Invention Rights

- is Satisfied that Everything

is Accurate, Complete & Understood


• Compensation– Fees:

• How Much are Fees, and How

are They to be Paid? (Initial, Maintenance Fees)

– Royalties:• What Royalty %? Based on Gross/Net Sales? When

Payable? If Bundling Involved, Definition is Critical – How Does One Calculate the Right Amount?

• Sublicense Royalty Terms (%, When, How, Who Collects?)

Anatomy of a License Agreement• Compensation

– Equity:• Previously not Part of

License Compensation – Becoming More Prevalent

• Understand Who Holds Equity for Institution• Voting Vs. Nonvoting Stock• Common Vs. Preferred Stock• Membership Units Vs. Shares• Warrants / Options / Put• Board Representation – Observer Only Vs. Voting


• Patent Prosecution– Who Manages Filings, Prosecution & Maintenance?– Who Assumes the Costs?– Define How to Handle Termination of Agreement or

Abandonment of Rights

• Record Keeping and Reporting– Where are Records to be Stored?– Permit Inspection / Audits by Institution (or Designee)– Reporting Requirements for Commercialization Plan– Financial Reports Should be Sent to Institution Quarterly– Specify Penalty for Late Payments

Anatomy of a License Agreement• Statement to Prevent Public Disclosure

– Applies to Unpatented Technologies and CIPs / Divisionals (Derivatives / Improvements / Enhancements)

– Could Lose Patent Rights w/ Public Disclosure!– Use CDAs or Patent Filings Prior to Public Disclosure

• Adherence to Commercialization /Milestone Plan– Initial License Fee ($)– Delivery of Written Commercialization / Business Plan (w/

Identifiable Milestones)– Deadline for First Commercial Sale– Annual License Maintenance Fee– Failure of any Above Results in “Clawback”


• Patent Markings – Ensure all Commercial Products are Marked w/ Patent (or Patent Pending) Numbers

• Termination Provisions – Who Can Terminate, When, and What are Ramifications of Termination?– Nonpayment by Licensee

– Evidence of “Shell Game”

– Bankruptcy / Dissolution of Company

– How to Handle Inventory of Licensed Products AFTER Termination of License Agreement


• Patent Infringement– Decide Who Manages Process

and Who Pays– Decide How to Handle any

Resulting Awards

• Prohibition of Use of Institution’s Name – All Licensees WANT to Publicize Relationship w/ Institution to Provide Credibility, Stability, Reputation Enhancement, Validation


• Typical Warranties and Reps, Succession & Assignability, Indemnification

• Require Licensee to Have General Liability Insurance as Precautionary Measure – Mostly for Start-ups / Small Companies – Usually $1M per Claim, $3M in Aggregate

• Typical Notice Statement, Jurisdiction of Law, Compliance w/ Laws – e.g. Government IP Rights and Export Restrictions


• Signatures

• Attachment / Exhibit A :

Description of Invention(s)

& Patent(s)

• Attachment / Exhibit B :

Format for Commercialization / Business Plan Required

Option Agreements

Option Agreements

• Can be Separate Agreements or Embedded in Research Agreements

• Provides Period of Exclusivity While Technology is Being Evaluated

• Can Provide:– Right of First Refusal– Automatic Licensing Terms (Exclusive /

Nonexclusive) – OR – Ability to Negotiate on “Commercially Reasonable” Terms

Option Agreements

Example 1: Option Embedded in Research Agreement

Company Option. Pursuant to the terms of this Agreement, and provided that Company is not otherwise in default of this Agreement or any Task Statement hereunder, Company shall have the option, for Project Inventions, to an exclusive license as described in this Section X (the “Option”).

Option Agreements

• Example 2: Separate Option (or “Exclusivity”) Agreement

– Company pays $50,000 cash for Right of Exclusivity for a Period of 6 Months (to Evaluate Technology)

– At End of Exclusivity Period, Company has Ability to Exercise Option (Usually 30 – 60 Day Window) for an Exclusive License to Technology at the Following Terms…

Recap and Practical Matters


• Report Inventions BEFORE Public Disclosure• Obtain Written Assignments• Broaden Invention Disclosures to Increase Inherent

Value • Multiple 2-Party CDAs NOT Same as 1 Mutual

CDA Among the Parties• Use CDAs to Preserve Patent Rights• Educate PIs on Ramifications of CDAs and Solicit

Their Help in Educating Others on Project


• Provide Heads-Up When CDA Terminates• Use MTAs, but Watch out for Inherent IP Rights

(Loss) or Publication Restrictions• Consider Export Control Issues for all Material

Exchanges• Typically Different MTAs for Incoming and

Outgoing Materials & For-Profit Vs. Not-For-Profit Use

• No MTA is ALWAYS Better than Bad MTA!


• Understand Difference Between Licenses & Assignments

• Preserve Institution’s Right to “Internal Use” and Publications

• Every “Deal” is Different – Standard License Templates Will NOT Usually Work

• Know the Pros & Cons of Having Licensee Control Patent Prosecution Vs. Institution

• Provide Clawback Capability in Licenses


• Watch out for Shell Game & Other Tricks by Licensees

• Use Option Agreements / Clauses to Prevent Problems Down the Road – Establish Pipeline!

• Use Option Agreements / Clauses to get Paid for Period of Exclusivity – Time = CASH!

• Always Seek Advice from Tech Transfer / Legal Advisors Within Institution When Uncertain

• DON’T be Afraid of IP – It’s NOT as Scary as it Seems!

Financial Reporting or Financial Reporting or “Financial Reports Even a “Financial Reports Even a Scientist Can Understand”Scientist Can Understand”

This session will explore creative ways to present the "right data" at the "right time" in the "right format" to a wide variety of audiences, e.g., PI's, department Chair, various central institution offices.

The "Sunshine System" a series of tools developed to download central financial data to build a "Sunshine" system (rather than a "shadow" system) will be discussed.

Learn how to provide graphical financial data to PIs and top management, and compliance data to research administrators. See how inexpensive PC databases can be used to generate "anywhere, anytime" graphical reports from your department via the Web.

Financial Reporting Includes

1. Budgets2. Expenditures (Actual Costs and Encumbrances)3. Balance to Spend4. Forecasting (Burn Rate Chart)5. Budget Carry Forwards and Other Issues6. Reporting Tools7. Integrating Financial and Non-Financial Data

1. Which Budget? Budget for the project period. Budget for the fiscal year. Budget for the fiscal year + unexpended

carry forward. Budget for the direct cost portion only or

budget for the Direct + Indirect. Budget for the funded portion + the cost

share portion.

2. Best Practices for Budgets Know which accounts will allow unexpended

balances to carry forward versus those that won’t because you will manage these accounts differently.

When two or more accounts are equally appropriate for an expenditure, charge the expense to the account that does not permit carry forward!

2. Which Expenditures? Current period expenditures. Expenditures for the fiscal year or project

year? Expenditures for the fiscal year +

Encumbrances. If salaries are encumbered, HOW? Are “time benefits” (e.g. vacation time)

accrued?

Unanticipated Source of FundsUnanticipated Source of Funds

FROM THE DESK OF IKE EGO UNION BANK OF NIGERIA telephone FROM THE DESK OF IKE EGO UNION BANK OF NIGERIA telephone numbers 234-1-7766371 numbers 234-1-7766371

ATTENTION: DEAR, ATTENTION: DEAR,

STRICTLLY A PRIVATE BUSINESS PROPOSAL I AM IKE EGO, THE STRICTLLY A PRIVATE BUSINESS PROPOSAL I AM IKE EGO, THE MANAGER, BILLS AND EXCHANGE AT THE FOREIGN MANAGER, BILLS AND EXCHANGE AT THE FOREIGN REMITTANCE DEPARTMENT OF THE UNION BANK OF NIGERA REMITTANCE DEPARTMENT OF THE UNION BANK OF NIGERA PLC. I AM WRITING THIS LETTER TO ASK FOR YOUR SUPPORT PLC. I AM WRITING THIS LETTER TO ASK FOR YOUR SUPPORT AND COOPERATION TO CARRY OUT THIS BUSINESS AND COOPERATION TO CARRY OUT THIS BUSINESS OPPORTUNITY IN MY DEPARTMENT. WE DISCOVERED AN OPPORTUNITY IN MY DEPARTMENT. WE DISCOVERED AN ABANDONED SUM OF $15,000.000.00 (FIFTEEN MILLION UNITED ABANDONED SUM OF $15,000.000.00 (FIFTEEN MILLION UNITED

STATES DOLLARSSTATES DOLLARS . . . . . . . . . . . .

IN AN ACCOUNT THAT BELONGS TO ONE OF OUR FOREIGN IN AN ACCOUNT THAT BELONGS TO ONE OF OUR FOREIGN CUSTOMERS WHO DIED ALONG WITH HIS ENTIRE FAMILY OF A CUSTOMERS WHO DIED ALONG WITH HIS ENTIRE FAMILY OF A WIFE AND TWO CHILDREN IN NOVEMBER 1997 IN A PLANE WIFE AND TWO CHILDREN IN NOVEMBER 1997 IN A PLANE CRASH. SINCE WE HARD OF HIS DEATH, WE HAVE BEEN CRASH. SINCE WE HARD OF HIS DEATH, WE HAVE BEEN EXPECTING.HIS NEXT-OF-KIN TO COME OVER AND PUT CLAIMS EXPECTING.HIS NEXT-OF-KIN TO COME OVER AND PUT CLAIMS FOR HIS MONEY AS THE HEIR, BECAUSE WE CANNOT RELEASE FOR HIS MONEY AS THE HEIR, BECAUSE WE CANNOT RELEASE THE FUND FROM HIS ACCOUNT UNLESS SOMEONE APPLIES THE FUND FROM HIS ACCOUNT UNLESS SOMEONE APPLIES FOR CLAIM AS THE NEXTOF-KIN TO THE DECEASED AS FOR CLAIM AS THE NEXTOF-KIN TO THE DECEASED AS INDICATED IN OUR BANKING GUIDELINES. UNFORTUNATELY, INDICATED IN OUR BANKING GUIDELINES. UNFORTUNATELY, NEITHER THEIR FAMILY MEMBER NOR DISTANT RELATIVE HAS NEITHER THEIR FAMILY MEMBER NOR DISTANT RELATIVE HAS

EVER APPEARED TO CLAIM THE SAID FUND. . . . .EVER APPEARED TO CLAIM THE SAID FUND. . . . . Send your reply through; [email protected] your reply through; [email protected]

2. Best Practices for Expenditures Understand exactly how expenditures are

charged to your accounts.– Labor– Non-recurring costs (e.g. tuition remission)– Summer salaries

Know “hidden costs” during account close-out (accrued vacation time).

2. Classification of Costs2. Classification of Costs

Costs

Allowable Unallowable

Direct

Costs

Indirect

Costs

2. Best Practices - Expenses Develop a “cheat sheet” for your PIs and others to

tell them how to code real-life costs in the system so that costs are accurate.

Clearly define how to handle unallowable costs. Know which costs are unallowable and isolate them from allowable costs. Use separate POs, requisitions, object codes, and even account numbers.

Be ready to show auditors that unallowables are segregated!

3. Balance to Spend

What does EVERY PI want to Know?

3. Balance to Spend

How Much Money is Left?

3. Balance to Spend Thinking Deeper

How much money is left? Will the budgeted funds last to the project

end date? Can overdrafts in one expense area be

covered by surpluses in another area? Is the expenditure rate increasing or

decreasing?

3. Balance to Spend Thinking Deeper

To answer these questions you will need more information than you typically see

in a “Project Status Report”!

3. Project Status Report Budget Actual expenses, this period Actual expenses, year-to-date

(whatever that means!) Encumbrances Free Balance

O/C Description Budget Actual Encumbrance Free Balance

11000 Salaries & Wages 200,000 53,582 41,567 104,851

12000 Fringe Benefits 60,000 14,629 11,444 33,927

13000 Supplies 35,000 17,244 1,500 16,256

17000 Travel 8,000 5,344 2,656

18000 Equipment 40,000 - 40,000

Total 343,000 90,799 54,511 197,690

3. The Project Status Report3. The Project Status Report The typical financial reporting tool a system The typical financial reporting tool a system

provides for a PIprovides for a PI Answers the question “How much money is left?”Answers the question “How much money is left?” Budget/Actual/Encumbrance/Free BalanceBudget/Actual/Encumbrance/Free Balance Backup reports for actual and encumbrance Backup reports for actual and encumbrance

detaildetail This is an important tool. But not the only tool!This is an important tool. But not the only tool!

3. Project Status Report Problems3. Project Status Report Problems Doesn’t differentiate between one-time Doesn’t differentiate between one-time

costs and recurring (tuition remission, costs and recurring (tuition remission, equipment)equipment)

Typically doesn’t consider trendsTypically doesn’t consider trends Doesn’t account for companion funding Doesn’t account for companion funding

(cost sharing)(cost sharing) Doesn’t account for budget increments Doesn’t account for budget increments

(non-competing renewals)(non-competing renewals)

3. The “Burn Rate” Approach Balance remaining is adjusted for known,

unexpended amounts Balance to Spend is compared to the “burn

rate” to see if the time the money will last matches the time the grant is to run.

Projected unexpended balance is compared to agency guidelines for maximum carry forward.

O/C Description Budget Actual Encumbrance Free Balance

11000 Salaries & Wages 200,000 53,582 41,567 104,851

12000 Fringe Benefits 60,000 14,629 11,444 33,927

13000 Supplies 35,000 17,244 1,500 16,256

17000 Travel 8,000 5,344 2,656

18000 Equipment 40,000 - 40,000

Total 343,000 90,799 54,511 197,690

Months 12 3

Burn Rate 28,583 30,266

4. Forecasting

Where your accounts are TODAY is irrelevant!

Where are they going to be at the project completion date?

4. Using Burn Rate for Forecasting Is forecasting a part of your management

system? For many organizations it is not. What do your management reports tell you

and do your PIs understand them? Who are the “financial wizards” at your

organization and what tools do they use? It is simple to use burn rates to forecast!

O/C Description Budget Actual Actual to Completion Free Balance

11000 Salaries & Wages 200,000 53,582 214,328 (14,328)

12000 Fringe Benefits 60,000 14,629 58,516 (13,145)

13000 Supplies 35,000 17,244 68,976 (51,220)

17000 Travel 8,000 5,344 21,376 (18,720)

18000 Equipment 40,000 - 40,000 -

Total 343,000 90,799 403,196 (97,413)

Months 12 3

Burn Rate 28,583 30,266

4. Burn Rate Chart Uses Project Status Report data,

supplemented with … Burn rates applied to future months Start and End dates are clearly recognized A visual tool that “even a Scientist can

understand”!

Burn Rate

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Jan-01 Feb-01 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01

Incr Budget Cum Exp Proposal Budget Total Budget Cum + Proj

End Date

Maximum Aw ard Amount

Incremental Funding

Project Budget

Actual Expense

4. The “Burn Rate” Chart4. The “Burn Rate” Chart Primary graphical financial toolPrimary graphical financial tool Produced automaticallyProduced automatically Shows past, present, and futureShows past, present, and future Accepted by PIs as tool of choiceAccepted by PIs as tool of choice Encourages labor projectionsEncourages labor projections Shows: remaining funds, historical spending Shows: remaining funds, historical spending

pattern, increments, projections, and pattern, increments, projections, and contract end date.contract end date.

4. The “Burn Rate” Chart (2)4. The “Burn Rate” Chart (2) ““Am I burning funds too quickly or too Am I burning funds too quickly or too

slowly?”slowly?” ““When will I need a funding increment?”When will I need a funding increment?” ““Does the financial burn rate match the Does the financial burn rate match the

planned statement of work?” (“Do I need an planned statement of work?” (“Do I need an NFE?”)NFE?”)

““Am I still in the ‘ramp up’ phase, or have Am I still in the ‘ramp up’ phase, or have expenditures stabilized?”expenditures stabilized?”

5. Budget Carry Forwards and Other Issues

Know that your project accounts have different “years” from the unrestricted accounts and make sure spreadsheets recognize this difference.

5. Budget Control Best Practices Know project start and end dates and track

budgets at least monthly. Be sure all costs are allowable to the

project. Cost transfers require clear documentation. Labor certification is a MUST. Monitor costs closely in last 90 days.

5. Budget Carry Forward Restricted VS Unrestricted – accounts need

to be treated differently Agency Allowable guidelines (25% rule?) Understand exactly how your financial

system handles this transaction. Understand how financial reports reflect this

phenomenon.

6. How Do We Get from PSR to Burn Rate Charts?

Manual System Shadow System “Sunshine” System

6. Manual System

Spreadsheets are created from Project Status Reports or other information.

Work grow in proportion to the number of accounts tracked

Work has to be repeated each month Possibility for errors

““SHADOW” SystemSHADOW” System Many research departments maintain Many research departments maintain

separate recordsseparate records Very common where on-line access is limitedVery common where on-line access is limited Viewed as easier for control of labor and other Viewed as easier for control of labor and other

costscosts Involves DUPLICATE record-keeping andInvolves DUPLICATE record-keeping and Redundant data entry, but may be worth the Redundant data entry, but may be worth the

cost!cost!

Research Department

Research Department

Duplicate Input

InstitutionFinancialSystem

Shadow SystemShadow System

Standard ReportsSpecial Reports

Reconcile Reports

Making a Good Thing even Better!Making a Good Thing even Better! Goals of Departmental Financial Tracking Goals of Departmental Financial Tracking

SystemSystem– No redundant entry of dataNo redundant entry of data– Enrich central data with local knowledgeEnrich central data with local knowledge– Integration of Labor projection databaseIntegration of Labor projection database– Project status even a Ph.D. can understand!Project status even a Ph.D. can understand!– Rollups by “group”, division, and InstituteRollups by “group”, division, and Institute– Data accessible to anyone, anywhereData accessible to anyone, anywhere

6. Tools Necessary to Accomplish 6. Tools Necessary to Accomplish the Objectivethe Objective

– Access to Institutional dataAccess to Institutional data– Departmental data in a suitable formatDepartmental data in a suitable format– A tool to integrate data from multiple sources, A tool to integrate data from multiple sources,

probably a simple database such as ACCESSprobably a simple database such as ACCESS– A tool to export integrated data to spreadsheets A tool to export integrated data to spreadsheets

and graphs such as EXCELand graphs such as EXCEL– WEB technology for any-platform accessWEB technology for any-platform access

““Sunshine” System ModelSunshine” System Model Data is entered only once.Data is entered only once. No reconciliation among systems is requiredNo reconciliation among systems is required Local data makes central data more valuableLocal data makes central data more valuable Institute is free to design reports that are locally Institute is free to design reports that are locally

meaningfulmeaningful Opens opportunities for local customization and Opens opportunities for local customization and

integration to local technology infrastructureintegration to local technology infrastructure

Research Department

Research Department

UniversityFinancialSystem

LocalData

LocalData

TM

Standard Reports Web Reports E-MailGraphsSpecial Reports

“SunshineSystem”TM

Monthly Data Download

“Official Data”

Input Transactions

0

10

1stQtr

3rdQtr

0

10

1stQtr

3rdQtr

Advantages to PIAdvantages to PI Doesn’t need a central account/password Doesn’t need a central account/password

(local security protocol)(local security protocol) Doesn’t need to know central account Doesn’t need to know central account

numbersnumbers Can access project data from office, home, Can access project data from office, home,

hotel, virtually anywhere!hotel, virtually anywhere! Doesn’t have to use any “standard” Doesn’t have to use any “standard”

hardware or softwarehardware or software

7. Integrating Financial Data with 7. Integrating Financial Data with Operational DataOperational Data

Grant funds VS Unrestricted fundsGrant funds VS Unrestricted funds Space Occupied VS Indirect Cost RecoverySpace Occupied VS Indirect Cost Recovery Grant applications VS prior yearsGrant applications VS prior years ““Book-to-Bill” ReportBook-to-Bill” Report

GRANTS SUBMITTED/AWARDED BY FISCAL YEAR

49

12

89

25

87

17

69

17

102

22 23

10

20

40

60

80

100

120

FY98 FY99 FY00 FY01 FY02 FY03

47.1

0.9

45.8

0.1

0

20

40

60

Thru 12/31/2001 Thru 12/31/2002

Comparison of Direct grants to SKCC Funds

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000

Grant Volume

SKC

C F

unds

Space vs 2000 Actual IDC Recovery

$-

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

0 500 1000 1500 2000 2500 3000 3500

Square Feet

Act

ual I

ndire

ct R

ecov

ery

Sponsored Research Direct Base Cumulative

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

J an-

00

Feb-

00

Mar-

00

Apr-

00

May-

00

J un-

00

J ul-

00

Aug-

00

Sep-

00

Oct-

00

Nov-

00

Dec-

00

J an-

01

Feb-

01

Mar-

01

Apr-

01

May-

01

J un-

01

J ul-

01

Cumulative Grant Income

Cumulative Grant Expenditures

Book-to-Bill Report

Conclusions The surest way to be recognized as a savvy

Research Administrator is to exhibit strong financial management.

Today you can find an impressive set of resources to help you: computer tools, management techniques, helpful colleagues, training programs, and web sites.

Using these tools, you can create financial reports even a scientist can understand!

Financial Planning and Shadow Accounting

Arguing with an Auditor is LikeWrestling with a Pig in Mud...

After a while, you realize the pig ENJOYS it!

The Importance of Financial Planning at the Departmental Level Cannot be Overstated!

Question 1: Where are we now?Question 2: Where are we going?

Financial Planning

Question 1: Where are we now?

Critical need for accurate, detailed and current view of financial status (by project and department-wide)

• If institutional accounting records provide this – fine!

• If not, you need a departmental system (“shadow accounting”).

Financial Planning

Question 2: Where are we going?Projecting expenditure/revenue forecasts into the future (for fiscal year)

• Special attention to personnel– Plan to cover soft money people for year– Note institutional policy for “layoffs”

Name Funding Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunWashington, G. GRIP 24% 14th

Lincoln, A. DOE-F 15%GRIP 60% 14thMIP 10%STC/Teleimmersion 15%

Jefferson, T. DOE-F 12.5%I-FLOW 50%NANO 25%STC/Teleimmersion 12.5%DOE-F 50%STC/Teleimmersion 50%100%

Clinton, B. GRIP 100% 14th

Ford, G. DOE-F 20%STC/Teleimmersion 13%

Eisenhower, D. MIP 100%

Johnson, L. STC/Teleimmersion 100%

Truman, H. GRIP 100% 14th

Reagan, R. MIP 100%

Roosevelt, F. DOE-F 30%I-FLOW 20%NANO 10%MIP 10%STC/Teleimmersion 30%

Personnel Funding Chart

Name Funding Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunLarry DOE-F 20%

STC 8%MCNC 5%STC 28%MCNC 33%ITR-F 14%(NEW)DOE-F 14%ITR-Brown/Welch 5%ITR-F 38%(NEW)DOE-F 38%

Curley TRUST 20%STC 60%STC 35%MCNC 5%GRIP 20%ONR-Bishop 20%ITR-F 20%(NEW)DOE-F 5%ITR-N 35%KECK-OVHD 35%ONR Bishop 10%ITR-F 40%(NEW)DOE-F 30%

Moe TRUST 10%STC 72%MCNC 18%STC 32%DOE-M 100%ONR-Bishop 20%GRIP 23.5% (NEW)DOE-F 33%ITR-Brown/Welch 23.5%

Personnel Funding Chart

Question 2: Where are we going?Projecting expenditure/revenue forecasts into the future (for fiscal year)

• Special attention to personnel– Plan to cover soft money people for year– Note institutional policy for “layoffs”

• Special attention to fixed expenses– Equipment (or software) maintenance

contracts, rent

Financial Planning

Do You Need A Departmental System?

Remember, central systems are first designed to meet institutional needs

Department needs are secondary Central systems often don’t provide

everything that is needed to “run a department”, for example:• Store backup for purchase quotes (your auditors

will want to see these)• Store vacation and sick leave data• Give you the flexibility to produce the reports that

you need• ENCUMBER SALARIES THROUGH BUDGET PERIOD

Are Central Records Systems Adequate?

“Relying upon poor data from a central system to manage the financial affairs of your department is like relying upon the tide to steer your ship.”

It Just Doesn’t Make Sense!

Shadow Accounting Systems“A shadow accounting system is a set

of records maintained at a local level independent of the official records”• Have existed in some form probably

forever• PIs keeping account balances in lab

books• Personal computers fostered an

explosion of shadow systems

When To Implement A Shadow Accounting System? When central records

• Do not provide enough detailed information,

• The information is not readily available in a usable form,

• When there is too much lag time between incurring an obligation and it being posted to the central records, and

• If the benefits (dollars and time) out weigh the costs!

Additional Advantages Tracking Extra Data on Transactions

• Purpose of expense, e.g., graduate student education fund, faculty recruiting

• Category of expense, e.g., supplies for particular class

Maintaining sub accounts internally for a single central account• Departmental “earmarks” for gift or

institutional accounts• May be easier to keep in one account (less

institutional hassle and paperwork)

“Dos” Do be sure to enter transactions into your

system before they “leave your office” (paper or electronic)

Do be sure that your records are secure and stored in a safe form and location

Do perform a regular, thorough reconciliation to official records using a reconciliation worksheet

Do print and store reports in a form that are useful in audit situations

Do train more than one person on the proper use of the system.

“Don’ts” Don’t assume that magnetic files will

always be available for printing the report the auditor is going to request!

Don’t assume that just because you recorded the transaction correctly in YOUR system, that it got posted correctly in THEIR system!

Don’t assume that the person who uses the system today will ALWAYS be around tomorrow!

Goal

Financial Reconciliation Process

Step 1

Obtain central data (financial reports and transaction data) in a form that you can match with the shadow system (typically by account for a particular accounting period)


UNC Central Report

UNIVERSITY OF NORTH CAROLINA - CHAPEL HILL FINANCIAL RECORDS SYSTEM

FBM090 - C2 SUMMARY ACCOUNT STATEMENT FOR 08/31/00 DIST# REPORT DISTRIB = 3276 INTERACTIVE GRAPHICS FOR MOLECULAR STUDIES & MICROSCOPY

REPORT PAGE 2531 PROGRAM ID FBM0929 ACCOUNT PAGE 1

ACCT: ATTRI

5-31136 0-110-32761

TO:

CB 3175, SITTERSON

SPON:NAT CTR FOR RES RESR BUD PD:051500-051401 AWARD: $855,675.00 CON#:5-P41-RRO2170-17 CAN#: PRJ PD:050184-051401 FROE:OOOO FR:081201 PY:530846 SPON CODE:DHHS TR:081201 PRIME #:531136 OVHD-ON:H 4500 OFF: SUB -------- BUDGETS -------- -----------------

- ACTUALS ------------------ OPEN BALANCE

CODE DESCRIPTION ORIGINAL REVISED CURRENT MONTH FISCAL YEAR PROJECT YEAR COMMITMENTS AVAILABLE 1001 C/G PERSONNEL 395,190.00 255,069.96 255,069.96 1112 EPA NON-TEACH - 54,859.36 21,120.22 35,799.04 54,859.36 1113 EPA NON-TEACH - 9 365.19 2,369.00 4,034.78 9,365.19 1117 MO STU/OTHER NON 42:792.35 15,888.63 25,264.44 42,792.35 EPA NON-TEACH SA 107,016.90 39,377.85 65,098.26 107,016.90 1212 SPA ON CAMPUS 31,377.76 2,420.16 4,791.55 7,694.83 23,682.93 1251 SPA SEVER WAGES 15.38 4.84 9.58 15.38 SPA EMPLOYEE SAL 31,393.14 2,425.00 4,801.13 7,710.21 23,682.93 1411 NON-STUDENT WAGE 300.00 300.00 300.00 300.00 1451 STUDENT WAGE 1,410.00 468.75 915.00 1,410.00 TEMP EMPLOYEE WA 1,710.00 768.75 1,215.00 1,710.00 TOTAL PERSONNEL 395,190.00 395,190.00 42,571.60 71,114.39 116,437.11 23,682.93 255,069.96 1800 STAFF BENEFITS 60,086.00 41,545.31 41,545.31 1812 SOCIAL SECURITY 5,483.63 1,410.22 2,520.07 4,292.87 1,190.76 1813 SOC SECUR - HOSP 1,433.46 406.44 704.25 1,154.98 278.48 1822 STATE RETIREMENT 4,087.85 759.83 1,301.56 2,401.63 1,686.22 1831 MED INSURANCE OT 413.28 118.00 236.00 413.28 1832 MEDICAL INSURANC 738.68 128.25- 214.81 738.68 1833 HMO/HEALTH PLANS 2,596.30 281.97 582.74 898.37 1,697.93 1836 MEDICAL INS GRAD 469.02 207.99 469.02 469.02 1872 TIAA RETIREMENT 2,194.84 684.17 1,444.65 2,194.84 1873 TIAA-HEALTH PLAN 531.69 416.85 474.66 531.69 1876 ORP FIDELITY 359.10 359.10 359.10 359.10 1892 COMPOSITE BENEFI 232.84 85.13 142.21 232.84 STAFF BENEFITS 60,086.00 60,086.00 4,601.45 8,449.07 13,687.301, 4,853.39 41,545.31 1920 PROF CONSULTING 5,500.00 5,500.00 5,500.00 2000 SUPPLIES & MATER 9,500.00 7,384.00 7,384.00 2311 EDUCATIONAL SUPP 2,116.00 1,644.24 1,753.67 1,809.66 306.34 SUPPLIES / MATER 9,500.00 9,500.00 1,644.24 1,753.67 1,809.66 306.34 7,384.00 3100 TRAVEL 8,317.00 5.90- 5.90-

FR04B/PCB-08 Rev.,PCB-02:9

UNC Central ReportDATE RUN 09/08/00 UNIVERSITY OF NORTH CAROLINA - CHAPEL HILL REPORT PAGE 2539TIME RUN 11:09:05 FINANCIAL RECORDS SYSTEM PROGRAM ID FBM092FBM091 REPORT OF TRANSACTIONS FOR 08/31/00 ACCOUNT PAGE 5

DIST# REPORT DISTRIB = 3276INTERACTIVE GRAPHICS FOR MOLECULAR STUDIES & MICROSCOPY

FR04C/PCB-0890

ACCT: 5-31136 TO:

DEPT: 3276 CB 3175, SITTERSONSUB 2ND J.E. OFFSET BUDGET CURRENT BATCHCODE DESCRIPTION DATE TC~ REF. REF. ACCOUNT ENTRIES REV/EXP COMMITMENTS REF. DATE1876 J W Smith 08/31 042 M02 REG 179.55 APRM02 00083

J W Smith 08/31 042 M02 119 8.55 APRM02 00083J W Smith 08/31 042 JE2412 171.00 APRM02 00083

1876 CM TOTAL ORP FIDELITY 359.101892 PAYROLL RESERVE (16) 08/11 042 B03 REG 2.91 APRB03 00081

PAYROLL RESERVE (16) 08/25 042 B04 REG 3.47 APRB04 00082PAYROLL RESERVE (16) 08/31 042 M02 REG 78.75 APRM02 00083

1892 CM TOTAL COMPOSITE BENEFITS 85.131920 CNA 08/15 020 2000509 5,500.00 CGOL99 000811920 CM TOTAL PROF CONSULTING

FEES 5,500 00

2000 CNA 08/15 020 2000509 9,500.00 CGOL99 000812000 CM TOTAL SUPPLIES & MATERIALS2311 IEEE MAGAZINES 08/11 050 K399887 1,115.00 CGLLL 00081

IEEE INC 08/18 048 K399887 920261 1,115.OO 1,115.00- APC419 00081TAPE RESOURCES INC 08/10 050 K409250 519.30 CGLLL 00081TAPE RESOURCES INC 08/17 048 K409250 916738 519.30 519.30- APC415 00081DELL MARKETING LP 09/06 050 K434469 306.34 DP5003 00090D Davis 08/14 050 K435666 7.73 CGLLL 00081D Davis 08/22 048 K435666 921540 7.29 7.73- APC425 00082NEWARK ELECTRONICS 08/11 050 K435730 2.65 CGLLL 00081NEWARK ELECTRONICS 08/18 048 K435730 920163 2.65 2.65- APC419 00081

2311 CM TOTAL EDUCATIONAL SUPPLIES 1.644.24 306.34

3100 CNA 08/15 020 2000509 8,317.00 CGOL99 000813100 CM TOTAL TRAVEL 8,317.00

3121 R M Hall 08/24 048 T012732 923834 210.00 996.00- APC430 00082F P Albright 08/16 048 T012747 915818 349.79 349.79- APC413 00081C Wall 08/23 048 T012751 922967 206.00 206.00- APC428 00082C Wall 08/28 050 T012751 474.00- ENC912 00082

3121 CM TOTAL OUT/STATE TRANS-AIR 765.79 2.025.79-

3122 R M Hall 08/24 048 T012732 923835 63.85 APC430 00082F P Albright 08/16 T012747 915818 87.75 APC413 00081

3122 CM Total OUT/STATE TRAN-GROUN 151.603124 R M Hall 08/24 048 T012732 923835 570.55 APC430 00082

F P Albright 048 T012747 915818 692.65 APC413 00081C Wall 08/16 048 T012751 922967 232.77 APC428 00082

3124 CM TOTAL OUT/STATE SUB-LODGIN 10495.97


Step 2

Prepare shadow data (financial reports and transaction data) in the matching format as the central data.

Computer Science Department Report

Selection Criteria: Account Budget Report Report Run On: 10/10/00 11:00:47JAM Account=5-00000 Account 5-00000 PI Name Donald Duck Current Budget Period 5/15/00 5/14/01 NIH - GRIP – PRIME Budget Code Description Budget Encumbered Expensed Balance 1000 Personnel 395,190.00 30,192.39 116,437.11 248,560.50 1800 Faculty/Staff Benefits 60,086.00 4,621.33 13,687.30 41,777.37 1900 Con sultants/Temporaries 5,500.00 5,500.00 2000 Supplies & Materials 9,500.00 3,345.28 1,809.66 4,345.06 3100 Travel 8,317.00 4,542.90 5,317.90 (1,543.80) 3130 Foreign Travel 2,900.00 756.43 2,143.57 3200 Communication 500.00 16.28 45.92 437.80 3400 Printing/Binding 24.72 (24.72) 3800 Computer Services 49,858.00 9,399.48 6,356.34 34,102. 1 8 3900 Miscellaneous 600.00 463.25 136.75 4400 Maintenance Contracts 10,000.00 9,606.72 393.28 5000 Equipment 38,000.00 38,000.00 6500 Educational Grants 13,153.00 13,153.00 8900 Indirect Costs 243,764.00 178,559.62 65,204.38 0.00 8982 Restricted Funds 18,307.00 18,307.00 0.00

I Total for Account: 5-00000 855,675.00 258,591.00 210,103.01 386,980.

Selection Criteria:Object Code=231 1, Object Set=UNC, Account=5-31136 Account Breakdown Report Report Run On:10/11/00 2:16:50PM

Account

Budget Code 2000

5-31136 NIH - GRIP - PRIME

Supplies & Materials

5/12/00 6/30/00 VISA CARD CHARGES NONE JET VISA04 NONE 1,862.90 55.99

5/19/00 8131/00 GUTHOLD - IEEE REPRINTS K399887

NONE 1,115.00

5/31/00 8/31/00 TAPES/FUJI/SONY/PANASONIC TAPERESC HARRISC K409250 NONE 519.30

6/29/00 7131/00 INV# 1747678 NEWARK HARRIS( K422113 NONE 28.30

6/29/00 7/31/00 INV# 1775603 NEWARK HARRIS( K422137 NONE 29.30

6/29/00 7/31/00 INV# 1798294 NEWARK HARRIS( K422144 NONE 4.20

6/29/00 7/31/00 INV# 1753606 NEWARK HARRISC K422145 NONE 47.63

7/18/00 HDA APPLE K430340 NONE 286.20

7/20/00 INV# 387776 MARKERT HARRIS( K431865 NONE 246.917/26/00 8/31/00 INV# 410860217 DELL STONEM k434469 NONE 306.347/31/00 8131/00 REIMBURSE FOR FREEDM, K435666 NONE 0.44 7.29

REFRESHMENTS FOR NIH SITEVISIT

7/31/00 8/31/00 YELLOW LED'S/K411941NEWARK HARRIS( K435730 NONE 2.658/9/00 MINI-CIRCUITS INV# 792054 BRUMBA K440673 NONE 457.888/9/00 MINI-CIRCUITS INV# 796875 K440683 NONE 170.708/30/00 INV# P49056420103MICROWA K451954 NONE 149.00

9/22/00 VISA CARD CHARGES NONE NONE VISA03 NONE STINE 116.58

Total for Budget Code 2000 0.00 3,596.95 1,809.66

Balance Available for Budget Code 2000 (5,406.61)

3,596.95 1,809.66

Step 3Compare differences in expenditures/balances by object code between central and departmental financial reports

• This will alert you to particular areas of discrepancy

Summary of Discrepancies

Central Records Departmental Records Difference

Personnel 255,069.96 248,560.50 6,509.46

Supplies 7,384.00 4,345.06 3,038.94

Travel 2,137.67 593.87 1,543.80


Step 4

Best approach - compare all transactions for the period and “check off” those that match.

Compromise approach (use in situations where volume is enormous and accounting staff resources are limited) - compare all transactions for the period in the object codes where discrepancies were noted in the comparison of financial reports.


Every discrepancy must be researched

and explained!

IMPORTANT

What Are Likely Explanations For These Discrepancies?

Timing errors

Posting errors

Processing errors (the form is still sitting on your desk!)

Reconciliation Confirm the timing items by inquiry to

the central system. If you can’t find them, you will need to do more research.

Confirm posting errors to the central system and get them fixed.

Correct departmental processing errors. Keep a list of items that should be

corrected in the next accounting cycle.

Reconciliation Unmatched central items “got past

you” and need to be recorded in the shadow system, or explained out in a reconciliation worksheet.

Cost SharingAnd Effort Reporting

Departmental and Central Office Shared Responsibilities

Issues

• Cost share defined

• Allowable and unallowable cost share

• Identification of sources

• Identification of responsible persons

• Regulations

• Audits and repercussions

Cost sharing or matching is that portion of the project or program costs not borne by the sponsor

Definition

Types of Cost Sharing

• Mandatory, required, condition of award

• Voluntary Committed, offered, excess of mandatory, not a condition to be considered for the award

• Voluntary Uncommitted, effort or expenditures that are in excess of committed and budgeted

Special Notice!

Commitments in proposals become requirements upon award.

Cash vs. In-kind

• Cost share from University sources are considered cash

• Value of non-cash contributions provided by a third party are considered in-kind

Budget Example

Expense Categories Insitution Agency

PI Salary ($90K) 20,000Colleague Time 0Consultant 5000Graduate Students (5) 75,000Supplies 30,000Travel 5,000Printing 2,000F & A 66,000

Total Budget 5,000 198,000

Submitted to AgencyBudget

Budget Example

Expense Categories Insitution Agency Insitution Agency

PI Salary ($90K) 20,000 22,500 20,000Colleague Time 0 2,000 0Consultant 5000 5,000Graduate Students (5) 75,000 7,000 75,000Supplies 30,000 2,000 30,000Travel 5,000 5,000Printing 2,000 300 2,000F & A 66,000 19,400 66,000

Total Budget 5,000 198,000 58,200 198,000

Submitted to Agency Real BudgetBudget

Examples of Cost Sharing

• Employee time, including fringe benefits

• Equipment

• Volunteer time or other contributed items

• Unrecovered F&A, if approved by sponsor

• Subrecipient cost-sharing

• Directly related supplies and services

Sources of Cost Sharing

• University funds

• Unrecovered Facilities and Administrative (F & A) costs

• Third party contributions

• Other sponsored projects

Responsible Persons

• Shared responsibilities

– Principal investigator

– Department administrator (liaison)

– Central office

When to Include Cost Sharing

• Mandated by sponsor

• Contribution is necessary to ensure success of competitive proposal

The amount included as cost sharing should be a reasonable level, considering burden placed on Institution resources.

Finding Cost Share

Some acceptable items include:

– Salaries and fringes

– Lab supplies

– Travel

– Unrecovered F&A

Unallowable Cost Share

• Items normally treated as indirect

• Specifically unallowable costs

• Cost share used on other projects

Effect on F & A

• The amount of cost share contributed by an institution has an inverse effect on its facilities and administrative cost reimbursement rate

• How?

Cost Share / F&A Relationship

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9

Cost Share in hundred thousands

Rate

Cost Share/F&A Relationship

Cost Share in 100’s of thousands

Rat

e

Cost Share or F&A

Items generally considered indirect cannot be cost share. These include:– Department Administration – Space– Utilities– Equipment, usually– Library resources

Timing

• Cost share must be expenditures incurred or services rendered during the period of award

• Some agencies expect / require expenditures to occur at same pace as federal dollars

Where to Find the Regulations

• OMB A-110, Subpart c.23

• NSF Grants Policy Manual, Section 330 and General Conditions, Section 21

• Office of Education (EDGAR), Section 74.23

• Other agency guidelines, including RFPs

Cost Sharing Criteria

• Verifiable from Official University Records

• Not cost sharing for other sponsored programs

• Necessary and reasonable for accomplishing project

• Allowable cost, as defined in OMB A-21• Incurred during effective award dates

Repercussions of Unmet Cost Share

• Identify amount and proportion unmet

• Identify programmatic effect

• Notify agency immediately

• Agency may require repayment of a proportionate share of grant funds

Note: Unsatisfactory documentation may be treated as unmet cost share

Audits of Cost Share

• OMB A-133 audits

• Program audits

• Project financial audits

• Agency Inspector general audits

Common Audit Findings• Failure by institutions to identify cost sharing

in their accounting systems• A lack of written policies and procedures• No method exists for valuing contributed

effort as cost sharing• Incorrect valuation of in-kind cost sharing• No annual certification when cost sharing

exceeds $500K• Unallowable costs claimed as cost sharing

Sharon Kiser:

Source: Federal Grants News 3/02 – quotes from NSF Inspector General

Sharon Kiser:

Source: Federal Grants News 3/02 – quotes from NSF Inspector General

Documentation

• Mandatory Cost Share must be documented

• Must be readily identifiable in the official records of the Institution

• Method of documentation is determined by type of award and type of cost share

• Inadequate documentation may result in disallowance

In Summary

• Cost share when mandatory

• Be conservative in valuing for budget

• Track and document timely

• Provide information to Sponsored Programs for Official Records

Time and Effort Reporting

What is Effort Reporting?

• Process prescribed by federal government to verify that salaries charged to federally sponsored projects represent work performed

• Verification that cost sharing was performed as budgeted in proposal

What Governs Effort Reporting?

OMB A-21 , Section J.8, Compensation for personal services

Compensation covers all amounts paid during the period of performance under sponsored agreements– Based on documented payrolls– Reliance is placed on tolerable degree of estimates– No single best method for documenting

Understanding 100%

What is 100%?

40 Hours per week?

24 / 7 ?

Other?

Certification

• Details of certification– Reflect distribution of Activity (Effort)– May be After the Fact– Reasonably reflect compensation by Activity– Reflect Activity for EACH SPONSORED

AGREEMENT – Timing – for professionals, no less than every six

months– Time cards qualify as documentation

Who certifies?

Effort must be confirmed by responsible

persons with suitable means of verification

that the work was performed. Confirmation

by the employee is not required.

Documents

SRA Departmental Administrators Certification Course (DA-201)