A-21

From budgets to post-award…

Agenda

• What is A-21? – quick overview• Budget categories captured by A-21• Proposal budgets and A-21 (overview and tips)• What happens at the post-award side?• Compliance issues• Questions

What is A-21 and why do we care?

• OMB Circular A-21AllowableAllocableReasonableConsistently treated(Cost Accounting Standards)

• Cost Principles for Educational Institutionshttp://www.whitehouse.gov/omb/

circulars_a021_2004

A-21 Monitored Budgets

• Budget Categories and Expense AccountsAdministrative SalariesClerical SalariesGeneral SuppliesPostageTelephoneHosting

Proposal Budgets

• To charge A-21 sensitive expenses to a Federally sponsored project the following two criteria must be met during proposal process:The costs can be specifically identified with the

objectives of the project or activity (Related to the project?)

The costs are explicitly listed in the University-proposed and sponsor-approved budgets (Budget Justification)

Budgets continued…• We know all projects require a certain level of account

reconciliation, correspondence, communications, and office expenses. Then how does a proposed A-21 charge differ from the standard level expected to be provided by the institution for all projects (Indirect Cost)? Be specific but yet leave yourself some room for maneuvers

― MATERIALS AND SUPPLIES: Support in the amount of $10,000 per budget year is requested for necessary supplies such as PCs, monitors, printers, printer paper, cartridges, commercial software, software upgrades, software licenses, cables, adapters, cards and storage devices.

― MATERIALS AND SUPPLIES: Support in the amount of $10,000 per budget year is requested. $4,000 for 2 PCs, $700 for a printer, $800 for office supplies(paper, books, journals, folders, etc.), and $4,500 for computer supplies and software.

― Do not forget about the 25% re-budgeting allowance for most awards under FDP. A-21 staff will consider it when you already have approved budget under any of your A-21 categories. Make sure to check your FDP terms and conditions. DOE’s terms are different than the ones for NIH and NSF.

Budgets continued… HR: Keep your appointment titles on the research side

— Research secretary vs. Research assistant. Manager vs. Laboratory manager. Are the charges necessary to meet the technical needs of the award rather than to support the administrative needs?

Think post-award when doing pre-award because faculty know only research— Food supplies for a seminar or for subjects are still Hosting

Unlike vs. unique circumstances— PIs have the ability to request for items that are considered unlike or unique circumstances.

Unlike Circumstances:» The cost has a specific research purpose that is different from the University

standard. » The PI can document justification (Prior identification and justification in the

proposal budget is encouraged, when possible) Unique Circumstances:

» Use of the item exceeds the University standard.» The cost has a specific research purpose that is not different from the University

norm.» The PI can document justification (Prior identification and justification in the

proposal budget is required.

Unlike vs. Unique• Unlike Circumstances

– PI is researching on the aerodynamics of flight and will need reams of paper to construct model planes. Normally, paper falls under office supplies used for printing and should be considered as an indirect costs. In this situation, the paper has a specific research purpose - different from the University norm, therefore allowing it to be charged as direct cost.

• Unique Circumstances– PI is preparing a survey for distribution to 5,000 individuals and expects

the need for 20 reams of paper. Normally, paper is considered an office supply and provided through indirect costs. In this situation, the paper has a specific research purpose - same as the University norm (used for printing), but exceeding the normal amount. The paper may be purchased with direct research funds with pre-approval and justification but the PI must identify and justify the cost in the budget submitted with the proposal.

A-21 Reports• An A-21 report is ran for each P/G every year because the OMB

Circular guidelines require that certain restricted expenses be reviewed to determine allowability and appropriateness.– A-21 Report process for each P/G:

• Business Objects query to capture expenses that fall under A-21 based on their account code

• If A-21 charges and no approved budget, report is sent to department.

– A-21 staff is trained to:• Review imaging for:

Prior approvals (signed FDP forms, sponsor approvals, prior A-21 report correspondence) Budgets and justification

• Process JEs to re-classify expenses without the need to contact department As long as voucher detail provides enough information to do so

• Process 7471s to adjust budgets• Seek behind-the-scenes approval from ORSP on certain items

Compliance A-21’s guidelines on effort reporting are very confusing and do not give you

a clear guidance. A-21 expects researchers to know approximately how they spend their effort. All researchers should be aware of how many hours in average they spend on a project.

What might seem like and be used as a laboratory supply does not necessarily become one. A-21 staff are trained to treat purchases for what they were designed rather than for what they were used.

— Paper towels used in the lab are still paper towels and ultimately A-21. — Regular notebooks vs. Laboratory notebooks— Labels, tape, markers (heat or chemical resistant)

Be sure to request approval from ORSP on any A-21 items you do not have budget for but need to charge on a project before you incur the cost.

― If ORSP denies your request, the charge has to be covered using your faculty’s discretionary funds.

Unacceptable Practices

• Purchasing items simply to exhaust an unobligated balance• Moving funds (both salary and other costs) around on

federal grants. This is a “red flag” in any federal audit… the auditor assumption is that you are moving funds around to cover other funding or grants that have ended.

• Charging an expense exclusively to a single award when the expense clearly has supported other activities

• Charging researcher’s travel to a grant he/she is not or never been appointed to. If that person presented material related to the project, he/she should have effort on that project.

Questions?

batanaso@umich.edu734-615-1329