The Office of Research Services The Office of Research Support Services 1 Revised October 8, 2008 Module 1 Introduction to Sponsored Projects Administration

The Office of Research Services The Office of Research Support Services

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Revised October 8, 2008

Module 1Introduction to Sponsored

Projects Administration

Sponsored Programs at Penn


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Welcome to Sponsored Programs at Penn

• Modules

– Module 1 – Introduction to Sponsored Projects Administration at Penn

– Module 2 – Proposal Preparation and Submission & Budgeting

– Module 3 – Award Setup and AIS Information– Module 4 – Project Management and

Reporting Tools– Module 5 – Closeouts and Audits


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Handouts

• Sponsored Projects Manual and Policies

• Module Handouts and Reference Materials

• Penn Research Admin. File (to be completed during SPP)


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Anticipated Benefits of Program

• Introduction of resources and tools available to Research Administrators at Penn

• Overview of general terms• Overview of federal and sponsor rules and

regulations related to sponsored projects • Clarification of responsibilities• Building strong, informed Penn Research

Administrators


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What is a Sponsored Project?

• Any project, which meets any of the following criteria, is considered to be a "sponsored project" and will be administered accordingly:

– The project commits the University to a specific line of scholarly or scientific inquiry, typically documented by a statement of work;

– A specific commitment is made regarding the level of personnel effort, deliverables, or milestones;

– Project activities are budgeted, and the award includes conditions for specific formal fiscal reports, and/or invoicing;

– The project requires that unexpended funds be returned to the sponsor at the end of the project period;

– The agreement provides for the disposition of either tangible property (e.g., equipment, records, technical reports, theses or dissertations) or intangible property (e.g., inventions, copyrights or rights in data) which may result from the project;

– The sponsor identifies a period of performance as a term and condition.

2101 Administration of Sponsored Projects


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Grant

• Purpose:

– To transfer…• Money• Property• Services• Or anything of value

…to recipient in order to accomplish a public purpose.

• Involvement:– No substantial involvement is anticipated between

government and recipient during the performance of activity.


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Contract

• Purpose:To acquire property or services for direct benefit or use of the federal government.

• Involvement:Varying amounts anticipated between government and recipient during performance of activity.


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Cooperative Agreement

• Purpose:To transfer funds to recipient to accomplish a public purpose.

• Involvement:Substantial amounts anticipated between government and recipient during performance of activity.


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RFProposal • Government generates scope of work via

Notices/Program Announcements.

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

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

RFQuotationRFApplication


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Grant vs. Contract Grant Contract

Project conceived by:

Investigator Agency

Agency function:

Supports or assists

Procures service

Control: Performer defines details and retains scientific freedom

Agency exercises direction or control

Agency oversight:

Maintains cognizance

Closely monitors


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Cooperative AgreementGrant Contract

In Between


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GRANT COOPERATIVE AGREEMENT

CONTRACT

Basic Purpose Provides assistance with few restrictions

Provides assistance with subsantial involvement between parties

Procure Tangible goods and services

Solicitation Method Application kit or guidelines

Request for Application (RFA)

Request for Proposal or Quote

Award Instrument Short, may refer to general conditions

Describes involvement, party relationships

Long, detailed specs, clauses, regulations, and expected results

Involvement by Sponsor

Generally None Substantial Involvement May be extensive

Rebudgeting Flexible Usually flexible More restrictive

Equipment Title Grantee Varies Varies

Peformance Period Specified in Grant Specified in Coop. Agreement

Specified in Contract

Patent Rights Generally liberal May be involved Provision in contract

Publications May ask to be informed May ask to be informed Maybe prior review/approval

Technical Annual summary report Frequent reports Detailed, maybe monthly


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Where to FindLaws & Rules of Grants

Administration

• Read the Notice of Award– Know terms and conditions

• Awards under the Federal Demonstration Partnership (FDP)

• Awards under Federal Expanded Authorities but not FDP

• Non federal awards• Federal contracts (Federal Acquisition Regulations)


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General Resources• Sponsored Programs Handbook

– http://www.upenn.edu/researchservices/Manual.html

• Research Services Website – http://www.upenn.edu/researchservices/

• ORSS –School of Medicine– http://www.med.upenn.edu/orss/

• Financial Policies– http://www.finance.upenn.edu/vpfinance/fpm/

• Sponsor’s Websites– http://www.upenn.edu/researchservices/sponsor%20links.h

tml


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• Office of Management and Budget (OMB)

– Works cooperatively with grant making agencies and leads the development of government-wide policy to assure that grants are managed properly and that Federal dollars are spent in accordance with applicable laws and regulations. OMB does not award grants.

Federal Awards


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Office Of Management & Budget (OMB) Circulars

• A-21 Cost Principles for Educational Institutions

– Direct costs, F&A, unallowable costs, service centers, etc.

• A-110 Administrative Requirements for Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations– Reporting and closeout requirements, program income, etc.

• A-133 Audit Requirements for States, Local Governments and Non-Profit Institutions

– Auditee requirements and responsibilities

All found at www.whitehouse.gov/omb/grants/


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OMB Circular A-21

• General objectives of A-21

– Government-wide policies on cost reimbursement• Standards for cost allowability• Standards for cost allocation

– Also applies to costs used for cost sharing


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OMB Circular A-21 General Standards for Cost

Allowability

• Costs must be reasonable• Costs must be allocable • Costs must be treated consistently

See SPP #2110 Direct Cost Expenditures


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OMB Circular A-21 Reasonable and Necessary

• Prudent person rule for reasonableness

• Is cost necessary for overall operation of the institution or the performance of the sponsored project?

• Are costs incurred consistent with University policies and procedures?


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OMB Circular A-21 Allocable

• Cost is incurred for the benefit of only one project or can be readily assigned to multiple projects which directly benefit from the cost

– Relative benefits received– Approximated through use of reasonable

methods


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OMB Circular A-21 Consistently Treated

• Requires costs incurred for the same purpose, in like circumstances, to be handled the same way.

• As Direct or F&A Costs– According to University Policies


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OMB Circular A-21 Direct vs. F&A Costs

• Direct Costs– Specifically identifiable with a specific sponsored

project, an instructional activity or any other institutional activity

• Facilities and Administrative Costs (formerly referred to as Indirect Costs or Overhead)

– Expenses that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity


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Direct Costs at Penn• Generally should be charged as proposed

• Department is responsible for maintaining documentation for necessity and appropriateness of direct charges and cost transfers

• PI is responsible for reviewing and approving all expenditures

• Authority provided under expanded authorities permits rebudgeting of allowable costs (subject to agency’s terms and conditions)


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F&A CostsThe following should generally be treated as F&A costs except for non-federal awards*

– Secretarial and clerical support costs– Administrative assistants– Shop personnel– General supplies and materials

Federal exceptions (A-21, Exhibit C)– Complex programs– Significant data collection– Unlike circumstances

See SPP #2138 Direct Cost Expenditures for Non-Government Organizations


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F&A Rates• F&A costs are claimed based on rates

• Rates are developed by Penn in a periodic F&A Cost Rates Proposal– Currently on three year cycle

• Proposal is submitted to our cognizant agency, Dept. of Health and Human Services (DHHS), for review, negotiation, and approval


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F&A Rates• F&A Rates are applied to the “Base” of the

approved award– For federal awards, this base is generally

Modified Total Direct Costs (MTDC)

• MTDC excludes select direct costs such as:– Equipment– Tuition remission– Each subcontract, whose expenses exceed

$25,000 • On a per subcontract basis


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Determination & Application of F&A Rates

Modified Total Direct Cost Base (MTDC)

TDC less: Equipment 18XX

Tuition (4180-4190)

Subcontracts > $25K 5333

Patient Care 5334

Rental Costs 525X


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Salaries of

Technical Staff

Office Supplies

Postage (stamps)

Long Distance

Charges

Entertainment

Computer

Bad Debts

Local Phone

Charges

Laboratory Supplies

Routine Maintenance

of Plant/Equipment

Federal Express

Charges

Animal & Care Costs

Salaries of Clerical or

Administrative Staff*

Service/RechargeCenters

Library Support

Direct or Indirect?

End Game


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Direct


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Indirect


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Indirect(with exceptions)


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Neither!These costs unallowable!


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Neither!These costs unallowable!


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Consistent Treatment of CostsDirect Cost Indirect (F&A) Cost

Salaries of Technical Staff

Salaries of Clerical or Administrative Staff

Laboratory Supplies Office SuppliesTravel Local Phone Chgs

Equipment Postage (stamps)

Animal & Care Costs Library Support

Applicable Employee Benefits

Routine Maintenance of Plant/Equipment

Service/Recharge Ctrs Insurance


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Consistent Treatment of CostsUnallowable

Entertainment & Alcoholic BeveragesBad DebtsFines and PenaltiesHonoraria (lecture fee allowed)Lobbying or Fundraising CostsContingency Costs


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501 Consistency in estimating, accumulating and reporting costs.

502 Consistency in allocating costs incurred for the same purpose.

505 Accounting for unallowable costs.

506 Cost accounting period.

Cost Accounting Standards for Educational Institutions


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Documenting Allowability of Project Charges

• Explain necessity of expenditure to successful completion of the project

• Justifications must address project purposes

• Justifications must be systematically maintained in file


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OMB Circular A-110

• Uniform administrative requirements for grants and other agreements with

– Institutions of Higher Education– Hospitals– Other Nonprofit Organizations


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• A-110 Provides general guidelines for the administration of grants to federal agencies

• Agencies have their own implementations of A-110 which communicate their specific requirements– Contained in the Code of Federal Regulations

www.access.gpo.gov/nara/cfr/cfr-table-search.html

– or on ORS’ home page www.upenn.edu/researchservices/links.html

OMB Circular A-110 (cont.)


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Subpart B: Pre-Award Requirements

Most appropriate

award instrument?

Grant


Contract


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Subpart C: Post-Award Requirements

• Revision of Budget & Program

• Pre-Award Costs• Extensions• Carryover• Property &

Procurement Standards

• Cost Sharing• Program Income• Progress Reporting • Financial

Reporting• Record Retention

It is within Subpart C that the OMB allows for many of the privileges that are associated with grants under the Federal Demonstration Partnership (FDP).


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Revision of Budget & ProgramChange in Effort of Key Personnel

• Key Personnel = Principal Investigator – As well as other individuals responsible for the design,

conduct and reporting of project results

• Absence of PI (for NIH: or key personnel as named in the Notice of Grant Award) for more than 3 months requires sponsor approval

• Agencies retain approval authority for significant reductions (>25%) in PI effort

– (NIH: includes named key personnel)


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Federal Demonstration Partnership

• Applies to federal grants ONLY• Provides more liberal interpretation of OMB Circular A-110

– includes expanded authority to approve certain actions previously reserved to awarding agency

• Departments must continue to maintain programmatic documentation justifying any changes

• Specific agency rules vary - review the FDP documentation for details– Available on the FDP internet homepage

http://www.thefdp.org


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Federal Demonstration Partnership (cont.)

• Sponsor written approval required prior to significant project changes– For example

• Changes in scope– Reductions in PI effort (>25%)

• Programmatic objectives• Increase in total costs• Transfer of research to another entity unless

approved in application

• Waives many, but not all, required re-budgeting approvals


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• With proper justification and documentation, allowable costs for travel, equipment, supplies, consultants, etc., may be reallocated without sponsor permission– Must meet all requirements of OMB Circular A-21

• Allows pre-award costs 90 calendar days before the start of the award

Federal DemonstrationPartnership (cont.)


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Federal DemonstrationPartnership (cont.)

• Unobligated balances– Can be carried over to the next funding period– Can be used to defray costs of any funding period of

the project in addition to the current year's funding

• Allows one no-cost-extension for up to 12 months– ORS must notify sponsor, in writing, prior to end

date


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No Cost Extensions• For FDP or federal awards under Expanded

Authorities (also “Waiver of Authorities”)– University has authority to grant (but must notify agency)– Generally should be requested from ORS at least 30 days

prior to the current end date of the award

• For Non FDP/Expanded Authorities awards, or for non federal awards– A letter to the sponsor requesting extension must include

adequate justification– Must be forwarded to ORS to be countersigned prior to

forwarding to sponsor

Note: Having unspent funds is not adequate justification for an extension


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OMB Circular A-110Cost Sharing

• All contributions, including cash & third party in-kind, shall be accepted as part of recipient's cost sharing or matching when such contributions meet all the following criteria – Are verifiable from the recipient's records– Are not included as contributions for any other

federally-assisted project or program – Are necessary and reasonable for proper and efficient

accomplishment of project or program objectives

SPP #2119 Cost Sharing/Matching RequirementsSPP #2120 Accounting for Matching Gifts


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OMB Circular A-110Cost Sharing (cont.)

– Are allowable under the applicable cost principles– Are not paid by the Federal Government under

another award, except where authorized by Federal statute to be used for cost sharing or matching

– Are provided for in the approved budget when required by the Federal awarding agency

– Conform to other provisions of Circular A-110, as applicable

– Foregone F&A reimbursements are not allowable as cost sharing unless specifically approved by the agency, except for awards under the Federal Demonstration Partnership terms and conditions


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OMB Circular A-110Program Income

• Program income earned during the project period – Shall be retained and be used in one or more of the ways listed in

the following as defined by the agency (see specific agency’s guidelines)

• Additive - Added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives (applicable to awards under FDP T&C)

• Cost Share - Used to finance the non-Federal share of the project or program

• Deductive - Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based

SPP #2121 Accounting for Program Income


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Subpart D:After-the-Award Requirements

• Submit Reports• Liquidate

obligations


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Accounting Procedures of Non-Federal Sponsors

• Different guidelines for Non-Federal Sponsors alters Penn’s Policies

• Dependent Care Tuition• Object Code 5295: Cost of Space allocated to

schools as part of “allocated costs”• Object Code 5296: Cost of University Services• Object Code 5297: Cost of Space Used by the

Project (and not captured as part of 5295)• Object Code 5299: School and Departmental

Administrative Costs


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Accounting Procedures of Non-Federal Sponsors

• Not Subject to F&A• Object Code 5295: Cost of Space allocated to

schools as part of “allocated costs”• Object Code 5296: Cost of University Services• Object Code 5297: Cost of Space Used by the

Project (and not captured as part of 5295)

• Subject to F&A• Dependent Care Tuition• Object Code 5299: School and Departmental

Administrative Costs


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Questions???

Documents

The Office of Research Services The Office of Research Support Services 1 Revised October 8, 2008 Module 1 Introduction to Sponsored Projects Administration