Award Administration

Introduction

Sponsored & Academic Programs Support (SP) in collaboration with the Principal Investigator (PI) is responsible for administering all sponsored projects awarded to the University. This includes monitoring budget transactions, verifying and enforcing sponsor terms and conditions, processing administrative reports, preparing and overseeing subcontracts, and implementing changes mandated by both Federal and private agencies. The Controller’s office is responsible for monitoring expenditures to ensure compliance with University Policies and Procedures and sponsor requirements. The Controller’s office is also responsible for the distribution and interpretation of financial accounting information such as monthly budget reports.

When a PI agrees to implement a sponsored award or contract, he/she assumes legal, managerial, and ethical obligations. Not only must a PI have the technical expertise to produce and deliver the products or services outlined in the grant, he/she must also possess managerial skills to ensure the program’s objectives are achieved in an efficient and cost-effective manner. Even a well-executed project that meets its objectives will not be considered favorably by the sponsor if there are reporting and budget problems. Therefore, it is highly recommended that a PI become familiar with fundamental managerial concepts, since this can be a deciding factor in a program’s failure or success.

SP has developed a Grant and Contract Management Workshop especially for PIs.  Current or prospective PIs or project managers are encouraged to either attend a workshop or receive the training one-on-one with a SP officer.

Controller's Office

The Controller’s office provides the PI with information as needed to effectively manage his/her award and monitors the financial activity on contracts and grants to ensure compliance with University policies and procedures and sponsor requirements. The Controller’s office coordinates all audits within the contracts and grants area performed by the University’s independent auditors, Federal agencies and other sponsoring agencies. The Controller’s office is also responsible for the preparation and negotiation of the Federal Facilities and Administration (indirect) cost rates and fringe benefit rates.

Although the Controller’s office prepares monthly financial reports for each project, it is the responsibility of the PI to ensure that all expenditures are allowable. In particular, Federal grant expenditures must be allowable as defined in OMB Circular A–21. The University’s grant accountants are available to answer any questions a PI may have regarding the allowability of costs.

Establishing an Account

To establish an account, SP will provide the Controller’s office with the award letter from the sponsor, a copy of the proposal transmittal, and the approved proposal budget (revised if necessary). The account is set-up in accordance with the approved budget and the sponsor’s specified terms and conditions. The Controller’s office then sends an Account Number Request/Authorization form to the PI for signatures. This form provides the PI with an account number; the pink copy is returned to the Controller’s office. SP then meets with the PI to review the specified terms, conditions, and reporting requirements, and provides the PI with a fully-executed copy of the award agreement.

SP will facilitate quarterly meetings to offer just-in-time training for the PI to fully understand the administrative requirements for executing the funded program. PIs who receive funding are required to attend quarterly meetings to complete the “Uniform Administrative Requirement for Grants and Agreements Check List.” It is the responsibility of the PI to ensure that grant funds are expended in accordance with the award agreement.

The PI is required to submit to the Controller’s office documentation supporting any deviations from the approved budget and/or exceptions/changes to the terms and conditions. It is the responsibility of SP to contact the funding agency relative to the PI’s request and clarify any questions raised. The PI should not spend based on the revised budget until written approval is received from the sponsor (if required by the grant).

Monthly Accounting Reports

PIs or program directors can monitor their grant accounts by accessing Cardinal Direct Budget. The system tracks monthly and year-to-date expenditures for each grant account.  Using the system on a consistent basis helps the PI fulfill his/her role as the primary grant manager and allows him/her to contact Sponsored Programs or grant accountant to correct any inconsistencies immediately. A brief tutorial can be found at http://www.svsu.edu/controllersoffice/financialreportingservices/.

Personnel

If indicated in the grant budget, one of the first steps in implementing a sponsored project will be the hiring of project personnel.  The SVSU Department of Human Resources (HR) will help with this process.  All positions funded by grants and contracts require that a full affirmative action search be conducted. However, recruitment efforts may vary depending on the type and level of the position.  Recruitment procedures, checklists and forms are listed at www.svsu.edu/hr under Policies. HR will also prepare contracts of employment in cooperation with the PI. Yearly performance reviews are required.  Personnel forms such as the HR Action Form may need to be updated annually or semi-annually, depending on the grant’s end date.  If you are hiring a student worker for a grant funded position, you first need to post the job description with SVSU’s Career Services department.  A student job description template can be found in the appendix.

Subcontracting

Subcontracts/Subagreements that were not included in the proposal often require the sponsor's approval prior to executing a formal agreement and commencing work.  SP, in coordination with the PI, is responsible for preparing and overseeing subcontracts as approved in the sponsored project award and issued by the University to other organizations. In general, the subcontractor is subject to the same terms and conditions of the award, as is the University. Therefore, the subcontract agreement prepared by SP contains specific terms and conditions, an approved budget, and a statement of work. The subcontract is reviewed and approved by the PI. To be binding, the subcontract must be signed by the authorized official of the University and the subcontractor. When the agreement is fully-executed, payment is made to the subcontractor per submission of an invoice, signed by the PI, to the Controller’s office. Extensions and changes to the subcontracts are made by SP and the Controller’s office based on the approval of the primary sponsor.  The choice of a particular subcontractor must be documented with regard to the subcontractor's qualifications to perform the work and the project's need for such services.  Competitive bids may be required; please consult with the Controller's office to see requirements.

Travel Policy

Travel costs are the expenses for transportation, lodging, meals, and related items incurred by employees who are traveling on official business for the University as stated in the approved budget. It is important to first understand SVSU’s travel policy, which can be accessed at http://svsu.edu/operationsmanual. Further, if the project’s Sponsor requires compliance with regulations as outlined in OMB Circular A–21, another set of rules also applies. It is necessary that the PI become familiar with the policies that govern their award to avoid unallowable costs. (Also see program announcement for additional restrictions and guidance.) Reimbursements require itemized receipts.

Procurement

When purchasing any individual items (goods or services) with a unit cost or total cost of a group of items of $1,000 or more, the PI needs to provide a written bid or sole source documentation to the Purchasing Department and the Controller’s office. Purchasing documentation will help to ensure that the acquisition of goods and services are done in a competitive, fair, and timely manner.

The documentation must be received and considered by Purchasing prior to commitment of an order. The Purchasing Department is responsible for managing the bidding process for most of the goods and services required by University departments. Within its scope of operation, Purchasing handles the qualification of potential bidders, the solicitation and analysis of bids, and the awarding of business to vendors. It is important, therefore, that each PI communicate their needs and plans for major purchases to the Purchasing Department as early as possible so there will be reasonable time to accomplish the bidding procedure.

Equipment

According to University policy, equipment purchased with sponsored project funds is defined as having a unit cost of $5,000 or more and a useful life of greater than one year.  Equipment to be purchased with Federal funds must be approved by the sponsor in advance and listed in the proposal. If you wish to purchase equipment not listed in the proposal, you must receive prior approval through SP and the funding agency.  The purchase of general-purpose equipment (for example, office equipment and furnishings, reproduction and printing equipment, or computers) is allowable only if the equipment is primarily used to carry out project activities and the purchase has been approved by the sponsor.

Property Management

University policy guidelines require that all non-expendable property having an acquisition cost of $5,000 or more and having a useful life greater than one year is subject to property control. Property control includes the maintenance of property records, the tagging of equipment items, and periodic physical inventories (at least every two years).

A representative from the Controller’s office will coordinate the tagging and inventory of all equipment items with the assistance of the PI. The PI is held responsible for the location of the equipment as well as the maintenance.  The information on record, which is necessary for the maintenance of the property inventory file, is as follows:

  • Purchase order number
  • SVSU account number
  • Description of item
  • Manufacturer
  • Cost
  • Building and room location
  • Model and serial numbers
  • Workstation number, if applicable
  • Acquisition date

Expenditures

It is the responsibility of the PI to ensure that purchases are allowable within the grant guidelines. For Federal grant projects, items which are not allowed (A-21, A-110) include, but are not limited to: entertainment, alcoholic beverages, promotional items, advertising, club dues, and legal fees. As the primary grant manager, it is recommended that the PI become familiar with the cost principles found in OMB Circular A–21. Questions concerning allowable costs should be directed to the Controller’s office.

The University’s grant accountants are available to meet with a project’s PI, Department Secretary, or Administrative Assistant to review how to fill out and submit the appropriate forms for the payment of an expenditure and answer any budget-related questions. No expenditure payment will be approved prior to the receipt of the official award notification of funding by the sponsor.

Cost Transfers

Cost transfers are occasionally needed to correct errors in original charges. There are instances, however, where cost transfers can be avoided simply by reviewing the original charge to see that it is set up correctly. Directly charging the appropriate program (account) initially results in fewer cost transfer requests.  This policy ensures timeliness in transferring costs and keeps the University compliant in the event of an audit.  Frequent cost transfers may indicate the need for enhanced internal controls and/or accounting system improvements.  Cost transfers are generally more scrutinized and increase the risk of an audit.  Cost transfers follow University and sponsor policies.   For example, expenses must be all of the following:

  • Allowable under the terms of the agreement and University policy
  • Allocable in that they provide a direct benefit to the grant and advance the work
  • Reasonable in that they reflect the actions a prudent person would have taken under the circumstances existing at the time the decision was made
  • Consistent in that costs are treated similarly throughout the University

 

Cost transfers should be completed within 90 days of when the expense originally appears in the transaction detail (Datatel).  Transfers requested after this time period will require additional justification and supporting documentation explaining how the error occurred.

Cost transfers must be certified to approve the new charge; the PI is the fiduciary of the project and its expenditures.  Additional approval will be necessary for those transfers completed more than 90 days after the expense appears in the transaction detail (Datatel).

Financial Reports

Financial reports (including final financial close-out reports) which are required by the sponsor are the responsibility of the Controller’s office. The objective is to ensure that the financial reports submitted by SVSU to sponsors are presented fairly, timely, and contain complete and reliable information.  Financial reports are generally due within 90 calendar days of the end of each budget period, but may vary according to specific program guidelines. It is the responsibility of the PI to ensure that all transactions for the budget period are completed and expensed against the sponsored project account by the end of each budget period.  Any balance not obligated on a sponsored program will be returned to the sponsor unless the sponsor has authorized (in writing) that the unexpended funds may be retained by the University or carried over for use in continuing years of the project. All reports containing any financial information must be reviewed and submitted by the Controller’s office.

Effort Reporting

Faculty, staff and student effort is needed to achieve a grant’s scope of work.  If effort is charged to the grant account or reported as cost share, it must be recorded in a timely manner. The Project Time Log (SP website) and the In-Kind database (www.svsu.edu/inkind) are two methods available to salaried employees to track grant effort.  SP recommends that effort be logged daily and certified monthly by the person performing the effort.  Controller’s office will verify grant effort three times per year by the person performing the effort and the PI. PI effort is verified by the PI’s supervisor or dean three times per year. When a faculty member is paid during Sping/Summer term, he/she will need to log hours to support rate of pay is consistent with base salary.

Audit

Federal awards are subject to annual audits by the University’s independent auditors as dictated by the Office of Management and Budget Circular A–133. This audit is performed to ensure that the University is managing its Federal awards in compliance with applicable laws and regulations. The audit includes tests of internal control systems affecting all Federal awards, as well as tests of individual transactions.  The results of the audits are reported to the Federal government (Department of Navy, SVSU’s cognizant agency).

In addition to the annual audit, the University may be subject to audits of individual awards. These audits are typically conducted by the sponsoring agency. The PI will be notified of this upcoming visit and will receive support of the Controller’s office and SP in preparation for the visit. Any resulting report will be filed with the Controller’s office and SP.