HMS ASPIRE Case Studies in Grants Administration

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HMS ASPIRECase Studies in Grants Administration

• Presented by
• Sarah Axelrod
• Peter Harrington
• Elizabeth Mora
• Jill Mortali
• Beverly Simmonds
• Min Xiao

November 10, 2005 TMEC 227
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Agenda

• Issues with non-federal awards
• Effort Reporting
• Whistleblower Issues
• Travel Issues
• Cost Allocation
• Cost Transfers
• Conflict of Interest
• Program Income

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ISSUES WITH NON-FEDERAL AWARDS
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My other grant is an R01

• Professor Quiggley in Pharmacology has been
  funded by a large (1 million/year) award from
  the Finding the Cure Foundation (FTCF). FTCF
  raises funds through private donations and an
  annual celebrity telethon.

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Nonfederal Award

• The award notice includes terms and conditions as
  follows
• Funds are to be expended substantially in
  accordance with the budget. However, the sponsor
  recognizes the need for the PI to make changes
  without the prior approval of the FTCF so long as
  all expenditures are reasonable and related to
  the project goals.
• The grantee will supply FTCF with an annual
  report that describes research progress and
  expenditure of funds.
• Indirect costs are not budgeted on this award.

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Nonfederal Award

• You are the grant manager in Pharmacology. Given
  the rather vague terms of the agreement, how
  would you handle the following scenarios

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Nonfederal Awards

• Given the lack of general administrative support
  on the award via indirect costs, how can you
  assure adequate resources for managing the award?
• Dr. Quiggley needs to purchase some general
  office items and journals. Is it permissable to
  charge them to this award?

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Nonfederal Awards

• What about telecommunication charges?
• Several of the co-investigators paid on the
  project will be traveling to a scientific meeting
  and wish to fly first class and stay at the Ritz
  Carleton. Is this okay?
• Is it okay to charge a Boston Harbor cruise?
• The award includes no clause regarding audits.
  Can this grant be audited?

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Nonfederal Awards

• What is the reasonable and prudent person test?
• What is the Boston Globe test?

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EFFORT
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Over the Top with Effort

• As Grants Manager in a large Quad department, you
  are responsible for monitoring awards for five
  faculty. You have many discussions with them
  concerning effort commitments and effort
  reporting. However, you recently became
  concerned that the message is not getting through

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Effort

• Dr. Verna Von Chadsworth is an Assistant
  Professor. She teaches one course and serves on
  a faculty committee. She has one R01 that
  started last year and listed her effort at 65.
  She has applied for another R01 that will be
  funded starting next month with the 35 effort.
  She is also finalizing an industry funded study
  where she will direct the project but only charge
  salary for a post doc.
• Is she overcommitted?
• If yes, how should it be managed?

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Effort

• Dr. Swan is a full professor and Chair of the
  Department. He is PI on three R01s and a
  co-investigator on two other awards. He will
  participate next month in the preparation of two
  large center grant applications. His other
  support appears as follows

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Effort

• You have some concerns about his level of
  committed effort. He claims that NIH considers
  the work week to be 40 hours and certain
  activities are performed by him on the weekends
• How do you handle this discussion?

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Effort Reporting

• You have worked through many of your troubling
  effort issues and it is now time to review the
  annual faculty effort certification.
• The faculty are too busy to be involved. Is it
  okay if you sign on their behalf? What is first
  hand knowledge?
• You notice that Dr. Swans effort adjustments are
  not reflected on the report. What should you do?

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TRAVEL ISSUES
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Unfriendly Blue Sky

• Your department has been selected as part of the
  Universitys annual A-133 Audit. The auditors
  tested a travel expense charged to Dr.
  Misfortunes NIH grant. They found that a first
  class airfare ticket was charged to this grant.
  The airfare was booked through the
  Travelocity.Com by Dr. Misfortune and there was
  no proof that the lowest airfare was purchased.
• Dr. Misfortune explained that the airfare cost
  itself was a coach ticket he was able to upgrade
  the ticket to first class by using his personal
  frequent flyer mileage. This created no
  additional expense to the grant. The problem is
  though that he didnt keep any documentation to
  support his claim.
• Do we have issues here ? What do you do ?

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Workaholic Alcoholic ?

• Furthermore, the auditors found the travel
  expense charged to the NIH grant also included a
  hotel bill with several bar charges. During the
  interview meeting with the PI, the auditors asked
  the PI if there were alcoholic beverages
  included.
• Dr. Misfortunes reply is that he was not aware
  that alcoholic beverages were unallowable on
  federal awards. Nevertheless, he didnt think the
  bar charges were for alcohol because he had to
  work many hours during his travel and he did not
  consume alcoholic beverages while he was working.
  
• What questions or red flags might be raised by
  auditors ?

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COST ALLOCATION PARKING OF CHARGES
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Cost Allocation

• Professor Smiths Research Portfolio
• 4 Federal Awards (Fed Projects A, B, C, and D)
  totaling 1.5M
• 1 Non-Federal Award (Non Fed Project 1) totaling
  400K
• Majority of direct costs for 4 Federal Awards
  fall into two major cost categories
• Personnel
• Lab Supplies
• One of the Federal Awards (Fed Project A) will
  end in one month, with subsequent funding
  expected to arrive in 4 months.

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Cost Allocation, cont.

• Currently
• Fed Project A supports a 1.0 FTE Lab Assistant.
  The PI instructs you to move expenses for this
  person to Fed Project B until the subsequent
  funding arrives.
• Lab Supplies for all 5 projects are being charged
  in equal parts (20) to each of the 5 awards.

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Cost Allocation, cont.

• Questions Personnel Costs
• Can the PI move the personnel costs for the 1.0
  FTE Lab Asst. from Fed Project A to Fed Project B
  to bridge the four month funding gap? Why or why
  not?
• Would it be OK to move the personnel costs to Non
  Fed Project 1 instead?
• What other options might be considered?

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Cost Allocation, cont.

• Questions Lab Supply Expenses
• Is the current allocation methodology for
  distribution of lab supply expenses acceptable?
  Why or why not?
• What other allocation methodologies might be
  implemented?
• What happens to this methodology when Fed Project
  A ends?
• What is the most important thing to do in
  creating an allocation scheme?

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COST TRANSFERS
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45 Days or 90 Days Dilemma

• Six months into the award period, the Delaying
  Hospital finally issued a sub-agreement
  amendment. Upon receiving the Action Memo, Joy
  prepared a cost transfer journal to transfer
  costs incurred during the first six months of the
  budget period. She transferred the expenses from
  a departmental holding account to the
  sub-agreement account. The transactions were over
  90 days but the cost transfer journal is prepared
  within 45 days of the Action Memo issue date. So
  Joy processed the journal without submitting a
  Cost Transfer Justification Form. Two months
  later, Joy learns that a CT form is required for
  this journal, but the 45 days of the Action Memo
  issue date has expired.
• Can Joy still submit a Cost Transfer
  Justification Form ?

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Invalid Cost Transfer?

• After a monthly closing, you run the Invalid Code
  Combination Report from CREW, and notice that
  there are several invalid code combinations from
  the prior month. Some of these invalid codes have
  been expensed to your federal funds. You prepare
  a cost transfer journal to correct those
  transactions which involve the activity segment
  values.
• Can you process the cost transfer journal without
  a Cost Transfer Justification Form ?
• What should you do if an invalid code combination
  was a miscoded cost transfer journal you did last
  month ?

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PROGRAM INCOME
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Program Income

• University of Minnesota, 1992
• Faculty member, Department of Surgery
• NIH funding
• Developed an organ donor transplant
  anti-rejection drug called ALG
• No FDA approval
• No NIH notification of program income from sales
  of ALG

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Program Income, cont

• Sales of ALG, domestically and internationally,
  exceeded 80M
• Dept of Surgery used program income (not on
  Universitys books) to build a new building
• A few people noticed the new building since Univ
  of Minn is a state school and this building was
  not in the state budget
• FBI, FDA, OIG paid a visit for a long time
• Computers and files were impounded

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Program Income, cont

• 18 felony counts were handed out to faculty and
  administrators
• Faculty got off (drug saved lives)
  administrators served jail time

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Program Income, Cont.

• Questions
• What is program income?
• How common is program income?
• How important is program income?
• How should program income be handled?

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Thank You!

• Thanks for coming
• The next ASPIRE class will be
• Emerging Issues in Research Compliance
• Presented by Peter Harrington, ORC Ellen
  Berknman, OGC Sarah Axelrod, FOA and Carolyn
  Connelly, ORSP
• Monday 11/21/05
• 10am-1130am
• TMEC 250

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WHISTLEBLOWER ISSUES
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WHISTLEBLOWERS

• You are the Grant Manager who helps manage the
  awards of Dr. X.
• You are approach by Postdoc A, who works in Dr.
  Xs lab, who tells you He is aware that 1/3 of
  the salary of Postdoc B is being charged to one
  of Dr. Xs grants but he knows for a fact that
  Postdoc B is not actively doing any work on that
  project.
• Postdoc A also tells you that, in one animal
  protocol, the mice being used are not receiving
  the pain mediation or anesthesia they are
  supposed to be receiving.
• You are aware that Postdoc A received a poor
  performance evaluation from Dr. X recently, and
  that Postdoc B recently broke off an amorous
  relationship with Postdoc A.
• You have your own lingering/unresolved questions
  about Dr. Xs effort allocations. For example,
  you know he charges 50 of his time to a certain
  grant, but he appears to spend very little time
  on it.

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WHISTLEBLOWERS

• What Do You Do?
• What do you say to Postdoc A?
• Should you investigate or look into the facts
  yourself?
• Should you discuss the matter with a supervisor
  or other University official? Who?
• What if you report the matter to a supervisor or
  university official and nothing happens or you
  dont hear anything else about it?
• What are your duties? What are the risks of doing
  something or nothing?

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WHISTLEBLOWERS

• People You Can Talk To
• Department Administrator or Financial
  Administrator
• Department Chair
• Ombuds Office
• ORC, SPA, OSP, OGC
• Senior Officials

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WHISTLEBLOWERS

• Whistleblower Protections
• University core values of integrity, respect,
  excellence and accountability
• University non-retaliation policies and practices
• - HU Non-Discrimination Policy (non-retaliation
  provision)
• - General HU Non-Retaliation Policy (proposed
  under consideration)
• - De-facto Protection of Whistleblowers HU
  Practice
• - Employee Indemnification Policy
• Federal and State Whistleblowers Protection Laws
  (e.g. MA Stem Cell Law Federal Sarbanes-Oxley
  Law)

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CONFLICT OF INTEREST
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CONFLICTS OF INTEREST

• Scenario
• PI consults for Company A on her own time.
• PI performs assays on company owned compound in
  Harvard lab, in collaboration with visiting
  company scientist, but not under any sponsored
  research agreement.
• What are the concerns here?

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CONFLICT OF INTEREST

• Concerns
• Private Use Issues (federal tax law, Harvard
  policy)
• Misuse of Federally Funded Equipment
• IP Ownership Conflicts (CDAs, Harvard IP Policy)
• Access, Safety Liability Issues
• Diversion of Research Opportunities
• Liability for disclosure of Confidential
  Information (Harvards, Companys or Third
  Partys)
• Possible academic/publication issues if students
  are used