Jud Hurd

1
Restricted/Sponsored Program Activity

• Higher Education Session 5

2
Sponsored Programs

• Or,
• Oh my gosh, what have we gotten ourselves into?

3
Credits

• Adapted from
• The Other Side of the House What the Pre-award
  Folks Do
• Presented by Richard N. Keogh and Gunta J.
  Liders
• NCURA FRA IV, New Orleans, February 16 - 18,
  2003

4
Outline

• Legal Framework
• Who Are The Players and How Are Organizations
  Structured To Support Research?
• The Grant/Contract Life Cycle
• Typical Pre-award Services
• Pre/Post-Award Intersection Points (Integration
  or Conflict?)

5
Assistance vs. Procurement

• Assistance generally, what the proposer wants
  to do
• Awards are either grants or cooperative
  agreements
• Procurement generally, what the government
  wants to buy (can include research)
• Awards are contracts

6
Basic Award Types

• Grant
• Awarded to an organization for the conduct of
  research or other programs
• Used whenever the sponsor anticipates no
  substantial programmatic involvement with the
  grantee
• Contract
• Used to procure a product or service
  (deliverable) with specific obligations for both
  the sponsor and the recipient

7
Basic Award Types

• Cooperative Agreement
• Similar to grant, but sponsor staff usually are
  actively involved in proposal preparation, and
  anticipate having substantial involvement in
  project activities once the award has been made

8
Basic Award Types

• Gift
• Given with few or no conditions specified serve
  only to direct the funds to a programmatic area
• May be provided to establish an endowment or to
  fund existing programs
• Frequently used to support developing programs
  for which other funding is no available
• Usually transmitted via an institutions
  development office
• Intended to be a charitable, irrevocable donation
  
• No rights to reclaim unused portions
• No expectation of direct economic benefits (may
  include indirect benefits such as tax deduction
  or goodwill)

9
Rules and Regulations

• Federal
• OMB Circulars Instructions or information issued
  by OMB to Federal agencies
• Does not affect grantees directly
• Expected to have a continuing effect of two years
  or more
• Common Rules
• Addresses both federal agencies and grantees
• Imposes same rules on both
• Federal Acquisition Regulations (FAR)
• Regulations that are the primary authority for
  government procurement
• Published via Code of Federal Regulations
• Provisions implemented and augmented by agency
  supplements (e.g. DFARS)

10
Rules and Regulations

• State
• Public Institutions affected by State Rules
• Example State Purchasing Guidelines Related to
  Master Price Agreements, Bidding Requirements,
  Minority Business Preferences
• Institutional
• Regulations and policies generally conform to
  Federal Guidelines, but usually are more specific
  and may be more restrictive than associated
  Federal Rules

11
Important OMB Circulars

• A-21 Cost Principles
• Establishes the principles for determining the
  costs applicable to awards made to educational
  institutions
• A-110 Administrative Requirements
• Sets forth standards for consistency and
  uniformity among federal agencies

12
Important OMB Circulars

• A-133 Audits of State, Local Governments, and
  Non-Profit Organizations
• Sets forth standards for obtaining consistency
  and uniformity among Federal agencies for the
  audit of States, local governments, and
  non-profit organizations expending Federal awards
• http//www.whitehouse.gov/omb/circulars/

13
Procurement Regulations

• Federal Acquisition Regulations
• Federal Register, Vol. 48
• September 19, 1983 pp. 42102 ff as amended
• Agency supplements thereto
• Cost Accounting Standards Board Regulations
• Federal Register, Vol. 59
• November 8, 1994, pp. 55756 ff

14
Representations/Certifications

• Legally binding authorizations that an
  institution or individual is in compliance with
  one or more standards or conditions mandated by a
  sponsor
• Requires signature of an institutionally
  authorized representative (often a vice president
  for research or director of sponsored programs)

15
Representations/Certifications

• Examples
• Drug free workplace
• Debarment and suspension
• Lobbying
• Federal debt delinquency

16
Research Institution

• Who are the players at an Institutional
  Organization for the Research Enterprise?
• Principal investigators (PI)
• Academic administrators (chairs, deans, VPs for
  academic affairs, research and finance,
  departmental administrators)
• Compliance managers (IRB, IACUC, TT, etc.)
• Administrative personnel
• Pre-award
• Post-award finance and non-finance
• Audit

17
Research Institution

• Common Structure of Research Administration
  Offices
• Depends largely on scope of activities
• Pre-award
• Pre-award and Post-award non-financial
• Pre-award and Post-award (including financial)
• Common Reporting Lines
• Depends largely on focus of office
• Faculty support (usually via academic VP)
• Graduate program support (usually via Graduate
  Dean)
• Control (Financial VP)

18
Institutional Integration

• Sponsored programs offices interact with almost
  all institutional organizational units
• Multiple boundary interface mandates extremely
  effective communication conduits

19
Life Cycle of An Award

• Start-up
• Management
• Reporting
• Close-out

• Funding Search
• Proposal Development
• Routing Approval
• Submission
• Negotiation

20
Pre-Proposal Services

• Information Library (web-based)
• Funding opportunities databases
• Individualized funding searches (usually via
  researcher training)
• Faculty interest profiles
• Program announcement dissemination
• Faculty education

21
Proposal Development

• Format and editorial Advice (agency guidelines
  and restrictions critical)
• Budget Review
• Allowable/Unallowable Costs
• Correct Rates
• Cost Sharing and Matching
• FA Waivers
• Federal Rules Set Forth in A-21, Section J

22
Proposal Review Processing

• Most schools still shuffle paper (and dream of
  electronic processes)
• Some form of internal review and sign-off of the
  proposal (or part of it) mandatory at all
  institutions
• Indicates the commitment of all participating
  parties
• Includes PI certifications and compliance reviews
• Ensures adherence to institutional and sponsor
  policies

23
Award Negotiations

• Confirm with PI
• Budget
• Work Scope
• Time
• Reporting
• Confirm with Administrative Unit
• Cost Sharing
• Matching

24
Award Negotiations

• Potential Problems
• Publications
• Indemnification and Liability
• Intellectual Property
• Non-Applicable Clauses

25
Award Acceptance

• Account assignment
• Subcodes assigned when necessary (remember CAS
  problems)
• Produce notice of award and related materials
• Issue subrecipient agreements where needed
• Database input

26
Award Performance

• Advice on allowable costs, approvals required
• Is approval needed for equipment, consultants,
  travel, and other expenses
• Compliance with terms of agreement (reports,
  deliverables, etc.)
• No-cost extensions
• Renewal applications
• Intellectual property management
• Personnel effort certification

27
Award Performance

• Cost sharing and matching documentation
• Cost transfers
• Cash drawing, billing and collection
• Financial reporting
• Stay within budget and time frame

28
Intersection Points

• (Integration or Conflict?)
• Budgets and Costing
• Award Negotiation
• Post-award Issues (prior approvals, expanded
  authorities, subawards, carryforward)
• FA, Waivers, Application of Rates
• Award Close-out
• Audits

29
Budgets and Costing

• Budget development and approval by the pre-award
  office will influence account set-up, spending
  and reporting
• Common costing issues are addressed by both pre-
  and post-award offices

30
Budgets and Costing

• Budgeting and Cost-Sharing
• Controlled by A-110 and A-21, including Cost
  Accounting Standards (CAS)
• Allowability, allocability, consistency
• A-21, F.6.b issue
• Limitation on Departmental administration
  expenses
• Use of FA as matching
• Application of appropriate rate(s)

31
Budgets and Costing

• Budgeting and Cost-Sharing
• Salary and effort issues 1/5/01 OMB
  clarification memo
• M-01-06, Clarification of OMB A-21 Treatment of
  Voluntary Uncommitted Cost Sharing and Tuition
  Remission Costs
• http//www.whitehouse.gov/omb/memoranda/m01-06.htm
  l

32
Budgets and Costing

• Cost Accounting Standards
• CAS 501 consistency in estimating, accumulating,
  and reporting costs
• CAS 502 consistency in allocating costs incurred
  for the same purpose
• CAS 505 accounting for unallowable costs
• CAS 506 cost accounting period
• http//www.whitehouse.gov/omb/circulars/a021/a021.
  htmlapa

33
Budgets and Costing

• Potential CAS Problems
• Cost sharing effort included in proposal as
  research (estimate) but recorded in accounting
  system as instruction (actual)
• Inconsistent use of codes/terminology (research
  proposal budget chemicals but accounting system
  charges materials and supplies)

34
Budgets and Costing

• Potential CAS Problems
• Department charges costs directly that are also
  in the FA rate
• Telephone equipment costs (normally charged
  indirectly but . . .)

35
Budgets and Costing

• Best Practice?
• Clear institutional policy on
• Direct vs. indirect costs
• Allowable costs
• Cost sharing includes clearly articulated
  approvals and forms
• Cross-training pre- and post-award staff on
  proposal budget development and accounting for
  actual expenses
• Education and training on the development of the
  FA rate and the DS-2

36
Award Negotiation

• Award negotiation by the pre-award office will
  govern and influence post-award financial
  administration
• Award acceptance with a bankrupt sponsor may
  become post-awards problem
• Often, pre-award is limited to what it can
  negotiate

37
Award Negotiation

• Circular Limitations
• Use of particular award instruments, A-110, __.11
• Grant, contract or cooperative agreement?
• Federal Agency Requirements
• Order of precedence
• Statutory requirements
• Agency implementation of A-110

38
Award Negotiation

• Pass-Thru Funding
• Generally from states or local governments, but
  occasionally from other universities
• Need for applicable circulars and other
  requirements
• May contain unreasonable payments terms
• Are universities utilizing FDP terms?

39
Award Negotiation

• Industry Contract Requirements
• Are reporting or billing dates reasonable?
• Are payment terms appropriate?
• Fixed price vs. cost reimbursable
• Audits clauses
• Termination clauses

40
Award Negotiation

• Best Practice?
• Pre-award staff should be apprised of reasonable
  time-lines and dates for reporting and invoicing
• Pre-award offices should involve post-award in
  drafting institutional standard contracts
• Clear policies/responsibilities for insolvent
  sponsors

41
Post Award Issues

• Pre-award activity (proposal review, agreement
  negotiation) will impact post-award requirements
• Identification of post-award requirements is
  often a primary responsibility of the pre-award
  office
• Compliance of post-award requirements is a shared
  responsibility

42
Post Award Issues

• Fixed FA Rate for Life of A
• A-21 G.7
• Best Practice?
• Implementation of G.7 should involve both pre-
  and post-award, as well as institutional
  management
• What can the institution (and its system)
  accommodate?

43
Post Award Issues

• Program Income
• A-110 __.24
• Additive, deductive, matching
• Agency A-110 Implementation
• Equipment disposal income exempt
• Intellectual property income exempt
• Best Practice?
• How best to identify program income? The sooner
  the better for post-award . . .

44
Post Award Issues

• Travel
• A-21 J.48
• Use institutional travel policy
• Foreign travel and U.S. flag carriers
• Best Practice?
• Internal notice of award should clearly indicate
  prior approval requirements
• Exceptions to institutional policy must have
  consistent application

45
Post Award Issues

• Equipment Purchases
• A-110 __.30 through __.37
• A-21 J.16
• Definitions, ownership, dispositions are all
  critical
• Best Practice?
• Direct communication on award terms to asset or
  property management
• Access to reporting requirements by property
  management to a common database

46
Post Award Issues

• Budget Revisions/Expanded Authorities
• A-110 __.25
• Required prior approvals
• Expanded authorities for research projects
• Best Practice?
• Internal notice of award should clearly indicate
  institutional authority for budget revisions
• What about non-federal sponsors?

47
Post Award Issues

• Federal Demonstration Partnership
• Special terms and conditions expanded
  authorities
• Flowdown requirements for other institutions
• Relatedness
• What does this mean for post-award?
• If you are an FDP institution, both offices need
  to know the rules

48
Post Award Issues

• Expanded Authorities
• A-110 allows institutions for (most) research
  awards for assistance activities
• 90-day pre-award costs at institutional risk
• 12-month no-cost extensions with notification
• Carryforward of unexpended funds (award by award
  determination?)
• Waiver of most prior approval requirements

49
Post Award Issues

• Expanded Authorities
• Prior approval still required for
• Change in scope
• Additional funds
• Absence of PI

50
Post Award Issues

• Best Practice?
• Again, internal notice of award should clearly
  indicate incorporation of expanded authorities
• Clearly articulated processes for notification of
  pre-award office actions (e.g., how are no-cost
  extensions communicated office to office?)

51
Post Award Issues

• Subrecipient Agreements
• Definitions of subrecipient vs. vendor
• Why does it matter?
• What to look for in making the decision
• Audits of subrecipients
• Requirements for monitoring
• Inclusion in A-133 audits (guess whose
  responsibility?)
• Appropriate flow-down clauses
• Close-out of subrecipient agreements

52
Post Award Issues

• Best Practice?
• Common database for subrecipient actions and
  jointly-developed policies
• Defined roles and responsibilities (e.g., who
  obtains the subs rate agreements?)
• Jointly developed policy for subrecipient
  monitoring
• Defined process for payment of final invoice
• And what about multi-site clinical trials?

53
FA Considerations

• Preparing negotiating FA rates
• Disclosure statement DS-2
• Animal research facilities rates setting
• Governs internal service center costing
• Negotiate fringe benefit rates
• Importance in proposal budgeting and negotiation

54
FA Considerations

• Application of appropriate rates
• Bases
• MTDC Modified Total Direct Costs
• SW Salaries and Wages
• TDC Total Direct Costs
• FA waivers
• Who does it?
• When?
• Impact on rate?

55
Close-out and Reporting

• A-110 __.70 through __.73
• 90-day reporting requirements (for federal)
• Impact of late reporting
• On individual principal investigator
• On institution
• Best Practice?
• Close-out coordination achieved by common
  database and empowered coordinating individual

56
Audit and Record Retention

• A-110 __.53 and A-133 __320
• For individual awards, 3 years after submission
  of final report
• For annual renewals, 3 years from date of annual
  report
• For audit packages, 3 years from submission to
  clearinghouse
• But, if you retain records, they are always
  subject to review
• Best Practice?
• Simple who retains what? (Really?)

57
Compliance Education

• A Significant Issue for This Century
• In past, compliance education limited to
  regulatory issues, e.g.,
• Humans
• Animals
• Ethics

58
Compliance Education

• Impact of CAS and audit findings
• Movement toward mandatory training and education
• New focus on guidelines over Responsible Conduct
  of Research

59
Compliance Education

• Is There A Best Practice?
• Affirmation of institutional policies and
  consistent interpretation
• Allows for formation of partnership with local
  administrators and investigators, as well as pre-
  and post-award staff
• Will not succeed without support from the top

60
Summary

• This is an immense field and we have just raised
  issues, didnt provide many answers
• National conferences 3-4 days, over 1500 people,
  42 concurrent sessions

61
Summary - Resources

• Strongly recommend you take advantage of
  resources provided by
• National Council of University Research
  Administrators (NCURA)
• http//www.ncura.edu/
• Council of Governmental Relations (COGR)
• http//www.cogr.edu/