DIVISION OF RESEARCH
Compliance and Sponsored Projects Financial Management for Administrative and
Support Staff
Fall 2008
Kimberly Klatt
Research Compliance Officer
Agenda
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University Compliance Overview
Research Compliance Regulations
Basic Cost Principles
Allowable/Unallowable Costs
P-card Expense Descriptions
Proportional Charging (allocation)
Costs Transfers
Transactions Requiring DoR Approval
New Fabrication Policy
Clarkson University Compliance Program
• University Compliance Committee (UCC)
established in 2005.
• UCC formed to ensure compliance facing the
University.
• UCC consists of six sub-committees.
• Committee responsible for handling, reviewing,
monitoring and enforcing all University
compliance matters.
• Research compliance represents one of the six
sub-committees.
Clarkson University Compliance
Committee Structure
University
Research
Development
And Board
Activities
Environmental
Management
Clarkson
University
Compliance
Committee
Finance &
Insurance
Student Affairs
Information
Technology
Research Compliance
Regulations
http://www.clarkson.edu/dor/compliance
When sponsored funding is accepted by the
institution we agree to comply with federal
and state regulations:
• OMB A-21 - Cost Principles
• OMB A-110 - Uniform Administrative
Requirements
• OMB A-133 - Audits
• Assurances, Certifications, & Representations
Why is Research Compliance
Important?
Non-compliance can place Clarkson and the
Principal Investigator at significant risk and
can result in:
Damage to the University’s or your
reputation and integrity
Severe fines/penalties to the institution
Designation as a “high risk” institution
Suspension/debarment from receiving
federal funds (University and PI’s)
Realities of Compliance
• Compliance is a collaborative responsibility of
the administration, faculty, and staff.
• We have a legal responsibility to comply with
federal and state requirements.
• Our daily activities and responsibilities often
have an underlying purpose regarding
compliance.
– Conflict of Interest Forms
– P-card Reconciliations
– Cost Transfers
– Constitution Day
– Hiring Practices
– Etc...
PI Responsibilities
The responsibilities or obligations that PIs agree to when accepting an award
include the following:
 Commitment: Review all documentation including referenced materials within
the award documents and comply with the terms and conditions.
 Communication: Review the roles and responsibilities of all parties involved in
the project and assure that they are aware of their obligations.
 Technical Management: Manage the technical aspects of the program and
comply with the deadlines and reporting requirements in award documents or the
statement of work.
 Supervision: Staff the project and supervise project personnel.
 Financial: Charge to the research account only those expenditures directly
related to the technical completion of the project that are allowable, allocable,
and reasonable, as defined by OMB Circular A-21.
 Accuracy: Review the monthly accounting statements to verify that all charges
to that account are appropriate.
DoR & Comptroller’s Office
Responsibilities
Education: Making people aware of the importance of compliance guidelines
Guidelines: Providing written documentation that clearly reflects the how to be
compliant.
Training: Providing indoctrination to guidelines and continual guidance on how to
be to compliant.
Oversight: Continuous monitoring of practices such as purchasing consistent with
the guidelines of the University and sponsoring agency.
Auditing: Verification of policies and current practices.
Responsibility: Providing a clear understanding of individual responsibility .
Communication: Effectively exchanging information.
OMB A-21 Basic Cost Principles
Direct vs. Indirect
Direct Costs: Allowable costs that can be identified
specifically with a particular sponsored project(s) and
be assigned easily with a high degree of accuracy.
Indirect Cost (F&A): Allowable costs that are incurred for
common or joint objectives and therefore cannot be
identified readily and specifically with one or more
sponsored project.
OMB A-21 Basic Cost Principles
“How to Distinguish Between Direct and Indirect Charges”
http://www.clarkson.edu/dor/grant_mgmt
• Defines what costs are allowable to sponsored projects.
• Requires institutions to classify allowable costs either as direct or
indirect costs.
• Allowable costs must be consistently treated as direct or indirect.
• Consistent treatment of costs assures that the same types of costs
are not charged both as direct and indirect costs.
• Costs classified as indirect cannot be charged directly to your
sponsored project, unless they qualify as an “unlike or unique
circumstance”.
How To Determine a Allowable
Direct Cost
“How to Distinguish Between Direct and Indirect Charges”
http://www.clarkson.edu/dor/grant_mgmt
Direct Charges must pass meet the following criteria:
Allowable: Permitted as a charge per OMB Circular A-21.
Necessary: to accomplish the scope of work of the project.
Reasonable: nature of the cost, and the price paid, reflects the action that a prudent
person would have taken.
Allocable: the cost can be allocated specifically with one research project or if
the cost benefits more than one project it can be allocated based on proportional benefit or
a reasonable basis.
Consistently Treated: Costs must be classified as a direct charge by the University.
Charges must meet all criteria above. If not, they must be charged
to a non-research account.
What Can’t Be Charged Directly
to
a Sponsored Award?
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Office Supplies
Administrative and Clerical Staff Salaries
Basic Line Telephone Charges
Administrative Office Equipment (i.e. copiers, office computers
and printers)
• General Use Software (Word, Excel, Access, or equivalent)
• General Use or janitorial Items (paper towels or soap)
“How to Distinguish Between Direct and Indirect Charges”
http://www.clarkson.edu/dor/grant_mgmt
Exception to the Rule
Costs normally considered indirect can
be charged as direct if they qualify as an:
Unique Circumstance
or
Unlike Circumstance
Both circumstances must be properly justified and
documented.
What are Unique and Unlike
Circumstances
Unique Circumstance:
• Use exceeds amount typically required for a project.
• Purpose is not different from University norm.
• i.e. Researcher needs to prepare 10,000 surveys for distribution;
requiring additional paper, toner, envelopes, and postage.
Unlike Circumstance:
• Research purpose is different from University norm.
• i.e. Scope of work is analyzing the composition of toner;
requiring additional toner cartridges for analysis.
“How to Distinguish Between Direct and Indirect Charges”
http://www.clarkson.edu/dor/grant_mgmt
How Do You Justify and
Document Unique or Unlike
Circumstances?
New Proposals
• Justify the expenditure in the budget justification.
• Let Todd Travis know during the proposal process you have an
unique or unlike circumstance.
• If you receive the award the DOR will notify Accounts Payable that
such charges are allowable.
Active Awards
• You can notify the Research Compliance Officer (RCO) at ext. 4441.
• RCO will quickly document the circumstance and notify Accounts
Payable that the charges are allowable.
If unique or unlike circumstances are not properly justified and
documented Accounts Payable will send out a Direct Cost Justification
Form requesting reallocation or justification.
What Can Be Charged Directly to
a Sponsored Award?
• Laboratory Supplies (i.e. chemicals and glassware)
• Long Distance Telephone Calls
• Laboratory Equipment (>$5000 with agency
approval)
• Equipment maintenance or repair
• Computers, Printers and Networking Supplies (for
research data collection or processing only)
• Specialized Software (Computational)
• Travel
“How to Distinguish Between Direct and Indirect Charges”
http://www.clarkson.edu/dor/grant_mgmt
Examples of Unallowable
Food & Beverage Charges
• Any cost related to entertainment
• Any cost not necessary to accomplish the
objectives of the grant program
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Receptions
Hospitality Room
Pizza for graduate students
Lunch for students during a local research
activity.
• Meals with colleagues to discuss research
• Lunch during weekly meetings to discuss the
progress on a project
Allowable Food & Beverage
Charges
• Food and beverages may be allowable if all the
following tests are satisfied:
– Food and beverages are not directly related to
entertainment or social event.
– Food and beverages are integral in order to
provide continuity to a work related activity (i.e.
conference, professional meetings, formal
training) and considered mandatory for the
attendees if they are to receive the full benefit of
participation in the event.
– Costs of the food and beverages are considered
reasonable.
Examples of Allowable
Food & Beverage Charges
• Food & beverage cost for an employee on travel
status when travel is necessary to accomplish the
objectives of the grant program.
• An individual is recruited to fill a position on a
research grant and he/she travels to Clarkson.
Her/his meal may be charged to the grant since
she/he is on travel status, but the PIs meal may not.
• Meals or refreshments for a formal advisory
committee meeting mandated or designated to meet
periodically as part of project management (should
be included as part of the proposal, utilizes formal
agendas and includes participants from different
locations).
P-Card Reconciliations
You must provide adequate justification to determine if the charge is
allowable:
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“Expense Descriptions” should indicate the benefit to the
project or scope of work (i.e. What is the item used for ?,
Why do you need the item?).
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Provide documented evidence to auditors that costs are necessary for the
performance of the project.
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Remember to proportionally charge expenses used for more than one project or
educational activity.
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Federal auditing regulations require that “Expense Descriptions” are reviewed by
the Accounts Payable Staff.
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Proper “Expense Descriptions” will minimize the need for Accounts Payable to
request additional information (i.e. Direct Cost Justification Form)
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This methodology also applies to purchase requisitions, disbursement orders,
and travel expense accounts.
Some Expenditures Are More Scrutinized By
Auditors and May Include:
General Lab Supplies (i.e. gloves)
Computers & Printers
Networking Supplies & Software
Travel & Books
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Expense descriptions and proportional charging are often scrutinized by auditors
on these types of expenditures.
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These need additional justification in the P-card expense description line (see
provided direct cost justification forms for the questions to ask yourself).
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If the cost benefits one project only, then simply indicate the item is used for that
project only.
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This additional documentation will minimize the need for Accounts Payable to
contact you. (i.e. Direct Cost Justification Form).
Direct Costs Justification
Forms
Direct Cost Justification Form
Direct Cost Justification Form
Examples
Your students are working late and you want to provide them
dinner. How should you pay for it?
You want to buy a computer and a printer with your
research award. Can you? What about paper and
toner?
You’re buying general lab supplies (gloves, soap, centrifuge
Tubes). Can I charge them to my research award. If so,
How do I proportionally charge them?
Allocation of Charges
Two rules apply when proportionally charging direct costs that
Benefit more than one sponsored project or educational activity:
• Rule of Proportional Benefit
If a cost benefits two or more projects or activities in proportions
that can be determined without undue effort or cost, the cost
should be allocated to the projects based on the proportional
benefit.
• Rule of Interrelationship
If a cost benefits two or more projects or activities in proportions
that cannot be determined because of the interrelationship of
the work involved the costs may be allocated or transferred to
benefited projects on any reasonable basis.
Acceptable
Allocation Methods
• Usage Based: The cost of lab supplies allocated based upon the
quantity used on each project or documented usage of equipment.
• Time Based: The cost of computer equipment allocated based upon
the number of hours used for each project.
• Effort Based: The cost of lab supplies proportionately allocated
based upon the PIs percentage of effort charged to each project.
• Other reasonable methodologies can be developed, provided that
they meet the A-21 allocation principles.
Contact the DOR for further assistance.
Unacceptable Allocation
Practices
• Shifting expenditures to other sponsored projects in
order to meet deficiencies, to avoid restrictions, or for
other reasons of convenience
• Charging expenses that benefit two projects solely to
one project because the other project is almost out of
funding
• Rotating charges among projects
• Charging an expense to one project when the
expense has benefited more then one project or
other activities
Allocation Documentation
• Allocation methodologies must be
documented and auditable when
employed.
• Documentation should indicate how the
allocation methodology is logically related
to the cost being allocated.
• Documentation should be retained by PI.
Appropriate Reasons for Cost
Transfers
• Correct errors in processing the original transaction
• Reallocate shared services
• Reallocation of effort and other non-labor expenses
where multiple projects benefited
• To shift pre-award costs in accordance with the
provision of OMB Circular A-110
Unacceptable Reasons for Cost
Transfers
• Charges from University accounts to
externally funded accounts generally are not
acceptable. (Exceptions include phone
charges, xeroxing or postage normally made
to the department)
• Cost transfer is solely for the intent of utilizing
unexpended funds of a sponsored award
• Cost transfer is for the purpose of avoiding a
cost overrun by charging another, unrelated
sponsored award
Transactions Requiring DoR
Approval
• All Travel Expenses (object codes 2654/2656)
– Travel Authorizations (TA)
– Expense accounts under which no TA was written
– Expense accounts that exceed the amount of the TA
• Participant Support Costs (excludes p-card)
• Single transactions that exceed $1000.00
• All equipment/fabrication (object codes 2534/2528,
excludes p-card)
For efficient processing times please send to the DoR initially.
New Fabrication Policy
• Comptroller’s Office has issued a new policy allowing the use of the
Procurement Card for the account code 2528 – Fabrication of
equipment.
• It can only be used if the appropriate “Fabrication Request Form”
has been completed and approved. You will find the new policy and
form on the Clarkson University website at the following URL:
http://www.clarkson.edu/finance
• If you have any questions please contact Connie Klingbeil at the
Office of Risk Management and Purchasing at 315-268-7722 or
Karen Barrett of the Comptroller’s Office at 315-268-7650.
DoR Contact Information
Greg Slack
Director of Research and Technology Transfer
gslack@clarkson.edu ext. 6475
Todd Travis
Award Administrator (Pre-Award)
ttravis@clarkson.edu ext. 6475
Connie Ferguson
Contract & Grant Administrator (Post-Award)
cferguson@clarkson.edu ext. 6475
Kimberly Klatt
Research Compliance Officer
kklatt@clarkson.edu ext. 4441
DoR Contact Information
Adele Pugliese
Sr. Dept. Secretary
(MAE, ECE, PPAS, IACUC)
apugliese@clarkson.edu
Billi Jo Goodfellow
Sr. Dept. Secretary
(CAMP, CBE, BIO, PSY, C&M)
bgoodfellow@clarkson.edu
Norma Woods
Administrative Secretary
(CAMP, CBS, PT, CEE )
nwoods@clarkson.edu
Heather Kish
Sr. Dept. Secretary
(CUSB, PHY, MCS, HSS, IRB)
hkish@clarkson.edu
Comptroller’s Office Contact
Information
Jim Fish
Comptroller
fishj@clarkson.edu ext. 6689
Donna Martell
Associate Comptroller
dmartell@clarkson.edu ext. 7258
Sue Scott
Chief Accountant
scotts@clarkson.edu ext. 6407
Kelly Rathbun
Research Accountant
krathbun@clarkson.edu ext. 6462
Elizabeth Corbine
Accounting Assistant (P-cards)
ecorbine@clarkson.edu ext. 3789
Comptroller’s Office Contact
Information
Roberta Chestnut
Accounting Assistant (POs)
rchestnu@clarkson.edu ext. 3789
Betsy Niles
Head Cashier (Aramark)
nilesbm@clarkson.edu ext. 6486
Sarah Ellis
Accounting Assistant (DOs/Travel)
sellis@clarkson.edu ext. 3789
Karen Barrett
Endowment/Plant Accountant (Fabrication)
kbarrett@clarkson.edu ext. 7650
DOR WEBSITE
http://www.clarkson.edu/dor
Funding Resources
Proposal Preparation
Grant Management
Compliance
Training
Export Controls
Technology Transfer
QUESTIONS?