***Congratulations*** First Time Award

Recipients of Purdue University!

Agenda

Welcome (Mike)

Award Specific Requirements (Rob)

Federal Requirements (Rob)

AIMS (Jolene)

Reporting (Jolene)

Record Retention (Jolene)

Indirect Costs (F&A) (Mike)

Intellectual Property (Mike)

Research Administrative Compliance (Pete)

Award Specific Requirements: Items You Need to Know About

Compliance with terms and conditions of award:Publication review Publication citationsConfidential material – marking, storage,

agreement with research teamIntellectual property – disclosure, informing

sponsorRecord retention and storage

Federal RequirementsCosts Should Be:

Allowable: Consistent treatment of the cost as either direct or indirect

DIRECT: Identified specifically with a particular sponsored project, instructional activity, or any other institutional activity

INDIRECT: Those costs incurred by Purdue that cannot be easily identified to a specific project, but which benefit the research function

Allocable:

On the basis of the benefit received or some other equitable basis

Reasonable:

Reflects the action of a prudent person

Charging to Sponsored Accounts

Role of the Principal Investigator:

Project implementation as described in the proposal and award

Assemble necessary staff

Direct the work within the budget period and the funds authorized

Charging to Sponsored Accounts Role of the Principal Investigator:

Manage expenditures within the fiscal regulations and amounts

specified by the sponsor

Provide technical liaison with the sponsoring agency

Prepare and submit timely technical reports as required in the

contract/grant instrument

Apprise Department Head of project performance and progress

Certify the appropriateness of expenditures (This certification

should be included in the documentation assigning the charge.

The certification must be from an authorized individual who has

knowledge of BOTH the cost and the project.)

Cornell University

Cornell agreed to pay $4.38 million to settle claims it over billed for NIH grant from 1995 to 2003. It is alleged that Children’s CRC at Weill Medical College used federal grant dollars to pay full salaries of several employees not involved with research.

N E W S H E A D L I N N E W S H E A D L I N E S E S

Thursday, June 23, 2005

N E W S H E A D L I N E W S H E A D L I N E SN E S

Florida International University

Tuesday, February 15, 2005

Florida International U. agrees to $11.5 million settlement with Government over grants accounting and accusations that university improperly billed the government for scientists’ time, travel, and administration expenses. A 2003 audit found that the university had not properly documented whether faculty members had spent the percentage of time they had promised to spend on research projects financed by the grants.

N E W S H E A D L I N E S

Harvard University

Friday, July 2, 2004

$3.3 million settlement involving allegations that Harvard and an affiliated hospital overcharged NIH research and training grants by seeking reimbursement for the salaries of researchers who did not work on the grant.

N E W S H E A D L I N E S

Johns Hopkins University

March 12, 2004

$2.6 million settlement of allegations that JHU had knowingly overcharged the Government by overstating the amount of time researchers worked on Federal research projects and in at least one case charging for more than 100% of an individual’s salary.

Charging to Sponsored Accounts

Effort Reporting – PARs

(Personal Activity Report)

OMB Circular A-21 requires procedures and documentation in support of salaries and wages distribution under a system of Personnel Activity Reports.

Charging to Sponsored Accounts

Purpose of PARs Account for 100% of the compensated effort of faculty members,

graduate research assistants and other professional staff by distributing percent of effort among the various categories of the activity report.

Reasonable estimate of actual services performed. Estimate must be a matter of careful reflection and judgment, and take into account all activities which benefit the University and for which the individual is compensated.

Each report will be signed by the employee or by a responsible official having first-hand knowledge of the work performed.

Cost Transfers Costs allocable to an award may not be transferred to another award:

To meet deficiencies caused by overdrafts

To avoid restrictions imposed by the terms of an agreement

Or for other reasons of convenience

N E W S H E A D L I N E S

Mayo Clinic

Friday, May 27, 2005

Mayo paid $6.5 million to settle allegations that it misspent millions of dollars in federal research grants over more than a decade. The government contends that, from 1992 to 2003, Mayo routinely took federal money that was supposed to be used for specific research projects, and used it for other projects that were running short of money. That allowed the clinic to avoid refunding unused grant money, as required by law, the government alleged.

Cost Transfers Retroactive cost transfers represent one of the most common areas for audit disallowance. Due to this fact, the moving of costs requires:

Timeliness (within 120 days of original transaction)

Full explanation (“to correct error” is insufficient explanation)

PI’s certification

Available Reports AIMS: Account Information Management System

Web-based access to sponsored program financial information

Big picture and drill down information is available

Anytime/Anywhere

https://www.purdue.edu/aims/

Reporting RequirementsEstablished by the sponsor and communicated in the award instrument. Timely report submission is important:

Critical stewardship

Requirement (part of terms and conditions)

Incremental funding or future funding may be dependent upon receipt of the report

Reporting RequirementsReporting Requirement Notifications:

Reminder is sent the month prior to technical report due date

Overdue notice is sent 60 days after technical report due date

Faculty are also notified of required invention reports

Record Retention Award terms allow auditors the right of access to all

University records associated with a project

Auditors may visit departments to review supporting documentation and interview personnel who have certified effort on projects

Individuals who have signed PARS and time cards must be able to confirm the effort as certified was accurate at the time it was signed

Record RetentionThe Principal Investigator is responsible to maintain for a period of three years following the completion of the final report, the following information:

Scientific records and data

Animal and human subjects material (if applicable)

Changes to the Project

Some common post-award changes that require agency prior approval are:

Scope changesKey personnel changesPI’s absence for more than 3 months or 25% reduction

in effortAdditional funding needsTransfer of amounts previously awarded for trainee costsSubcontractsSpecific award restrictions

Changes to the Project

SPS has information available by sponsor concerning what changes to the project require sponsor approval and which ones can be approved internally. This information is available at:

http://www.purdue.edu/SPS/accountmgmt/priorapproval/index.html

Specific templates are available at this website to request internal prior approval as appropriate.

Direct vs. Facilities & Administrative

Costs and Consistency of those Costs Direct Costs:

Identified specifically with a particular sponsored project, instructional activity, or any other institutional activity

Assigned to such activities relatively easily with a high degree of accuracy

Direct vs. Facilities & Administrative Costs and Consistency of those Costs

Costs normally treated as Direct costs:

Project Personnel

Travel

Supplies

Equipment

What is “F&A Cost”?

Facilities and Administrative costs a.k.a. ‘indirect costs’

Those costs incurred by Purdue that cannot be easily identified to a specific project, but which benefit the research function

F&A costs are charged (recovered) from grants, contracts and other agreements by applying an agreed upon percentage to an adjusted set of direct charges to the projects

F&A recovery is an unrestricted reimbursement to the University for costs already incurred

Direct vs. Facilities & Administrative

Costs and Consistency of those Costs

Direct vs. Facilities & Administrative Costs and Consistency of those CostsCosts normally treated as F&A costs:

Salaries & Wages of Administration and Clerical Personnel

Office supplies

Local telephone charges

General computing environment expenses

Space costs associated with where the project is conducted

Direct vs. Facilities & Administrative

Costs and Consistency of those Costs Treated Consistently:

Costs are incurred for the same purpose, in like circumstances.

Costs are either direct costs only or facilities and administrative costs only (unless specifically justified).

Regulatory EnvironmentThe F&A cost process is highly regulated and is

administered by the federal government.Rates are renegotiated every three years through a

detailed process. The current rate is 52% for on campus research.

Various agencies may provide further restrictions on specific grants, e.g. USDA 19%, State of Indiana 0%

Purdue must sign certification and assurance statements that all costs are allowable, follow sound accounting practices and are adequately documented.

Administrative portion of our rate is capped at 26%.

Direct vs. Facilities & Administrative

Costs and Consistency of those Costs

Comparison of Research Costs & Cost Recovery FY2002

Direct vs. Facilities & Administrative

Costs and Consistency of those Costs

$ Actual Spent $ Recovery(millions) (millions)

Interest Expense on Facilities Bonds $1.8 $1.1Building Depreciation $4.4 $1.4Equipment Depreciation $6.2 $1.8Operations and Maintenance $19.3 $8.3Library $2.4 $0.8

Total Facilities $34.1 $13.4

General Administrative $9.3 $3.4Departmental Administrative $22.0 $9.9Sponsored Projects Administration $3.5 $1.3

Total Administration $34.8 $14.6

Grand Total $68.9 $28.0

Unrecovered F&A Costs $40.9

Peer Comparisons

Direct vs. Facilities & Administrative

Costs and Consistency of those Costs

Peer University Research F& A RateCornell University 58.0%Georgia Institute of Technology 49.4%Pennsylvania State University 44.0%Purdue University 52.0%Texas A&M University 45.5%University of Arizona 51.0%University of California - Berkeley 52.0%University of California - Davis 48.5%University of Illinois 53.0%University of Michigan 53.0%University of Texas at Austin 50.0%University of Wisconsin 45.5%

Mean excluding Purdue 50.0%

Intellectual Property

The Office of Technology Commercialization (OTC)

serves the University through the commercialization

of its intellectual property.

http://www.otc.purdue.edu/

Intellectual Property

University Policy:Summarized in Executive Memorandum B-10

http://www.purdue.edu/oop/policies/pages/teach_res_outreach/b_10.htmlDeemed a part of the conditions of employment for every

employee of the UniversityPart of the conditions of enrollment and attendance by

studentsAll creators of Intellectual Property shall execute appropriate

assignment and/or other documents required to set forth ownership and rights as specified in the policy

Intellectual Property

The policy covers the following issues related to Intellectual Property and outlines ownership and applicability of each:

Inventions Copyrightable Works Trademarks Tangible Research Property Reconveyance of Rights to Inventor/Creator Equities of Participating Parties

Regulatory IssuesConflict of Interest:   

Faculty and staff members must obtain prior approval of the President of the University, on President’s Form 32a.

The individual may own rights to Inventions, Copyrightable Works, and other forms of Intellectual Property made or developed in outside activities, other than those involving the use of University Resources, provided such ownership is approved on Form 32a.

Regulatory Issues

Grants and Contracts are made to institutions rather

than individuals. Thus, it is the responsibility of the

University to adopt policies and procedures to ensure

research integrity, safety, and compliance with all

applicable State and Federal regulations

Regulatory Issues

Regulation policies and procedures apply to all

categories of research and apply to all projects

regardless of the source of funding (whether internal

or external).

Regulatory IssuesPrincipal Investigators are responsible assuring research integrity and for obtaining specific institutional approval for research utilizing:

Radiological materials and radiation producing devices (Radiological Control

Committee)

Vertebrate animals (Purdue Animal Care & Use Committee – PACUC)

Human subjects (Institutional Review Boards)

Recombinant DNA and other potentially biohazardous materials (Institutional Biosafety

Committee)

Class 3b or 4 lasers (Laser Safety Committee)

It is important that all regulatory approvals are current or in the process of being updated when proposals are submitted. If the sponsor issues an award and approvals are not current, establishment of the project account will be delayed.

Regulatory Issues PI’s are asked to report the status of regulatory approvals

on the Proposal Transmittal Checksheet. 

SPS is responsible for certifying to sponsoring agencies that PI’s have obtained institutional approval as needed.

SPS works closely with OVPR Office of Research Administration to verify that appropriate regulatory approvals are current and maintains computer and paper records of all the approvals for each proposal. 

For information concerning institutional approval and the individuals to contact, please consult

http://www.purdue.edu/research/vpr/compliance/index.html

Helpful Websites Research at Purdue

http://www.purdue.edu/research/vpr/ SPS Home Page

http://www.purdue.edu/sps Cost Accounting Standards/Blue Book

http://www.purdue.edu/costing/ Executive Memorandum B-10/Intellectual Properties

http://www.purdue.edu/oop/policies/pages/teach_res_outreach/b_10.html

Helpful Websites Office of Technology Transfer

http://www.otc.purdue.edu/ Regulatory

http://www.purdue.edu/research/vpr/compliance/index.html Prior Approval

http://www.purdue.edu/sps/accountmgmt/priorapproval/index.html AIMS

http://www.purdue.edu/aims/ Electronic Submission – Fastlane

https://www.fastlane.nsf.gov/fastlane.jsp

Contact Information

Michael R. Ludwig, Associate Director 496-3089 Sponsored Program Services mrludwig @purdue.edu

Rebecca L. White, Assistant Director 494-1052 Sponsored Program Services rlwhite @purdue.edu

Peter E. Dunn, Assoc. Vice Provost 494-6840 Office of Vice Provost for Research pedunn@purdue.edu

Jolene A. King, Assist. Director/financial affairs 494-0220 Business Office Engineering jolene@purdue.edu

Thank you for attending

today’s session