Managing Awards
| Introduction | Foreign Travel |
| Setting up an award in SAP | Rebudgeting |
| Charges to the award | Meals/Entertainment Costs |
| Pre-award Spending | Cost Share |
| Transfers | Close-out Information |
| Salaries & Wages |
Managing an award is a collaborative effort between the investigators, departmental staff and the Office of Sponsored Programs (OSP) – Post-Award. Investigators are responsible for completing the scope of the project within the project budget, for preparing and submitting any required technical reporting due to the sponsor, for completing effort reports (PARs) and for ensuring costs charged to the award are in line with university and sponsor rules and regulations. Investigators are also responsible for working with subaward investigators and communicating with their department financial staff any changes or concerns. (See Managing Subawards) Departmental financial staffs are responsible for processing financial transactions and working with the investigator to ensure that expenditures are in line with university and sponsor rules and regulations. OSP – Post-Award project specialists are responsible for setting up the project and budget in SAP, monitoring the project, providing guidance on sponsor rules and regulations, preparing sub-award agreements, requesting reimbursement from the sponsor, and filing required financial reports with the sponsor.
An award will be set up in SAP when all of the required information has been received. In SAP, the award will be captured within a WBS. This WBS number is 13 digits long, begins with a ‘2’. Information needed to set up this WBS number includes:
- Award Document – Signed by all parties
- Detailed budget that matches sponsor award amount and institutional cost share
- Signed, completed routing form – including signatures for cost share (if applicable)
- Verification of applicable compliance (human subjects, vertebrate animals, ionizing radiation, hazardous materials and recombinant DNA approvals)
- Current Conflict of Interest Disclosure
- Subaward Information (contact information, budget, detailed statement of work), if applicable.
- Copy of proposal
Awards are typically set up three times per week unless payroll processing precludes updating of SAP during a regularly scheduled time. WBS numbers are not set up for a department if the department has delinquent PARs due.
All charges to the award must comply with university and sponsor rules. Charges posted to an award must be for goods or services directly benefiting the award and rendered during the award period.
Charges to federal or federal pass-thru awards must meet the criteria of OMB Circular A-21. Generally speaking, costs must be reasonable, allocable, allowable, and treated consistently. OMB Circular A-21 defines reasonable as the actions a prudent person would have taken under similar circumstances to purchase the item for this cost. For a charge to be reasonable, it must be necessary for the performance of this award. If the charge is due to special circumstances, they should be documented in the file. Other factors, such as arm’s-length bargaining, federal and state laws and regulations should also be considered. Allocable means that the award directly benefits in the proportion of the expense that was charged to it. The cost must be incurred solely to advance the work under the sponsored agreement or it must benefit the agreement and other work of the university in proportions that can be approximated through the use of a reasonable method. Or it is necessary to the overall operation of the university and it is deemed to be assignable in part to a sponsored project. Allowable means that this expenditure is permitted as a direct cost under the terms and conditions of this specific award or contract. Treated consistently means that like expenses are treated the same in similar circumstances. (i.e. office supplies would generally be considered indirect costs and not directly charged to an award unless there are documented, extenuating circumstances.)
Charges must be allocated to an award in direct proportion to the benefit received by expense. This allocation must be documented and a reasonable method used. Charges for items not in the approved budget may require prior written sponsor approval. A copy of this approval should be kept in the department’s financial files or sent to OSP Post-Award. If written sponsor approval is not required, the charge should be documented with the justification for its need.
In some instances, charges may be incurred up to 90 days prior to the start of the award. If sufficient notification has been received from a sponsor to determine that an award will be made, the award may be set up in SAP with the completion of the IPAS form. The signed, completed form should be sent to the OSP Post-award project specialist. If an award is subsequently not made, any expenses charged to the award must be removed and covered by the department. Check with your project specialist if you have a need to spend prior to the beginning of the award. All charges prior to 90 days of the start of the award require written sponsor approval.
Transfers of expenses must be thoroughly documented. If the transfer is made more than 90 days after the original cost was posted, a detailed explanation for the delay in making the transfer must also be included. “Use the same document header as the original entry (don’t say transfer), include as much detail in the text and use extra text.” Give examples of explanations – Is this too detailed for this section?
Per OMB Circular A-21, costs allocable to a particular sponsored agreement may not be shifted to other sponsored agreements in order to meet deficiencies resulting from overruns or other fund considerations, restrictions imposed by law, restrictions imposed by terms of the sponsored agreement, and reasons of convenience.
Charges that are not allowable per OMB Circular A-21 must not be charged to federal grants and contracts. Items that are normally considered indirect charges can only be charged to federal grants and contracts if specifically approved in writing by the sponsor and the circumstances for their need justified. These items would normally include administrative and clerical salaries, office supplies, toner cartridges, diskettes, local telephone charges, cellular phones, copy charges, memberships, journals and subscriptions. OMB Circular A-21 does provide some exceptions where these expenses may be charged to a grant or contract. Check with your OSP Post-Award project specialist if you have questions about the allowability of these types of expenses for your award or contract.
Section J 10 of the circular pertains to Salaries and Wages. It states, in part (emphasis added): Charges for work performed on sponsored agreements by faculty members during the academic year will be based on the individual faculty member's regular compensation for the continuous period which, under the policy of the institution concerned, constitutes the basis of his salary. Charges for work performed on sponsored agreements during all or any portion of such period are allowable at the base salary rate. In no event will charges to sponsored agreements, irrespective of the basis of computation, exceed the proportionate share of the base salary for that period. This principle applies to all members of the faculty at an institution. Since intra university consulting is assumed to be undertaken as a university obligation requiring no compensation in addition to full time base salary, the principle also applies to faculty members who function as consultants or otherwise contribute to a sponsored agreement conducted by another faculty member of the same institution. However, in unusual cases where consultation is across departmental lines or involves a separate or remote operation, and the work performed by the consultant is in addition to his regular departmental load, any charges for such work representing extra compensation above the base salary are allowable provided that such consulting arrangements are specifically provided for in the agreement or approved in writing by the sponsoring agency.
Effort reporting is the documentation (or invoice) for salaries and wages charged to an award or claimed as cost share for the award. Salaries and wages are documented via Personnel Activity Report (PARs) forms. See PAR Policy and Instructions for information and instructions on completing these forms.
Many sponsors have restrictions on or require prior written approval for foreign travel. Foreign travel paid for with federal or federal pass-through funding is subject to the Fly America Act. Check your award rules and regulations to determine if this applies. A copy of written approval for foreign travel should be kept in the department’s financial files or sent to OSP Post-Award.
Many sponsors have guidelines when approval is needed for rebudgeting. If your award has such guidelines, you must contact the sponsor prior to changing the budget. Once approved (or if sponsor approval is not needed), a new budget should be submitted to your OSP Post-Award project specialist.
You should be aware of the effect of rebudgeting on the F & A amount. F & A is charged in accordance with award expenditures not as budgeted. For example, see chart below, equipment expenditures (non-F & A bearing) were $5,000 over the budgeted amount while other direct expenditures were $3,425 less than budgeted resulting in a reduction to F & A charges of $1,575.
Expenditure |
Budgeted |
Expenditures |
| Salaries and Benefits | 25,000.00 |
21,575.00 |
| Operating Expenses | 5,000.00 |
5,000.00
|
Equipment |
12,000.00 |
17,000.00 |
Total Direct |
42,000.00 |
43,575.00 |
F & A (at 46%) |
13,800.00 |
12,224.50 |
|
|
|
| Total | 55,800.00 |
55,799.50 |
In the next example, equipment expenditures were $7,000 under the budgeted amount while other direct charges were $4,794 over the budgeted amount. The result is an increase in F & A of $2,205.
Expenditure |
Budgeted |
Expenditures |
Salaries and Benefits |
25,000.00 |
29,794.00 |
Operating Expenses |
5,000.00 |
5,000.00 |
Equipment |
12,000.00 |
5,000.00 |
Total Direct |
42,000.00 |
39,794.00 |
F & A (at 46%) |
13,800.00 |
16,005.24 |
|
|
|
Total |
55,800.00 |
55,799.24 |
Allowable Costs
Meetings and conferences. "Costs of meetings
and conferences, when the primary purpose is the dissemination
of technical information, are allowable. This includes costs
of meals, transportation, rental of facilities, and other
items incidental to such meetings or conferences."
Unallowable Costs
Alcoholic beverages. "Costs of alcoholic beverages
are unallowable."
Entertainment costs. "Costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs (such as tickets to shows or sports events, meals, lodging, rentals, transportation, and gratuities) are unallowable."
Business meals and meeting costs, although not explicitly prohibited under A-21, have been the subject of a great deal of scrutiny in audits. It is recommended that, where possible, these costs be specifically included in the project budget (which assures that the sponsor approves the expenditure). Also, to substantiate the business purpose of the meeting expenditures, departments are required to provide the following:
- the purpose of the meeting (i.e., content of discussion)
- a list of the attendees (names or group association) present at the meeting
- itemized receipts with requests for payments
- the date and location of the meeting, if it is not self-evident.
Further, the costs must be reasonable and allocable to the project. To determine reasonableness, we often ask our colleagues whether the cost would stand the "front page of the newspaper" test.
If cost share is included in the proposal and/or budget that is awarded, then UNL must document that cost share was provided. Items included as cost share must be in conformance with the same rules and regulations as direct charges to award fall under. Much of the cost share is effort and will be documented on a PAR. Other items must be identified and documented. If there is a high volume of transactions other than payroll and the dollar amount is large, a companion cost center may be established to accumulate cost share costs for a particular award. For more information on Cost Share, see Documenting Cost Share. Contact your OSP Post-Award project specialist if you need a companion cost center.
For close-out information, please see Closing an Award.
