Research Administration

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Research Administration For Scientists

• COMP 290-083
• Tim Quigg
• Class 6 February 11
• Cost Sharing
• OMB Circular A-133
• Recharge/Service Centers

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Assignment Due February 25

• Budgets (with all components from project
  description)
• Budget justification (up to 3 pages)

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Issues

• Cost Share Defined
• Allowable and Unallowable Cost Share
• Identification of Sources
• Identification of Responsible Persons
• Regulations
• Audits and repercussions

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Definition

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

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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

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Special Notice!!
Commitments in proposals become requirements
upon award.
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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

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Budget Example

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Budget Example

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Examples of Cost Sharing

• Employee time, including fringe benefits
• Equipment
• Volunteer time or other contributed items
• Unrecovered FA, if approved by sponsor
• Subrecipient cost-sharing
• Directly related supplies and services

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Sources of Cost Sharing

• University funds
• Unrecovered Facilities and Administrative Costs
• Third party contributions
• Other Sponsored Projects (if allowed)

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Responsible Persons

• Shared responsibilities
• Principal Investigator
• Department Administrator (Liaison)
• Central Office

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When to Include Cost Sharing

• Mandated by Sponsor
• Contribution is necessary to ensure success of
  competitive proposal

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

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Finding Cost Share

• Some Acceptable Items Include
• Salaries and Fringes
• Lab Supplies
• Travel
• Unrecovered FA

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Unallowable Cost Share

• Items not allowable under A-21
• Items normally treated as Indirect
• Specifically Unallowable Costs
• Cost share used on other projects

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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???

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Cost Share or FA?

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

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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

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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

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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

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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

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Audits of Cost Share

• OMB A-133 Audits

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OMB Circulars A-133

• Audit standards for states, local governments,
  and non-profit organizations receiving over
  300,000/year in federal funding

• Purpose is to promote consistency and
  uniformity
• Follow GAGAS (issued by Comptroller General of
  U.S.)
• Apply to all federal agencies unless governed
  by specific law
• Single Audit Act of 1984, amended 1996

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Audits of Cost Share

• OMB A-133 Audits
• Program Audits
• Project Financial Audits
• Agency Inspector General Audits

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Common Audit Findings
Sharon Kiser Source Federal Grants News 3/02
quotes from NSF Inspector General

• 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

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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

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Summary

• Cost share when mandatory
• Be conservative in valuing for budget
• Track and document timely
• Provide information to Sponsored Programs for
  Official Records

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Recharge Centers
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Definition
A Recharge Operation is a facility, center,
operation, function, account, or activity whose
output is susceptible of measurement on a
workload or other quantitative basis. The costs
associated with these activities are separately
accounted for and charged to users in proportion
to services rendered. The primary purpose of a
recharge operation is to provide specific
services to the university community although
services may be provided on an incidental basis
to external users.
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Examples

• Copy Machine Charges
• Glass Shop
• Computer Services
• Lab Animals
• Electric Power/Utilities

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Alternate Names

• Recharge Center
• lt 50,000/year

• Service Center/Service Facility
• 50,000 - 1,000,000/year
• Usually not university wide in scope
• Special Service Facilities (SSF)
• A-21 Section J.44 institutional services
  involving the use of highly complex or
  specialized facilities such as electronic
  computers, wind tunnels, and reactors
• University-wide
• gt 1,000,000/year

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Characteristics

• The costs of each service must include its direct
  costs and when appropriate, its allocable share
  of facilities and administrative costs.

• The cost of each service should be directly
  billed to users based on a schedule of rates that
  does not discriminate between federally and
  non-federally supported activity.
• Break even operation rates should not recover
  more than the total costs of the center over a
  long-term period. A period is normally defined
  as one year.

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Relationship BTW FA and Recharge Center
Operation/Costs
Certain costs such as the cost of capitalized
equipment should be included in either the
facilities and administrative costs proposal or
in the rates of a recharge operation. If the
cost for the same piece of equipment is included
in both the proposal and a recharge operations
rate there is the potential that the federal
government could be double charged for the same
cost.
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Equipment Capitalization

• Depreciation prorates a portion of the cost of
  capitalizable equipment to each period the
  equipment is in use. In other words, even though
  the recharge operation pays for a piece of
  equipment in full during the year of acquisition,
  the recharge can only include in its rates the
  depreciation amount attributable to the current
  year.
• Automobiles 4 years
• Computers 6 years
• All other equipment 10 years

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External Users

• Commercial entities and students, faculty, or
  staff acting in a personal capacity (versus in
  their student or employee role within the
  University).
• Inappropriate outside use of recharge facilities
  could jeopardize The University of North Carolina
  at Chapel Hills tax-exempt status.
• Umstead Act