Research Administration for Scientists Tim Quigg, Associate Chair and Lecturer Computer Science Department, UNC-Chapel Hill OMB Circular A-110: Administrative

Research Administration for Scientists

Tim Quigg, Associate Chair and LecturerComputer Science Department, UNC-Chapel

Hill

OMB Circular A-110:Administrative Requirements

COMP 918: Research Administration for Scientists

© Copyright 2012 Timothy L. Quigg All Rights Reserved


A-110 Administrative Requirements

Uniform administrative requirements for grants and agreements (not contracts which are subject to the FAR) with

institutions of higher education, hospitals and other non-profit organizations

Federal agencies shall not impose additional or inconsistent requirements … unless

specifically required by law or executive order.


A-110 Administrative Requirements

Financial Management Systems Program Income Budget and Program Revisions Expanded Authority Equipment Intangible Property (Patents, Copyright and Data) Procurement Standards Reports and Records (Performance and Financial) Termination Close-Out Procedures Cost Share Recharge Centers

We’ll touch on the important issues in each of these areas!


Financial Management Systems

Accurate, current and complete accounting of financial results by project

Comparison of expenditures with budgeted amounts

Written procedures to determine allocability and allowability of costs (consistent with A-21)

Effective control over and accounting for funds and other assets (including equipment –

asset accounting system)


Financial Management Systems

Written procedures to minimize the time elapsing between the transfer of funds from the U.S. treasury and payment of project expenses.

I often hear faculty ask, has the check for my grant money arrived yet?

It would be nice if the system worked that way, but it doesn’t. So how are funds transferred from the U.S. treasury to the university?


Two primary methods for transfer: Weekly (or periodic) electronic “draw down”

estimate of financial requirements for the coming week (period) for all awards from that agency

penalties (paying interest to feds) if excessive

separate process for each agency (NIH, NSF)

Invoice – Reimbursement incur the expense first and then request

“reimbursement”

can be either electronic or paper process

significant delay! Who finances the “float time”?


Program Income

“gross income earned by recipient that is directly generated by a

supported activity or earned as a result of the award.”

Examples: Fees for services

Rental of property acquired under award

Sale of items fabricated under award


Program IncomeConsistent with agency regulations or the T&C’s of the award, Program Income may usually be retained by recipient and used in one or more of the following ways:

Added to project and used to further project objectives

Used to finance the non-federal share of project (must be approved at proposal

time)

Deducted from federal funds

IMPORTANT: If you anticipate having program income, disclose it at proposal time to obtain required prior approvals!


Budget and Program Revisions

Prior approval from awarding agencies is normally required for:

Change in the scope or objectives of project Change in key personnel (specified in proposal and

award) Absence for more than 3 months or a 25% reduction

in effort by the PI Need for additional federal funding Transfer of funds between direct and indirect costs

and from training allowances to any other category

Sub awards unless included in application and approved in award


Expanded AuthorityAgencies may allow recipients to develop their own systems (IPAS) for approving certain actions:

Incur pre-award costs 90 days prior to award Expenses must be consistent with budget All pre-award costs are at recipient’s risk Can go more than 90 days with agency approval

Initiate a one-time no-cost extension of the project period for up to one year

10 days prior to expiration date Provide reasons (fund balance is not a reason)!

Carry forward balances to subsequent funding periods


Equipment

“Tangible, nonexpendable personal property charged directly to the award having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. (Less if consistent with recipient policy)”

Title vests with recipient (usually)

When project ends, residual equipment must be used for:

1. Other projects funded by same agency

2. Other federally funded projects

Must have adequate property management system


Intangible Property: PatentsRecipient and Government Rights:

Recipient may patent (and “own”) any invention developed under award (subject to 37 CFR Part 401) and institutional policy

but Recipient must grant the government a

royalty-free, nonexclusive, irrevocable Government-Use license.

And then there are “March-in” Rights!


“March-in” Rights!

March-in rights give the federal government the right to grant other entities licenses if there is a threat to public safety that the owner of the patent is not equipped to handle.

The likelihood of march-in rights being exercised by the government is small because, to date, they have never been exercised by the government.

However, with technology and terrorism on the rise, the chance that a patented invention could prevent a terrorist attack is increasing!


Intangible Property: Copyright

Recipient and Government Rights:

Recipient may copyright (and “own”) any work developed under the award consistent with their institution’s policy

but Recipient must grant the government a

royalty-free, nonexclusive, irrevocable right to reproduce, publish or otherwise use the work for federal purposes or to authorize others to do so.


Intangible Property: Data

Recipient and Government Rights:

Recipient may obtain, reproduce, publish or otherwise use the data produced under award

but Recipient must be willing to authorize

others to also use for federal purposes.

Note: Neither patent nor copyright protection extends to data!


Procurement Standards

“for procuring supplies, expendable property, equipment, real property and other services with federal funds…”

Codes of Conduct – Conflict of Interest

Competition – Open and free

Written Procurement Procedures

Utilization of small businesses, minority- owned firms and women’s business enterprises whenever possible


Program Performance (Progress) Reports: PI Responsibility

Performance reports may not be required less frequent than annual nor more frequent than quarterly. They normally contain:

Comparison of actual accomplishments with approved goals/objectives for period

Reasons why goals were not met (if applicable) Other pertinent information including analysis of

any unexpected cost issues Notification of any other developments that may

have a significant impact project


Financial Reports: Institutional Responsibility

Usually completed by the university OSR

Financial Status Report (SF-269 or 269A) Not less than quarterly or more frequently than monthly Due 30 days after end of period

Report of Federal Cash Transaction (SF-272) Used when funds are advance

Records retention Three years from submission of final expenditure

report


Termination

Award may be terminated only if one of the following applies:

By agency, if recipient materially fails to comply with T&Cs of award.

By agency with consent of recipient, if both agree on termination conditions and effective

date.

By recipient upon written notification to agency setting forth the reasons and effective date.

Partial terminations must be accepted by agency!


Closeout Procedures

Recipients shall submit to agency within 90 days of the project end date, all financial, performance and other required reports.

“Sticky Issues” Invention Report Encumbered Expenses Equipment


Cost Share“that portion of a project’s costs not borne by

the federal government (may include cash and/or third party in-kind).”

Cash: if it comes from the recipient and appears in the recipient’s accounting records as a transaction, it’s cash!

In-kind: if it comes from a third party (outside the institution) and doesn’t appear in the recipient’s

accounting records as a transaction, it’s in-kind!

However, if cash is donated to the recipient from a third party, is spent by the recipient, and appears in the

recipient’s accounting records as a transaction, itbecomes cash!




Verifiable in recipient’s records

Not included as contribution for any other federally- assisted project

Necessary and reasonable for proper and efficient accomplishment of project objectives

Allowable under applicable cost principles (A-21) in the same manner as federally-supported costs




Value of in-kind donations (services, equipment and space use, and volunteer time) must comply with applicable cost principles and follow reasonable business practice.

Bottom-line – the value can’t be unreasonably inflated and must be consistent with reasonable

cost Example: Value of volunteer time or space must

be verified using prevailing commercial rates and must be documented (I like using an invoice that “bills” for the service and then shows a credit and a zero balance)




Example: Standard “education discounts” on equipment would not be eligible cost share.

However, additional manufacturer discounts above standard education discounts may be eligible (with prior approval from agency)

All cost share must be included in approved budget

NOTE: Unrecovered indirect costs may be used as cost share with prior approval of awarding agency


Types of Cost Share

Mandatory, required as condition of award

Voluntary, offered either in excess of mandatory requirement or

when not a stated condition of the award

NOTE: Commitments in proposals become requirements in award!



Timing of Cost Share

Only expenditures incurred or services rendered during the period of the

award can be counted as cost share (subject to same pre-award rules)

Some agencies expect/require cost share expenditures to occur at approximately the same pace as federal dollars.


Examples of Cost Share

Employee time, including fringe benefits

Equipment

Volunteer time or other contributed items

Unrecovered F&A - if approved by sponsor (so be certain to include in proposal

budget)

Sub-recipient (or subcontractor) cost-sharing

Directly related supplies and services


Sources of Cost Share

University funds

Unrecovered Facilities and Administrative Costs

Third party contributions

Other Non-Federal Sponsored Projects (rarely allowed)


Unallowable Cost Share

Items not allowable under A-21

Items normally treated as Indirect

Specifically Unallowable Costs

Cost share used on other projects

Items paid with federal funds


Repercussions of Unmet Cost Share

Identify amount of unmet cost share funds

Identify the programmatic effect and Notify agency immediately!

The agency will often require repayment of a proportionate share of grant funds

Note: Unsatisfactory documentation may be treated as unmet cost share!


Recharge Centers A Recharge Operation is a facility, center, operation, function, account, or activity whose output is susceptible to measurement on a workload or other quantitative basis. The costs associated with these activities are separately accounted for and charged to users in proportion to services rendered. The primary purpose of a recharge operation is to provide specific services to the university research community on a break-even basis, although services may be provided on an incidental basis to external users.


Examples of Recharge Centers

Copy Machine Charges

Glass Shop

Computer Services

Lab Animals

Electric Power/Utilities


Service Center/Service Facility: $50,000 - $1,000,000/year Usually not university-wide in scope

Special Service Facilities (SSF): A-21 Section J.44 – “institutional services involving

the use of highly complex or specialized facilities such as electronic computers, wind tunnels, and reactors …”

University-wide in scope > $1,000,000/year

Recharge Center: < $50,000/year

Alternate Names


The charge for each service must include allowable direct costs; and when appropriate, the allocable share of facilities and administrative costs.

Recharge Centers may be (and often are) subsidized using non-federal funds.

Users should be directly billed for each service based on a schedule of rates that does not discriminate between federally and non-federally supported activity.

However, it is permissible to charge external users a higher rate!

Characteristics


Goal is to operate on a break basis – Rates should not recover more than the total cost of the center over a long-term period. A period is normally defined as one year.

If a substantial balance exists in the recharge center account at the end of the period, it is assumed the rates were too high. They must be lowered for the next period.

Likewise, if there is a negative balance in the recharge center account at the end of the period, it is assumed the rates were too low. They must either be raised for the next period or the center must be subsidized with non-federal funds.

Characteristics


Certain costs such as depreciation on capitalized equipment should be included in either the university’s F&A cost proposal or in the fees of a Recharge Center. If the cost for the same piece of equipment is included in both the F&A rate proposal and a Recharge Center fees, there is the potential the federal government could be double charged for the same cost.

This is not allowed!

Relationship BTW F&A and Recharge Center Operation/Costs


Depreciation prorates a portion of the acquisition cost of “capitalized” equipment to each accounting period during which the equipment is in use. The Recharge Center must pay for the equipment in the year of acquisition, but may only include in its rates the IRS allowable depreciation amount each year (straight-line depreciation method) Automobiles – 4 years

Computers – 6 years

All other equipment – 10 years

Equipment Capitalization


May include commercial entities as well as students, faculty, or staff acting in a personal capacity (versus in their student or employee role within the University).

Inappropriate outside use of recharge facilities could jeopardize the university’s tax-exempt status. We aren’t running a business!

Umstead Act – North Carolina specific – prevents universities from competing with private business!

Issues with External Customers:

Documents

Research Administration for Scientists Tim Quigg, Associate Chair and Lecturer Computer Science Department, UNC-Chapel Hill OMB Circular A-110: Administrative