Research Administration Policies
RA60 Cost Management
Subject Matter Expert:
Policy Steward:Vice President for Research and Corporate Controller>
- General Cost Management Principles
- Pre-Award Expenditures
- Budget Realignment
- Further Information
- Cross References
To provide policy on costs incurred on sponsored awards to assure compliance with controlling guidance.
Costs charged to sponsored awards are controlled by specific policy and guidelines. The following are all applicable, with the most restrictive policy or guideline enforced when there are discrepancies:
- University Policy and Guidelines
- See GURU
- Specific Agency Guidelines
- Governmental Costing Standards
- State and Federal Laws and Regulations
Sponsored awards also need to be managed with the highest level of integrity and ethics. Anyone involved in sponsored award administration who believes that a non-compliance issue has arisen must contact the Research Administrator, Financial Officer or the Compliance Hotline.
Additional guidance can be found in RA02 – Stewardship of Sponsored Programs.
DIRECT VS. INDIRECT (F&A) COSTS
There are a number of costs which are typically covered by F&A, including administrative and clerical salaries, general purpose equipment, paper, toner, office supplies, routine photocopying, mailing services, telecommunication costs, and memberships. In special circumstances, it may be permissible to charge such items as direct costs, but only after completing a Cost Accounting Justification Form. If this form was not completed at the time of the proposal, it MUST be completed when the cost is incurred. Please note that if the expenses were not included in the original proposal, it may be necessary to request the sponsor's prior approval before direct charging such costs. Additional guidance can be found in RA21 and the Cost Accounting Standards FAQ.
NOTE: Although applied through a rate, fringe benefits are a direct cost. Therefore directly charged salaries will always have directly applied fringe benefits.
All costs need to have adequate documentation to support their application to a sponsored award. The documentation must provide enough detail for a reasonable person to understand the purpose of the cost and how it benefited the sponsored award. These justifications must be documented in appropriate IBIS forms through the explanation, purpose, description and/or notepad. Additional justification, such as the Cost Accounting Justification Form noted above, or explanations for late transfers, may also be required by the Research Coordinator or Financial Officer, beyond the detail included within the expense transaction.
Signatures on reports, including effort confirmation, are asserting a claim that the contents of the reports are accurate and appropriate. To protect those signing, thorough review of reports, including effort confirmations, is critical before reports are signed. It is the responsibility of the PI to bring to the Research Administrator or Financial Officer any questions regarding reported costs before signing and certifying the costs. Knowingly signing an incorrect report regarding costs charged to a sponsored award is a false claim. See RA02 – Stewardship of Sponsored Programs for additional information regarding compliance with the False Claims Act.
ADVANCED FUND NUMBERS
Occasionally, a college/unit will decide to establish a restricted account before the agreement has been fully executed. For example, certain federal agencies permit universities to incur costs up to 90 days prior to the begin date of a grant. In other cases, colleges and units will decide to accept the risk associated with establishing a restricted account, even though the formal agreement has not yet been received, negotiated, and/or executed in the Office of Sponsored Programs. In all such cases, advanced restricted accounts (or "advanced funds" as they are more commonly referred to) must be established.
No work should be done and no expenses should be incurred on a project until an account has been established in the University accounting system (IBIS). It is unacceptable to charge such costs to general funds or to other restricted accounts.
The unit that established the advanced fund assumes all financial and non-financial responsibility in the event the agreement is never executed. Invoicing cannot occur until an agreement is fully executed.
Even if the college/unit is willing to accept the financial risk associated with incurring costs for a pending project, it is still essential to ensure that the performance of the project will not jeopardize human subjects or animal subjects, expose personnel to health and safety risks, or violate laws and regulations (e.g., performing work for a sanctioned person or country). Thus, advance funds will not be established until all required compliance checks are complete. See RP03 – The Use of Human Participants in Research, RP04 – Care and Use of Vertebrate Animals, RP06 – Disclosure and Management of Significant Financial Interests, RA40 – Compliance with Federal Export Regulations, and RAG40 – Guidelines for Ensuring Compliance with Export Control Policy RA40.
Budget realignment is the process of adjusting the original awarded budget. There are many considerations in determining if a budget can be realigned, including departmental and college restrictions. Agency or sponsor regulations are the prime determinant if realignment is permitted and within what parameters. PIs must refer to the award terms and conditions before making changes to the original awarded budget.
See RA63 – Budget Realignment for detailed information regarding Federal Awards and budget realignment.
Sponsored awards generally will not cover unemployment compensation as a direct cost of the award. Sponsored awards which recover an F&A rate higher than 15% can recover unemployment costs from a central account, given that unemployment costs are factored into the F&A rate. Sponsored awards which recover F&A of 15% or less are not eligible for central payment of unemployment compensation and the unit must cover these costs through other non-sponsored funding sources.
For questions, additional detail, or to request changes to this policy, please contact the Office of the Vice President for Research or the Office of the Corporate Controller.
Other Policies may apply, especially:
RA02 – Stewardship of Sponsored Program
RA21 – Development of Proposal Budget
RA40 – Compliance with Federal Export Regulations
RA63 – Budget Realignment
RAG40 – Guidelines for Ensuring Compliance with Export Control Policy RA40
RP03 – The Use of Human Participants in Research (Formerly Policy RA14)
RP04 – Care and Use of Vertebrate Animals (Formerly Policy RA15)
RP06 – Disclosure and Management of Significant Financial Interests
Effective Date: February 26, 2016
Date Approved: February 22, 2016
Date Published: February 26, 2016
Revision History (and effective dates):
- February 26, 2016 - This new policy has been created as part of the policy reorganization brought about by implementation of the Uniform Guidance (2 CFR 200).
- January 18, 2018 - Added "Unemployment Compensation"