Preserving The Public Trust In
Research: A USC Partnership
To Promote Research Integrity
It’s about more than just good
science: A how-to guide for
effective grants management
Supplemental Materials
1
Whose Money Is It?
Not ours!
• USC and the Principal Investigator
are stewards of public/sponsor funds
2
Who Ultimately Is Responsible
for Grants Management?
The Principal Investigator
•
•
Federal Authority
 NIH Grants Policy Statement
• http://grants1.nih.gov/grants/policy/nihgps_2003/inde
x.htm
 NSF Grant Policy Manual
• http://www.nsf.gov/pubsys/ods/getpub.cfm?gpm
University Policies/Procedures (http://policies.usc.edu)
• Sponsored Projects Manual
http://www.usc.edu/dept/contracts/comply.htm
3
What USC Resources Exist to
Assist Principal Investigators?
• Research administrators
 Should assist PIs in meeting administrative
requirements of project
• Department administrators/senior
business officers
 Can assist PIs in understanding departmental
and school specific requirements
• Central administration
 Contracts and Grants, financial analysis,
sponsored projects accounting, purchasing,
audit and compliance
4
Types of Agreements
• Grants
• Contracts
• Cooperative Agreements
5
What Is a Grant?
 A financial assistance award that provides
money, property, services, or anything of
value to recipient in order to accomplish a
public purpose
 No substantial involvement is anticipated
between sponsor and recipient during
performance of activity
6
What Is a Contract?
• An agreement between two or more persons,
organizations or entities which creates an
obligation to do or not to do a particular thing
• Principal purpose is to acquire property or
services for direct benefit or use of the
sponsor
• Generally sponsor conceived project
7
What Is a Cooperative
Agreement?
• A “financial assistance mechanism” to
transfer funds to recipient to
accomplish a public purpose
• Used when agency anticipates
substantial involvement between
sponsor and recipient during
performance of activity
8
Basic Types of Agreements*
BASIC PURPOSE
GRANT
Provide assistance
with few restrictions
COOPERATIVE AGREEMENT
CONTRACT
Provide assistance with substantial Procure tangible
involvement between parties
goods and services
SOLICITATION METHOD Application kit or
guidelines
Request for Application
Request for Proposal or
Quote
AWARD INSTRUMENT
Short, may refer to
general conditions
Describes involvement, party
relationships
INVOLVEMENT
BY SPONSOR
Generally none
Substantial involvement
Long, detailed specs,
clauses, regulations, and
expected result
May be extensive
REBUDGETING
Flexible
Usually flexible
More restrictive
EQUIPMENT TITLE
Grantee
Varies
Varies
PERFORMANCE PERIOD Specified in Grant
Specified in Coop. Agreement
Specified in Contract
PATENT RIGHTS
Usually favor USC
Usually favor USC
Usually favor USC
PUBLICATIONS
May ask to be informed
May ask to be informed
review/approval
Maybe prior
TECHNICAL
Annual summary report
Frequent reports
Detailed, maybe monthly
9
*From NCURA Presentation dated April 2002
Applicable Federal Regulations
OMB Circular A-21





Defines appropriate cost principles for
educational institutions
Defines allowable costs
Describes what costs can be included in
the F&A rate
Prescribes methods to distribute F&A costs
to various functions of the University (e.g.,
instruction, research, other activities)
Determination and Application of F&A rates
10
Applicable Federal Regulations
• OMB circular A-110 (applies to
grants only)

Relates primarily to administrative
requirements that apply to sponsored
projects
–
Financial systems and financial
reporting
– Procurement standards
– Property systems
11
Preparation of the Proposal
12
What Is a Proposal?
• A set of documents containing a
descriptive narrative of an idea and a
budget to be submitted to a potential
funding agency as a formal request for
sponsored support
13
PI Has an Idea for a Research
Project -- Who Can Help?
• Call Contracts and Grants for:
 Assistance with possible sponsors
 Copies of appropriate forms
 All proposals (other than privately funded
research at KSOM) are submitted through
Contracts and Grants
 All agreements negotiated by Contracts
and Grants [with investigator involvement]
 www.usc.edu/dept/contracts
14
Commonly Used Application
Forms
• National Institutes of Health Form 398
(revised in November 2004)
 http://grants1.nih.gov/grants/forms.htm
• National Science Foundation
 https://www.fastlane.nsf.gov/fastlane.jsp
• Contracts and Grants website lists additional
sites
 http://www.usc.edu/dept/contracts/pro_prep.htm
ALWAYS CONFIRM WITH CONTRACTS AND
GRANTS OR SPONSOR THAT YOU ARE
USING THE MOST CURRENT APPLICATION!
15
16
What Is Included in a Formal
Proposal?
•
•
•
•
•
•
•
•
•
Title page with appropriate signatures
Abstract (less than one page)
Key personnel and performance site(s)
Detailed budget with justification
Biographical sketches
Research plan/statement of work
Facilities/resources statement
Checklist
Appendices (as needed)
Always use forms and format
required by sponsor
17
What Is in a Proposal Budget?
• Salaries and Wages
• Fringe benefits
• Materials and Supplies
• Equipment
• Travel
• Cost Sharing
• Subcontracts and
Consultants
• F & A (indirect costs)
• Other
18
Proposal Budget
• Salaries and wages
 Base salary
 Merit based increases
 NIH salary cap
 Faculty overload
19
Proposal Budget
• Base salary
 Annual compensation that USC pays for an
individual’s appointment, whether time is
spent on research, teaching, patient care, or
other activities
 At USC, does not include private practice paid
through faculty practice plan corporations
 Government salary support calculated based
on base salary
20
Salary rates for faculty
members – OMB Circular A-21
• Charges for work performed on sponsored
agreements by faculty members during the
academic year will be based on the individual
faculty member’s regular compensation for the
continuous period which, under the policy of the
institution concerned, constitutes the basis of his
salary. Charges for work performed on sponsored
agreements during all or any portion of such period
are allowable at the base salary rate. In no event
will charges to sponsored agreements, irrespective
of the basis of computation, exceed the
proportionate share of the base salary for that
21
period.
Proposal Budget
• Merit based increases
 OMB circular A-21 requires that federal funds be
treated consistently with USC funds
 Government will only pay the same rate of
compensation as USC pays or less if NIH cap is
applicable
 USC is required to use government grant funds
to replace a percentage of university salary
support, not supplement it
 Faculty members may receive increases in
compensation based on merit, which would be
reflected in revised base salary
22
Proposal Budget
• Impermissible scenarios
 University A will pay Dr. Smith $50,000 for base
salary, but if Dr. Smith is funded by the
government to perform similar duties, Dr.
Smith can charge his base salary as $100,000
 University B will pay Dr. Jones $25,000 base
salary, but if she obtains an NIH grant, she will
be paid $75,000
23
Proposal Budget
•
Salary cap (applies only to NIH projects)
• Salary charged to NIH sponsored projects may not
•
•
•
•
exceed executive level I of the federal executive pay
scale
Effective January 1, 2004: $175,700
(http://grants2.nih.gov/grants/policy/salcap_summary.ht
m)
NIH salary cap applies to the institutional base salary
Effort reports must reflect compensation within the
salary cap on NIH-funded projects
Current executive level I of the federal executive pay
scale can be found at:
http://grants.nih.gov/grants/guide/index.html
24
NIH Salary Cap - Example
• Dr. Jones is the principal investigator on one
NIH sponsored project, which was awarded
on March 1, 2003. The project takes 25% of
her effort. The rest of her responsibilities are
divided between teaching and administration.
Her base salary from the university is
$200,000. How much can be charged to the
NIH grant? What are some of the issues that
may arise in this example?
25
NIH Salary Cap - Answer
• Compensation charged to the federal
grant is 25% of 2004 rate of $175,700
= $43,925
• Government considers $7,025 overage
to be cost sharing (200,000 base salary x
25% effort - 43,925 salary that can be
charged to grant = $6,075 overage)
26
Proposal Budget
• Faculty overload
• Generally, charges for work performed on
sponsored projects are only allowable
based on the faculty member’s base
salary rate. However, in unusual cases
where consultation is across departmental
lines, charges for such work representing
compensation above the base/core salary
(called faculty overload) are allowable, but
only with prior agency approval.
27
Proposal Budget
• Fringe benefits
 Proposals to federal sponsors must include
fringe benefit rate at university negotiated rate
on all salaries except:
 Graduate research assistants
 Enrolled student workers
 Proposals to non-federal sponsors must
include fringe rate on all salaries
 Current fringe rate can be found at:
www.usc.edu/dept/contracts/rates.htm
28
Proposal Budget
• Materials and supplies
 Itemize project supplies in separate
categories, such as glassware, chemicals,
radioisotopes, etc.
29
Proposal Budget
• Equipment
 Tangible personal property
 Useful life of more than one year
 Acquisition cost of $5000 or greater
 Example: $2500 computer purchased for project
should be categorized under materials and
supplies, not equipment
 See USC equipment manual
www.usc.edu/dept/finserv/equipment_management
30
Proposal Budget
• Travel
 Adhere to institutional policy and agency
guidelines
 Distinguish between domestic and foreign
travel
 If foreign travel is sponsored by the federal
government, use federal international per diem
rates
 Fly American Act
 See USC expenditure manual
31
Proposal Budget
• Cost Sharing
 Defined in OMB Circular A-110
 Costs contributed by faculty members
and/or the institution to support the
performance of federal research
 Costs used to satisfy cost sharing
requirements are subject to the same
rules governing other costs (i.e.,
allowable, allocable, reasonable,
consistently treated)
32
Common Cost Sharing
Practices
• Most cost sharing is accomplished through
the provision of effort compensated by USC,
not the grant
• Cost sharing also can include:
 Materials and supplies or equipment

Value assessed must be reasonable and at fair
market value
 Forgone indirect costs
 Tuition remission (e.g., for graduate students
providing research-related services on grant)
33
Types of Cost Sharing
• Voluntary committed cost sharing
 Could be required by sponsor (e.g.,
mandatory cost sharing); Or
 Could be voluntarily written into
proposal by investigator and
approved by institution
• Example: investigator budgets for
only portion of effort that
investigator plans to devote to
project
34
Types of Cost Sharing
• NSF no longer requires cost sharing
 Effective October, 2004, the NSF no
longer requires cost sharing on
solicited research
 The NSF formerly was the only
federal agency that required cost
sharing beyond the 1 percent
required by statute
 Universities still have to provide 1
percent of the research-grant amount
on unsolicited projects
35
Types of Cost Sharing
• Post-award cost sharing
 Effort is committed and budgeted in a
sponsored agreement, actually
provided, but not charged.
• Example: Investigator commits to
and budgets for 30% effort,
actually devotes 30% effort, but
only charges grant for 20% of his
or her effort. This is post-award
cost sharing.
36
Types of Cost Sharing
• Voluntary uncommitted cost sharing


Cost sharing not initially promised in proposal
or otherwise
Example: investigator proposes to devote 25%
of effort to grant but actually devotes 35% of
effort
• 10% of effort is uncommitted cost sharing
• If investigator has $100,000 salary, investigator
provided $10,000 worth of service at no cost to
the grant (i.e., to be paid by the school from
unrestricted funds)
37
Institutional Impact of
Cost Sharing
• Voluntary committed cost sharing included in
institution’s organized research base (e.g.,
The denominator of the fraction which defines
our indirect cost rate)
• Tends to reduce institutional F&A rate
• Institutions required to document
voluntary committed and post-award
cost sharing
38
OMB Memorandum
(January 2001)
• Clarified that institutions may treat
voluntary uncommitted cost sharing
different from committed
 Uncommitted cost sharing should not be
included in organized research base for
F&A purposes
 Uncommitted cost sharing does not need
to be tracked by institution (excluded
from effort reporting)
39
What Does This Mean for
USC?
• Investigator with $100,000 salary and 10% of
effort in voluntary committed cost sharing,
means:
 $10,000 of service provided to project without
compensation
 Inclusion of $10,000 in USC’s organized
research base
 Reduction in USC’s F&A rate
• Additional documentation requirements
 Institutions required to document committed
cost sharing
40
How Cost Sharing Works
at USC
All voluntary committed cost sharing
must be documented!
41
Ways to Document at USC
•
In a separate companion unrestricted
account
•
•
•
Cost sharing account will mirror the account
number of the project (except the first two
digits will reflect an unrestricted account)
• 53-4515-0001 = sponsored project
account
• 12-4515-0001 = cost-sharing account
By a separate object code designation
Forgone Indirect Costs and Tuition
Remission tracked automatically by
Sponsored Projects Accounting
42
How Cost Sharing Works
at USC
• Investigator proposes cost sharing in
budget and includes on proposal
approval record (PAR)
 Useful for administrator to know when cost
sharing included in proposal and budget
43
How Cost Sharing Works
at USC
 Cost sharing approval process:
Dean
Chair
Principal investigator(s)
COST SHARING IS A DEAN’S DECISION
44
How Cost Sharing Works
at USC
• If sponsor awards proposal, Contracts
and Grants will reflect cost sharing in
notice of award (NOA)
• Investigator & restricted fund accounting
notified of cost sharing via separate
memorandum
• Comptroller’s office establishes
separate 12 account and notifies
department senior business officer
45
How Cost Sharing Works
at USC
• If cost sharing relates to faculty effort, payroll
needs to be established in 12 account
• Cost sharing expenses (payroll or otherwise)
should be paid from this account [other than
indirect costs or tuition remission]
• Department/unit requests budget modification
to transfer funds to cost sharing account
46
Cost Sharing at USC
• Ways to cost share that do not add to
USC’s organized research base:
 Forgone indirect costs (requires dean
approval)
 Tuition remission
47
Real Problems With Cost
Sharing
• NYU - $15.5 million settlement to
resolve charges that it submitted false
information to obtain inflated
reimbursements for indirect cost rates
negotiated between 1982 – 1993
• Settlement included penalties for failing
to report the extent to which faculty
members donated time on research
studies
48
Subcontracts
 Subcontractor must sign subcontract




agreement that includes detailed
statement of work
Contracts and Grants will prepare and
issue subcontracts
Subcontracts must contain certain flowdown provisions
Requests for subcontracts should be
submitted to Contracts and Grants with
purchase requisition
PIs must monitor sub-awardees to
ensure compliance with award terms
49
Subcontracts
• Per OMB Circular A-21, grantee only pays
F&A (indirect) costs on 1st $25,000 of
subcontract for the life of the subcontract
• USC has established separate object codes
to for:
 1st $25,000 of subcontract
 Remaining amounts of subcontract
• Example: $300,000 subcontract ($100,000
for each year)
 1st year: $25,000 has indirect charge; $75,000
has no indirect costs
 2nd & 3rd years: No indirect costs charged
50
Subcontracts
• USC and investigator have duty to
monitor subcontractor
 Investigator duties include:
 Confirmation that subcontractor is performing in
accordance with statement of work
 Invoices submitted are reasonable, allocable
and allowable to project
 General management and oversight of
subcontractor
51
Consortium Agreements
(NIH Only)
• A collaborative agreement in support of
a research project in which some
portion of the programmatic activity is
carried out through a formalized
agreement between the grantee and
another separate legal entity
52
Consultants/Independent
Contractors
• An independent contractor is an
individual (or organization) that provides
professional advice or service to
another organization for a fee
• An independent contractor agreement
must be completed before a consultant
starts to perform the service
53
Consultants/Independent
Contractors
• Two forms to be used:
 Short form



One time service providers who are
individuals who can be paid via check
request
The payment for service does not exceed
$2,500 and
Frequency of pay does not exceed 3 times
in a calendar year
54
Consultants/Independent
Contractors
• Long Form Agreement, which includes
 Supplier information form must be included
 Liability insurance
 Manner, time and location
 Proprietary information
 Intellectual property
 Indemnification
 Conflict of interest
 Assignment
 Arbitration: governing law
 Contractor acknowledgment
 IRS Checklist
55
Consultants/Independent
Contractors
• A purchase order needs to be
established for the the service(s)
performed
 Paperless orders CANNOT be issued for
independent contractors
• The contractor submits invoices for
payment
56
Consultants/Independent
Contractors
• Invoice requirements
 Must be billed to USC
 Must have a purchase order number
 Must have vendor name and remit address
 Must have an invoice number
 Must have an invoice date
 Must have amount to be paid

Partial or final
57
Faculty Consultants – OMB
Circular A-21
• Since intra-university consulting is assumed to be
undertaken as a university obligation requiring no
compensation in addition to full-time base salary, the
principle also applies to faculty members who function as
consultants or otherwise contribute to a sponsored
agreement conducted by another faculty member of the
same institution.
• In unusual cases where consultation is across departmental
lines or involves a separate or remote operation, and the
work performed by the consultant is in addition to his
regular departmental load, any charges for such work
representing extra compensation above the base salary are
allowable provided that such consulting arrangements are
specifically provided for in the agreement or approved in
58
writing by the sponsoring agency.
Small Business Development
• USC must make positive efforts to use small
business, minority-owned firms, and women’s
business enterprises as sources of goods
and services whenever possible
• USC’s small business development office
assists academic and research units in
developing goals to use small business,
minority-owned firms, and women’s business
enterprises in connection with research and
service proposals
59
Proposal Budget Example*
PERSONNEL
Salaries & Wages
Amount
Principal Investigator, Josiah Carberry ($96,000 annual)
25% effort, 9 months
$18,000
100% effort, 2 summer months
16,000
Data Assistant, Mary Smith ($40,000 annual)
75% effort, 12 months
30,000
Graduate Research Assistant, To be named ($46,200 annual)
50% effort, 11 months
21,175
Subtotal Salaries & Wages
$85,175
S&W Subject to Fringe Benefits ($85,175 - 21,175 = $64,000)
Fringe Benefits @ 30% (Negotiated rate beginning 07/01/2003) 19,200
SUBTOTAL PERSONNEL
$104,375
*Budget for Year-01 of grant beginning 07/01/2003
60
Proposal Budget (cont.)
EQUIPMENT
Textronics Model 1245 Recorder
SUBTOTAL EQUIPMENT
Amount
$25,000
$25,000
MATERIALS & SUPPLIES
Data Recorder Packs (20 X $150)
Recorder Disks (5,000 X $2)
SUBTOTAL MATERIALS & SUPPLIES
$3,000
10,000
$13,000
TRAVEL
Domestic Travel to confer with Collaborator
Domestic Travel to Scientific Meeting
SUBTOTAL TRAVEL
$1,500
1,500
$3,000
61
Proposal Budget (cont.)
OTHER EXPENSES
Graduate Student Tuition ( 12 Units X $989/Unit)
Graduate Student Health Insurance
Publication Costs
Computer Costs
SUBTOTAL OTHER EXPENSES
$11,868
785
800
1,200
$14,653
SUBCONTRACTS
Direct Costs - University of Oklahoma
F&A @ 52%
SUBTOTAL SUBCONTRACTS
Amount
$66,000
$34,320
$100,320
TOTAL DIRECT COSTS
$260,348
FACILITIES & ADMINISTRATIVE COSTS
On Campus Research @62% MTDC ($148,160)
$91,859
62
MTDC Base Calculations
MODIFIED TOTAL DIRECT COST (MTDC) BASE*
Total Direct Costs
less Equipment
less Tuition
less Subcontract >$25,000 ($100,320-$25,000)
MTDC Base
Amount
$260,348
-$25,000
-$11,868
-$75,320
$148,160
*Exclusions: alterations or construction, equipment, patient care,
scholarships or fellowships, space rental or lease, subcontracts >$25,000,
and tuition
TOTAL DIRECT COSTS - FIRST YEAR
FACILITIES & ADMINISTRATIVE COSTS - FIRST YEAR
On Campus Research @62% of MTDC
TOTAL PROJECT BUDGET - FIRST YEAR
$260,348
$91,859
$352,207
63
Budget: Helpful Reminders
•
•
•
•
•
Include only allowable costs
Should be detailed (at least in first year)
As required, include cost-sharing
Include both direct and F&A costs
Review the Contracts and Grants
webpage and the Sponsored Projects
Manual for assistance
 www.usc.edu/dept/contracts
**Remember: be consistent with sponsor
and university
policies and requirements
64
What USC approvals are
necessary before
submission?
• Regulatory Approvals
 Institutional Review Board (IRB)
 Institutional Animal Care & Use Committee
(IACUC)
 Institutional Biosafety Committee (IBC)
 Radiation Safety Committee
• Institutional Approvals
65
Research Involving Human
Subjects
• All proposals involving human subjects must be
reviewed and approved by an USC Institutional
Review Board (IRB)
• An IRB is a statutorily mandated independent
committee charged with reviewing and approving
all proposals involving human subjects in research
 45 CFR 46 (The Common Rule)
• Biomedical research protocols should be submitted
to the Health Sciences Campus IRB office
• Behavioral research protocols should be
submitted to the University Park Campus IRB
office
66
Does your project involve
research with human subjects?
• Does it involve research?
 Research means a systematic investigation, including
research development, testing and evaluation, designed to
develop or contribute to generalizable knowledge. Activities
which meet this definition constitute research whether or not
they are conducted or supported under a program which is
considered research for other purposes. For example, some
demonstration and service programs may include research
activities.
• Does it involve human subjects?
 Human subject means a living individual about whom an
investigator (whether professional or student) conducting
research obtains

(1) data through intervention or interaction with the individual,
or
(2) identifiable private information.[For example, medical
record reviews, surveys or observational research]
67
Does your project involve
research with human
subjects?
• If you responded yes to these
questions, then you must obtain IRB
approval of the project or an IRB Claim
of Exemption before you will be given a
USC research account number. IRB
applications or claims for exemption can
be obtained by the appropriate IRB
office.
68
Research Involving Human
Subjects
• “Key personnel” on NIH grants must
complete USC’s education program
regarding protection of human
subjects
• Contact USC’s IRB offices or Office of
Compliance for further information
• HSC IRBs: http://ccnt.hsc.usc.edu/irb/irb.html
• UPC IRB: www.usc.edu/admin/provost/irb
69
Research Involving Animals
• All proposals involving animals must be reviewed
•
•
•
•
and approved by the Institutional Animal Care
and Use Committee
Each proposal requires separate approval by
IACUC even though the same protocol may be
used in several proposals
NIH permits “just in time” verification
 IACUC review and approval necessary only
after protocol peer reviewed by agency
All Investigators and staff using animals in
research must be trained by the Animal Services
staff before being permitted to order animals
Contact Animal Services for further information
70
Conflict of Interest in Research
• Situations in which financial or other personal
considerations compromise, or have the
appearance of directly and significantly
compromising an individual’s professional
judgment in proposing, conducting or reporting
research.
• Investigators are required to disclose “significant
financial interests to the Conflict of Interest
Committee for review and management
• Investigators must certify on the Proposal
Approval Record that they have read the
Conflict of Interest policy and have disclosed
71
conflicts that meet the policy definition
Other Regulatory Approvals
• Use of radiological materials
 Requires approval from the radiation safety
committee
 http://srm.usc.edu/rpo
• Use of recombinant DNA and biological
materials
 Both requires approval from the Institutional
Biosafety Committee
 http://srm.usc.edu/Safety_Dept_Web/main/
index.htm
72
USC Proposal Approval Tree
Contracts and Grants
Dean
Chair
Division Chief (KSOM)
Principal Investigator(s)
73
USC Proposal Approval Tree
Make sure to leave
sufficient time before
the proposal deadline
to obtain the
necessary signatures!
74
Proposal Approval Record
(PAR)
• All sponsored projects submitted
through Contracts and Grants must
include a PAR
• PAR forms can be downloaded from:
www.usc.edu/dept/contracts/int_proc.html
75
Proposal Approval Record
• Internal review checklist
 Space needs
 Renovation requirements
 Cost sharing/matching
 Appropriate regulatory review (e.g., animals, human




subjects)
Conflict of interest policy
F&A costs (confirm that correct rates are used)
Fringe benefits (confirm that correct rates are used)
Necessary signatory approval (chair, dean, division chief)
76
Proposal Approval Record
• E-PAR
 Online Proposal Approval Record
 Can be saved and copied for future use
 Automatically calculates fringe and F&A rates
 Drop-down boxes assist PIs/Staff in completing
necessary information
 Links to additional guidance
 E-Par is located at:
http://www.usc.edu/dept/contracts/int_proc.htm
77
Advance Funding
• Purpose of the Concepts
• To provide a mechanism whereby the PI may
legitimately incur costs prior to the University
receiving an award.
• Eliminate the inducement to improperly
charge costs to an ongoing unrelated award
(affectionately referred to as the grant-of-the-month
allocation process)
78
Pre-award Costs
vs.
Advanced Funding
• Pre-award costs
• Advanced funding
• Must be authorized by • USC internal process
sponsor
• Expenditures prior to
• Permits expenditures
award date not
90 days prior to award
allowed
• Subject to dean’s
• Subject to dean’s
authorization
authorization
• Dean’s account at risk • Dean’s account at risk
until award is
until award is received
received
79
c
• Usually used when an award is late
• The costs must be incurred after the official award
•
•
•
•
•
date
Usually authorizes 30-60 days of costs.
The PI submits the request, including a budget
and justification, to Contracts & Grants through the
Dean’s office
Contracts & Grants contacts the sponsor to
determine the status of the award, the estimated
date of award and the amount
This is an internal mechanism and does not
require sponsor approval
May be used for federal or non-federal awards 80
Pre-Award Costs
• Authorized by policies of federal granting agencies
• Costs may be incurred up to 90 days before the official
•
•
•
•
•
start date of the award
There must be a programmatic justification to incur Preaward costs
The same process is used as for Advance Funding
The amounts, types of costs and period must be
specifically authorized in writing by the Contracting Officer
Pre-contract costs are usually memorialized by letter from
the CO and will be included in the subsequent terms of the
contract
The costs are incurred at the risk of the University until
the award is finalized
81
Recruiting/Hiring
• USC’s template job descriptions should be used to fill
•
•
•
•
university positions, which could be tailored using the
addendum form. The generic job descriptions and addenda
forms can be downloaded at:
www.usc.edu/dept/personnel/comp/
All staff positions (except Grade 99) must be posted through
Employee Recruitment Services for at least five (5) days
Candidate applications for open staff positions must be
submitted online through Employee Recruitment Services
(ERS) at: www.usc.edu/bus-affairs/ers/
ERS will screen applicants to determine if they meet
minimum qualifications prior to forwarding applications to
departmental hiring authority
Prior to being extended an offer of employment, the
university will conduct a background check on all final
82
candidates
Principal Investigator/Program Director
Assurance
[each government agency requires the following
assurance]:
“I certify that the statements herein are true,
complete and accurate to the best of my
knowledge. I am aware that any false, fictitious,
or fraudulent statements or claims may subject
me to criminal, civil, or administrative penalties.
I agree to accept responsibility for the scientific
conduct of the project and to provide the
required progress reports if a grant is awarded
as a result of this application.”
83
Other Certifications
• When USC and Investigator submit a proposal
to a federal agency, we generally are required
to certify that we are in compliance with the
following:









Human subjects
Research using human embryonic stem cells
Research on transplantation of human fetal tissue
Women and minority inclusion policy
Inclusion of children policy
Vertebrate animals
Debarment and suspension
Drug- free workplace
Lobbying Restrictions
84
Other Certifications (cont.)
• Financial conflict of interest policy
• Non-delinquency on federal debt
• Research misconduct policy
• Disability regulations
• Sex discrimination regulations
• Age discrimination regulations
• Recombinant DNA and human gene transfer
regulations
85
Administering the Award
86
What Happens When the
Award Comes
• Notice of Award (NOA)
 Contracts and Grants generated document
 Contains a summary of the terms and
conditions of the award
 IT IS IMPORTANT TO REVIEW THIS
DOCUMENT AND MAINTAIN A COPY
IN YOUR FILES
87
What Happens When the
Award Comes
Establishment of an account
• Contracts and Grants establishes account
• PI can’t charge costs against award until
account established
• Account numbers assigned to account have
specific meanings
• Cost sharing account is established
(if applicable)
88
Different Types of Accounts
• “5” Accounts – Represents
Sponsored Project Accounts
 “52” Account – Training/Education
 “53” Account -- Research
• “2” Accounts – Gift Accounts
89
Master/Satellite Accounts
• Master Account – USC Generated
 Primary Account for Award
 All Funds Reside Here Initially
 Middle Four Digits of Account Number = PI’s
Department Number as identified in financial
system (i.e., not home department number)
• Satellite Account – USC Generated
 Sub-Account of Master
 Purpose: To restrict funds to department or
for specific expenditures
90
What Are the Rules for Charging
Expenses to the Award?
• OMB Circular A-21
 Defines appropriate cost principles for
educational institutions
 Defines allowable costs
• Other Resources
 NIH Grant Policy Statement
http://grants1.nih.gov/grants/policy/nihgps_2003/index.
htm
 USC Sponsored Projects Manual
http://www.usc.edu/dept/contracts/comply.htm
 Other Sponsor Manuals
91
What Is an Appropriate Cost?
• Costs are REIMBURSABLE by the federal
government only if they are:
 ALLOWABLE: Cost is in compliance with the
terms and conditions of the award, sponsoring
agency policy and university policy.
 REASONABLE: There is a reasonable and
prudent basis to have purchased a particular
item at a particular price; and
 ALLOCABLE: Costs directly benefit specific
project to which they are charged; and
 CONSISTENTLY TREATED: Similar costs are
treated the same in like circumstances, as
either direct or F&A costs
92
What Is an Unallowable
Cost?
• OMB Circular A-21 and federal regulations as
well as sponsor guidelines specify certain
costs as unallowable, e.g., alcohol, flowers,
gifts
• Check with your DCG Administrator to
confirm what is allowable or unallowable on
your sponsored project
93
General Unallowable Costs*
Unallowable Activities
• Organized fund raising
• Lobbying
• Commencement &
convocation
• General public relations
& alumni activities
• Student activities
• Managing investments
solely to enhance
income
*NCURA presentation, dated April 2002
Unallowable Transactions
•
•
•
•
•
•
•
•
•
Advertising (Some Types
Allowed)
Alcoholic Beverages
Entertainment
First and Business Class
Travel Costs
Flowers
Memorabilia, Promotional
Materials
Moving Costs If Employee
Resigns Within Twelve
Months
Certain Recruitment Costs
Membership in Social, Dining
or Country Clubs
94
Allowable vs. Unallowable Costs*
• Meal expense, no documentation of business purpose
 Unallowable expense, insufficient documentation
• Travel expense of dean and non-employee spouse
 Dean’s expenses allowable, spouse unallowable
• Alcohol served at a business function
 Alcohol is unallowable
 Bartender is also unallowable (“directly associated
cost”)
• Membership in airline courtesy club
 Personal expense, unallowable expense
*NCURA presentation April 2002
95
What Is an Allocable Cost?
• Allocable direct costs:
 It is incurred solely to advance the work under the
sponsored agreement
 It benefits both the work under the sponsored
agreement and other work of the institution in
proportions that can be approximated
 If a cost benefits two or more interrelated projects in
proportions that cannot be determined the cost may be
allocable on any reasonable basis
• Allocable indirect costs:
 It is necessary for the overall operation of the
institution and conforms with the other principles
in A-21
96
Allocability of Costs*
• Travel by PI to conference (not related to specific
project)
 Not allocable (allowable) as direct charge to
sponsored award; May be allocable as F&A cost
• Salary of research technician
 Allocable (allowable) as direct cost, not as F&A
cost
• Salary of secretary typing exams
 Not allocable as direct charge to research project
or F&A cost
• Proposal preparation costs
 Not allocable as direct charge to sponsored
award, allocable as F&A costs
97
*NCURA presentation April 2002
Allocation methods to
distribute costs between
multiple projects
• Head count of employees charged to the
•
•
•
•
different projects
Square footage used by each project
Modified Total Direct Costs (MTDC) of each
project
Salaries and wages of each project
Consult with the Office of Financial Analysis
for assistance in developing appropriate
allocation method
98
Allocation methods to
distribute costs between
multiple projects
• PH et al., to assist in technical aspects
of distributing costs on multiple projects
• Explain how to do split requisitions
• Other aspects that should be
explained?
99
Direct Costs
• Those costs that can be identified specifically
with a particular sponsored project
• Examples include:








Salaries
Fringe benefits of project personnel
Materials and supplies
Travel
Consulting
Equipment
Long distance telephone costs
Animal care
100
Purchasing
• USC policy to obtain all supplies, equipment
•
•
•
•
and services at lowest cost consistent with
quality and availability of items at time of
purchase
Purchasing has contractual arrangements
with numerous vendors – consult with them
for list of vendors
All purchases over $5,000 require competitive
bid
Sole source contracts require appropriate
documentation to justify that no bids obtained
See purchasing manual at:
http://adminweb.usc.edu/purchasing/public
101
Equipment
• Belongs to USC or sponsor – not principal investigator
• Must be allowable expense and authorized by sponsor
prior to purchase
• When acquiring equipment, list on the requisition form
 Description
 Estimated cost, including tax
 Justification, particularly if “general purpose”
• All equipment must be inventoried by equipment
management
• Equipment management should be notified when
equipment re-located
• See USC equipment manual
www.usc.edu/dept/finserv/equipment_management
102
Travel
• Must be lowest
•
•
•
•
Comparable fare
Must further objectives of project
Appropriate documentation must be
submitted
Researchers urged to use USC designated
travel agencies
See USC expenditure manual
 http://policies.usc.edu
103
Travel
Fly American act
• Requires that U.S. Flagship carriers or
foreign carriers that operate under a U.S.
Carrier code-sharing agreement be used,
unless those carriers are certified as
“unavailable.”
• U.S. Air carrier service is considered
available even though:
 Comparable service can be provided at
less cost by a foreign air carrier
 Foreign air carrier is preferred or is
more convenient
104
Travel
• Reimbursement based on actual
expenses established through receipts
or applicable per diem amount.
• Unallowable costs must be borne by
USC (e.g., alcohol)
• See USC expenditure policy at:
http://policies.usc.edu
105
Travel – Per Diems
• Certain travel, particularly foreign travel, can
be reimbursed on a per diem basis
• Per diem payments require proof of travel but
not detailed receipts for certain expenses
• Proof of overnight stay (not to exceed 30
days) is required
• Per Diem rates can be found at:
 http://www.state.gove/m/a/als/prdm
106
Travel – USC Resources
• The Department of Travel Management Services
oversees the contracts between the university and its
travel vendors, including the university's designated
travel agencies, airlines, and rental car companies.
Travel Management Services is also responsible for
any Journal Voucher (JV) issues and is responsible
for the university's travel corporate card program.
• For questions regarding the university's travel
management program, please contact the
appropriate Travel Management Services
Representative or go to
http://adminweb.usc.edu/travel/
107
Travel – USC Resources
• New On-Line Booking Version
• A new version of USC On-Line Travel Service
as of March 17, 2003
 Searches in a single screen
 Web fares (e.g. ual.com, aa.com, orbitz.com,
expedia, jetblue.com, etc.)
 USC’s discounted / contract fares (United,
American, Northwest, etc.)
 Travel agency fares
 Cuts down on “surf” time
 Compares best rates, routes, and services
 Offers a lower service fee (tbd) than full service
108
Travel – USC Resources
• New TravelPlus Card /
WEBBA QuickExpense Report
• WEBBA Quick:
 Facilitates the itemizing of expenses


Through pop-up menus
Programmed rates for per diem, mileage, etc.
 Improves accuracy of submitted reports
 Via automated business rules
 Used for TravelPlus Card and other forms of
payment
 Allows for an unlimited number of account
allocations
109
Other Possible Direct Charges
• Graduate student (RA) tuition
• Graduate student (RA) health insurance
• Graduate student (RA) stipends
• These items must be budgeted in proposal
and approved by sponsor
• The amounts that can be direct charged are
determined on a school basis. Investigators
should contact their respective Senior
Business Officer for further guidance
110
Facilities and Administrative
(F&A) Costs (Formerly Known
As Indirect Costs)
•
Costs that are incurred for common or joint
objectives, and, therefore, cannot be identified
readily and specifically with a particular
sponsored project
•
Costs that are not directly charged to a grant
•
Comprised of facilities costs and administrative
costs
111
F&A Costs
Facilities costs:
• Building Depreciation (or Use Allowance)
• Equipment Depreciation (or Use Allowance)
• Operations and Maintenance (utilities,
maintenance, custodial costs, non-capital
improvements)
• Interest Expense (paid to external parties)
• Library (books, library facilities and library
administration)
112
F&A Costs
Administrative Costs:
• Departmental administration
 Dean’s office, dept administrative staff and
administrative work of faculty (including bid and
proposal preparation)
• General administration & general expense
 President office, financial services, compliance,
general counsel, personnel services, safety & risk
management, etc.
• Sponsored projects administration
 Contracts and Grants, sponsored projects accounting,
technology licensing office
• Student services
113
 Registrar, bursar, student health
F&A Costs
• Administrative Costs:
 Administrative costs are capped at 26% of
USC’s total administrative expenses
 Therefore, regardless of total costs, USC
can only recoup up to 26% of Modified
Total Direct Charges (MTDC)
114
F&A Costs – How Are They
Calculated at USC?
• Facilities: 36% MTDC
 Building Depreciation
 Equipment Depreciation
 Interest Expense
 Operations and Maintenance
 Libraries
• Administration: Capped at 26% MTDC
 Sponsored Projects Administration

Contracts and Grants, Sponsored Projects Accounting, Financial
Analysis, etc.
 Departmental/School Administration
 General Administration

Payroll, Purchasing, central administration
 Student Services
115
F&A Costs – How Are They
Calculated at USC?
F&A (Indirect) Costs
---------------------- [divided by] = Indirect Cost Rate %
Modified Total
Direct Costs
[costs that are directly identified with on campus
Organized research, such as salaries, fringe benefits, M&S,
travel and other direct expenses)
116
F&A Costs – How Are They
Calculated at USC?
• Generally, all (F&A) indirect costs received by
USC are distributed directly to the schools as
current unrestricted income. The deans
determine how their respective share of
indirect costs are to allocated among their
units.
• For further information or assistance call the
Office of Financial Analysis at (213) 821-1937
117
Does the F&A Rate Cover All
Indirect Costs?
NO! Why?
• A-21 limits the recovery of certain costs (i.e.,
administrative costs) and prohibits others
• When an external sponsor pays less than the full
F&A rate, the unrecovered F&A costs must be
absorbed by the institution (e.g., USDA grants,
NIH Training grants)
• Cost sharing impacts F&A rate
• F&A costs are real costs, someone must pay
the bill!
118
Observation on the F&A
Process
“There will always be room to argue about the
allocation of costs between research and
instruction. That ambiguity is built into the
fabric of the university and cannot be
removed so long as research and teaching
are done in the same place by the same
people, a condition that describes every
research university.”
Dr. Robert Rosenswieg
COGR Paper: “The Politics of Indirect Cost” (1998)
119
Cost Transfer
• A Cost Transfer is Used to Record Entries to
Correct and Adjust Payroll and Non-Payroll
Transactions on Sponsored Agreements.
• Cost Transfers may only be processed by
Sponsored Projects Accounting.
120
Cost Transfer
• OMB A-21 Requirements Apply
 Allowability
 Allocability
 Reasonable
 Consistently Treated
121
Cost Transfer Procedures
• Cost transfers must be made within 90 days of
the original incurrence of the charges but no later
than 15 days after the termination date of the
budget period. Transfers made after the 90-day
period raise serious questions concerning the
propriety of the transfer.
• All cost transfers must be documented by an
adequate explanation that fully explains how the
error occurred and how the expense is related to
the account receiving the expense. Note: any
explanation that merely states a transfer is being
processed “to correct error” or “to transfer to
correct project” is not sufficient and will not be
accepted.
122
Cost Transfer
Non-Payroll Cost Transfer
 Provide Account Numbers,






Object Codes, ASR Dates,
Document Reference Numbers,
Expenditure card and
Authorized Signature
Support with ASR Transaction
Detail
Explain Why Expense was
Charged to Wrong Account
Explain How Expense is
Project Related
Provide a Reasonable
Explanation as to Why Request
is Over 90 Days from the Date
of Charge
Explain What Measures Have
been Taken to Ensure this Type
of Error or Delay Does Not
Occur in the Future
Provide Non-Sponsored
123
Account Number
Cost Transfer
Payroll Cost Transfer
 Address Percent of Effort
 Address Time Period of Effort
 Explain Why Expense was





Charged to Wrong Account
Identify Expense as Project
Related or Not to Account
Receiving the Expense
Identify Proper Certification
Provide a Reasonable
Explanation as to Why
Request is Over 90 Days from
the Date of Charge
Explain What Measures have
been Taken to Ensure this
Type of Error or Delay Does
Not Occur in the Future
Provide Non-Sponsored
Account Number
124
Effort Reporting
• Federal regulations require that USC
calculate the effort that investigators
and staff allocate to particular research
• USC reports effort by after the fact
certification
125
After the Fact Certification
• Salary Certification is a method that reasonably
confirms an individual’s time and effort as directly
related to charge on a sponsored agreement
• All salaries and wages charged to a sponsored project
must be certified monthly, after the expense has
posted to the ASR, by a person with first hand
knowledge and technical understanding of the activity
being performed on behalf of the project.
• Certification also includes addressing corrections and
adjustment if there are significant differences between
estimates and actual effort (+/- 5%)
126
Three Methods of After the
Fact Certification at USC
•
•
ASR
SPA Report by PI
 Exception to the monthly rule is ISI –
They have developed a computerized
system of effort reporting and
therefore are approved to do their
certifications quarterly
127
ASR Certification
128
SPA Report Certification
129
Issues with Effort Reporting
• Failure to sign certifications on a monthly basis
• Requesting a Cost Transfer after Certification has
•
•
•
•
•
been done
Signing certifications that reflect incorrect effort
on project
Exceeding the NIH Salary Cap
Overstatement of actual effort
Understatement of actual effort
Failure to adjust effort reports to reflect actual
effort
130
Issues with Effort Reporting
• Several peer institutions have paid significant
fines and penalties for alleged effort reporting
irregularities
 Northwestern: $5.5 million in fines for alleged
overbilling of researchers’ salaries
 Harvard: $3.3 million in fines to resolve accusations
that a researcher worked fewer hours than promised
on a study
 Johns Hopkins: $2.6 million in fines to settle claims
that researchers knowingly overstated time spent on a
study
131
Important Points
• Compensation may be authorized
based on estimates before service is
performed
• Compensation must be directly related
to effort
• 100% effort is 100% of a faculty or
staff member’s professional effort at
USC. This includes teaching,
committee time, research, clinical
service, office hours, administrative
time, etc.
132
Important Points
• Charges must be adjusted if there
are significant differences between
estimates and actual effort
• All sponsored compensation
must be confirmed after the fact
• PI is ultimately responsible
133
REMEMBER!
• Salary tends to be the largest budget
item in most grants and contracts and
must be handled with the greatest of
care. If you have questions refer to the
Sponsored Projects Manual, OMB
Circular A-21 or call your Contract &
Grant Administrator.
134
Overdrafts
• Overdrafts
 Expenditures that exceed the budgeted
amount
 Generally occur at the end of a budget period
when funds are low
• Overdraft Responsibility
 PI is generally responsible for the payment of
overdrafts
 If PI cannot cover the overdraft, PI’s school
generally is required to fund the overdraft
• To avoid overdrafts, PIs should monitor
and reconcile their accounts on a regular
basis
135
Program Income
• Gross income earned by a grantee that is
directly generated by the grant supported
project or activity or earned as a result of the
award (other than income resulting from
royalties or licensing fees)
• Amount earned and expended must be
reported on the financial status report
• Costs associated with generation of program
income should be deducted and “net”
program income should be reported
136
Issues with Program Income
– University of Minnesota
• Experimental drug manufactured and sold out
•
•
•
•
of department of University of Minnesota
without FDA clearance
The research study relating to the
experimental drug and the manufacturing
operation partially funded with NIH funds
Drug program earned over $80 million
Income never reported to NIH so that NIH
could adjust grant amount
Whistleblower lawsuit involving this charge
and others resulted in $32 million settlement
137
Account Status Report
(ASR)
• Contains four sections
 Summary of Account Status
 Transaction Detail
 Budget Transaction Detail
 Report of Open Encumbrances, Commitments
and Liens
• Three detail sections provide more
information about the columns on the
summary page
• ASRs and other financial information can
be obtained through WEBBA at:
 https://ais.usc.edu
138
Summary of Account Status
TOTAL
CURRENT
CUMULATIVE COMMITMENTS
BUDGET
OBJECT DESCRIPTION
BUDGET
EXP/REV
EXP/REV /OPEN LIENS
BALANCE
------ ----------- ----------- ----------- ----------- ----------- ----------10100 INDIRECT CO
10,105
1,982
1,982
****** TOTAL 10
11000 SAL/SUB/FB
11220 FAC RSCH SU
11700 N/E STAFF B
****** TOTAL 11
13100 FB CHGS/EXE
****** TOTAL 13
14600 RA SALARIES
****** TOTAL 14
15100 GEN/PROJECT
10,105
1,982
1,982
1,101
134
1,101
134
5,796
1,235
1,235
1,566
333
333
1,566
333
333
4,805
1,602
1,602
4,805
1,602
1,602
8,123
5,796
4,561
1,233
3,203
3,000
****** TOTAL 15
3,000
18100 DOM TRAV
1,000
****** TOTAL 18
1,000
3,000
1,000
**** TOTAL EXPENSE
26,272
5,152
5,152
21,120
****** ACCOUNT TOT
26,272
5,152
5,152
21,120
139
Column Headings - Summary
1. Object (Code)
2. Description
3. Total Budget
4. Current Exp/Rev
1. Categorizes the budget
2.
3.
5. Cumulative Exp/Rev 4.
6. Commitments/Open
Liens
7. Budget Balance
5.
6.
7.
and the transactions
The title for the object
code
The current budget for
the project
The transactions for that
month
The total transactions for
the project
Funds set aside for PO’s
or salaries
The budget minus the
cumulative expenses and
140
liens.
How to Read the Summary
• Object codes are “line items” in your budget
• Descriptions are similar to the line items in
your project budget. Those are your
restrictions.
• Budget object codes are general, and
expense object codes are more specific.
• The subtotals by object class include all
budget and expenses/ revenue in that group
of object codes.
• Read the subtotal line to find out how much is
left for your use for that budgeted line item.
141
What Can I Spend?
• Must stay within the object class on most
•
•
•
•
accounts (see subtotals)
Cannot spend indirect cost budget. That
represents the F&A costs.
Need budget changes to move budget
between object classes.
What budget changes can be made depends
upon terms of contract or grant.
Account total less indirect costs is total
available to spend.
142
What Do Liens Do to My
Budget?
• Three types of liens:
 Salary Liens (permanent payroll)
 Encumbrances (Purchase Orders)
 Service Center Liens (Internal Requisitions)
• Funds are still in account, but are promised
• Liens can sometimes be changed
• Reduce liens, funds become available again,
unless reduced by payment.
143
Can I Make Budget Changes?
• You must refer to the requirements of
your contract or grant for rules
• Budget changes must be approved by
Contracts and Grants or SPA or through
the paperless SPA budget change
process (if applicable.)
• Budget changes are reflected in the
total budget column.
144
Can I Make Budget
Changes?
• When transferring funds from
equipment to salaries, the investigator
must include fringe benefit costs and
F&A (indirect costs) in calculations
• When transferring funds from salaries to
equipment, the grant will receive the
accompanying fringe benefits and
indirect cost charges as well
145
Transaction Detail – Part 2
TRANS JOUR TRAN DOCUMENT OR BATCH
TRANSACTION
DATE TYPE CODE REFERENCE NUMBR TRANSACTION DESCRIPTION
AMOUNT
----- ---- ---- ----------- ------ ----------------------------- -------------OBJECT CODE 10100
08/19 OH
OH
08/20 OH
OH
INDIRECT COSTS
08709C ADJ FISCAL YTD OV AT 62.50
08709A ADJ FISCAL YTD OV AT 62.50
******
TOTAL OBJECT CODE 10100
******
TOTAL OBJECT CLASS 10
OBJECT CODE 11220
08/31 PR
PR
******
FAC RSCH SUPP
08700 name of employee paid
TOTAL OBJECT CODE 11220
0.00
1,981.63
-------------1,981.63
1,981.63
1,100.65
-------------1,100.65
146
Column Headings –
Transaction Detail
1.
2.
3.
4.
5.
6.
7.
Date posted to account
Identifies transaction
source
More detail about type
of transaction
Number on document
Internal reference only
Vendor name, payee
name, or description of
journal voucher
7. Amount charged or
credited to the account
for that transaction
1.
Trans Date
2.
Jour Type
Trans Code
3.
Document or
4.
Reference
5.
Batch number
Transaction Description6.
Transaction Amount
147
I Want More Detail!
• Use code listings to identify the type of
transaction
• Use the budget administration system
inquiries for more information or ask
your budget administrator for assistance
148
Budget Transaction Detail – Pt 3
TRANS JOUR TRAN DOCUMENT OR BATCH
TRANSACTION
DATE TYPE CODE REFERENCE NUMBR TRANSACTION DESCRIPTION
AMOUNT
----- ---- ---- ----------- ------ ----------------------------- -------------OBJECT CODE 10100
INDIRECT COSTS
08/15 BCAF
9553 SPIS BUDGET CHANGE
134,482.00
08/15 BCAF
9554 SPIS BUDGET CHANGE
-19,688.00
08/15 BCAF
9555 SPIS BUDGET CHANGE
-21,698.00
08/15 BCAF
9556 SPIS BUDGET CHANGE
-21,003.00
08/15 BCAF
9557 SPIS BUDGET CHANGE
-17,373.00
08/15 BCAF
9558 SPIS BUDGET CHANGE
-27,547.00
08/15 BCAF
9560 SPIS BUDGET CHANGE
-17,068.00
-------------******
TOTAL OBJECT CODE 10100
10,105.00
******
TOTAL OBJECT CLASS 10
10,105.00
149
What Does That Tell Me?
• Journal type (Jour Type) tells you what kind of
•
•
•
•
budget change it was.
Use a reference list of codes to identify
Minus sign means the expense budget was
reduced
No minus sign means the expense budget
was increased
This example shows advanced funding
budget being transferred from master account
to other satellite accounts.
150
Report of Open
Encumbrances, Commitments
and Liens – Pt 4
PURCHASE REQUISIT
ENCUMBRANCE DISENCUMBRD ENCUMBERED
ORDER
NUMBER VENDOR/DESCRIPTION
AMOUNT
AMOUNT
BALANCE
-------- -------- ------------------------- ----------- ----------- ----------15140
LAB EXP
012367
17017R VENDOR NAME
3,261.17
3,261.17
0.00
014489
28237R VENDOR NAME
696.02
0.00
696.02
INVOICE 909018
0.00
600.00
----------- ----------- ----------PO BALANCE FORWARD
696.02
600.00
96.02
V02655
28426R VENDOR NAME
266.29
266.29
0.00
V13281
29156R VENDOR NAME
50.14
50.14
0.00
******
TOTAL OBJECT CODE 15140
4,273.62
4,177.60
96.02
151
Report of Open Encumbrances,
Commitments and Liens – Pt 4
• Shows all liens, except salary liens
• Summarized salary lien information available
on the “Summary of Account Status” page of
the ASR and further detail is available on the
“Payroll Labor Distribution” report.
• Purchase orders encumber funds when PO is
issued.
• Disencumbered means the lien was reduced
by payment of invoices or change order.
• Funds encumbered are still in the account,
152
but are not available to spend.
Reconciling the ASR
• The process of balancing your record of transactions to
•
•
•
•
•
what was actually posted, using the ASR as the tool.
Requires that you keep a log or other record of
transactions as they are generated (spreadsheet.)
Check off items as they clear, and compare amount
posted to your records.
Follow-up on discrepancies, delayed or missing items in
a timely manner.
For all payroll expenses and encumbrances, the payroll
labor distribution must be reconciled to the ASR each
month
Contact budget administrator or SPA for corrections, if
needed.
153
Where to Find More Info?
• Codes on the ASR give clues as to what kind of
•
•
•
•
transaction was posted.
Use kind of transaction to identify Budget
Administration System inquiry available with more
detail information about a transaction.
Use your own access to the BA system, or contact
budget administrator for assistance.
Further information can be found on the Financial
Services web page at:
www.usc.edu/dept/finserv/dirtrng
Please contact Financial Services or Professional
Development for information regarding their
training sessions
154
Closeout Process
• Purpose: to notify agency of research
completed, project results and
expenditures, equipment, inventions,
etc. . .
• Process:
 Generate reports
 Submit reports
 Record submission of reports
155
Reporting
• Progress/Technical Reports
 Interim Reports
 Final Reports
• Equipment Reports
• Invention Reports
• Financial Reports
156
Reporting
• What are possible consequences if
investigator fails to provide necessary reports
in a timely manner?
 Penalties depend on agency
 Some agencies will stop processing ALL USC
proposals until appropriate reports are submitted
 Some agencies will restrict further awards to
investigator
 Other agencies will not make final payment on
award until reports submitted
157
Intellectual Property
• Federal regulations require that intellectual
property derived from sponsored projects
must be disclosed to the Office of Technology
Licensing
• OTL reports federally-funded inventions to the
external sponsor, and as appropriate, will
grant non-exclusive, royalty free licenses for
government purposes
• USC’s Intellectual Property policy is at:
http://policies.usc.edu
158
Record Retention
• Federally-Sponsored Research
 Scientific Records/Research Data – 3 Years
from Submission of Final Expenditure Report
or 3 Years from Completion of Research,
Whichever is Longer
 Financial Information/Agreement
Records/Effort Certifications – 3 Years from
Submission of Final Expenditure Report
•
Privately-Sponsored Research

Use Federally-Sponsored Research
Retention Rules Above or Sponsor’s Rules,
Whichever are Longer
159
Federal Demonstration
Partnership
• Cooperative initiative among federal agencies
and institutional recipients of federal funds
• Intended to increase research productivity by
streamlining the administrative process and
minimizing the administrative burden on
principal investigators while maintaining
effective stewardship of federal funds
• Consists of a select group of federal
agencies and institutions (including USC)
• Institutions meet regularly to implement
uniform and consistent practices across
160
agencies
FDP Composition
• 65 university (including USC) and non-
profit research center members
• 11 federal agency members
• National Academy of Science's GUIRR
• 5 affiliate members (including COGR
and AAMC)
161
FDP Accomplishments
• 90-day pre-spending authority
• Institutionally approved no-cost
extensions
• Up to one additional year, and
automatic carryover of unobligated
funds from one budget period to the
next
162
Role of USC Internal Audit
• Conducts routine departmental and unit
audits
• Reviews compliance with USC business
processes, policies and procedures
• Confirms that internal controls exist to
assure day-to-day compliance with USC
and government requirements
163
What to Do If a Government
Auditor Contacts You?
• Before responding, call any of the following
immediately:
• Financial Analysis
• 213-821-1938
• Office of Compliance
• 213-740-8258
• Office of General Counsel
• 213-740-7922
• USC Help & Hotline
• 213-740-2500
164
Possible Consequences of
Non-compliance
• Audit (Internal or External)
 Requires your time and effort and the
university’s resources to audit and/or
respond to audit
• Repayment of sponsored funds
• Loss of grant funding
• Penalties/Fines
• Debarment
• Criminal Penalties
165
Risk of Non-Compliance
Johns Hopkins Research Suspended
After Death of Normal Volunteer
King/Drew Medical Research Suspended
V.A. Hospital Is Told
To Halt All Research
U. of Minnesota Pays $32Million to Settle Lawsuit
Over Research Funds
U.S. Halts Human
Research at Alabama
Stanford Embroiled in
Angry Controversy on
Overhead Charges
U. Penn Institute
Restricted After Gene
Therapy Death
NYU Pays U.S.
Millions to Settle
Charges Over
Research Costs
Ex-Professors Accused
of Taking $10-Million
in Research Funds at
Georgia
Ethics Lapses at Duke Halt
Dozens of Human Experiments
166
What USC Resources Exist
to Assist Principal
Investigators?
• Research administration at USC is a
partnership between researchers,
administrators and central
administrative departments
• See list of resources in binder
and on compliance webpage at:
www.usc.edu/compliance
167
Excerpt from USC Mission
“Research of the highest quality by our faculty
and students is fundamental to our mission.
USC is one of a very small number of premier
academic institutions in which research and
teaching are inextricably intertwined, and on
which the nation depends for a steady stream
of new knowledge, art, and technology. Our
faculty are not simply teachers of the works of
others, but active contributors to what is
taught, thought and practiced throughout the
world.”
168