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CHAPTER 1::: CHAPTER 2:: CHAPTER 3: CHAPTER 4: CHAPTER 5: CHAPTER 6: CHAPTER 7: CHAPTER 8: CHAPTER 9: CHAPTER 10: CHAPTER 11: CHAPTER 12: CHAPTER 13: CHAPTER 14: CHAPTER 15: CHAPTER 16: CHAPTER 17: CHAPTER 18: CHAPTER 19: CHAPTER 20: CHAPTER 21:
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8 Award Administration8.1 Sponsor-University RelationshipAwards for sponsored projects are made to The Trustees of the
ORS is responsible for submitting required financial reports and obtaining payment for sponsored projects. ORS, in cooperation with the principal investigator and the business administrator, is responsible for ensuring compliance with sponsor regulations and guidelines. The principal investigator is directly responsible
for performing the project within any administrative constraints
imposed by the sponsor and the University.
The principal investigator directs the technical aspects
of the project effort within the scope authorized by the sponsor
and authorizes any and all expenditures of project funds subject
to approval, where necessary, by ORS or the sponsor.
The principal criterion for assuring that costs charged
to a sponsored project are appropriate is that they benefit
the project. The principal investigator should meet with his/her
business administrator at the initiation of a project and monthly
during its course to assure proper fiscal management. The principal investigator is responsible for
the timely submission of all required technical or programmatic
reports (See Sponsored Projects Policies Nos. 2106 and
2127.) 8.2 Relevant Sponsored Projects PoliciesThe following Sponsored Projects Policies are of direct relevance to the administration of sponsored projects: 2101 Administration
of Sponsored Projects 2103 Administration of Clinical Trials 2107 Accounting
Authority & Responsibility 2108 Cost Accounting Standards (CAS) 2110 Federal
Direct Cost Expenditures 2112 Procurement
of Goods & Services 2116 Facilities
and Administrative (F&A) Costs 2119 Cost Sharing/Matching Requirements 2220 Accounting for Matching Gifts 2121 Accounting
for Program Income 2122 Sponsored
Project Payments 2123 Funding
under Letter of Credit Agreements 2125 Delinquent
Payment/Nonpayment of Project Costs by Sponsors 2126 Interim
& Final Financial Reports 2129 Write-off of Overdrafts and Disallowances 2131 Compliance
with Subrecipient Standards of OMB Circular A-133 2133 Advances
of Cash from External Sponsors 2135 Monitoring
Subrecipients Not Subject to OMB Circular
A-133 2138 Direct
Cost Expenditures for Non-Federal Organizations 2140 Expense
Approval Requirements 8.3 General Administration8.3.1 Expenditure of FundsOnce an account has been established and budgeted (see Initiating the Project Award ), project expenditures can be made. The department's business office will assist the principal investigator in administering an award and will provide monthly reports on the project's financial status. The principal investigator should assure that the charges made to the project account each month are accurate, reasonable and allowable under the terms of the award. 8.3.2 Allowable CostsAllowable costs are defined by sponsors
in their award documentation. In general, expenditures that
are in conformance with the sponsor approved budget are allowable.
Unapproved deviations from the budget may result in a disallowance
by the sponsor requiring transfer of the disallowed expenditure
to 8.3.3 Unallowable CostsCertain costs may be unallowable either as direct or F&A cost, regardless of sponsor. For example, parking fines while on University business are unallowable (Procurement/Disbursement Policy No. 2329 and Sponsored Projects Policy No. 2111). 8.3.4 Specific Expenditure CategoriesMany specific expenditure categories have special requirements and considerations. Administration of the major categories is summarized in the sections below. 8.3.4.1 PersonnelAppointments of all personnel to sponsored projects are subject to the Human Resources Policies of the University. Payment of all personnel is effected through the University's Personnel/Payroll System and is administered in the departmental business office. 7 Faculty and Staff Salaries A research project should be charged with a portion of each employee's salary equal to the portion of time or effort devoted directly to the project. For a faculty member with a nine-month appointment, one month of effort is one-ninth of his academic year salary. Salary increases can be charged proportionally to the project if they can be accommodated within the project budget. 7 Summer Salaries Most sponsors will provide for compensation of faculty members with nine-month salary bases during summer months at their regular University salary rates when included as part of the project proposal. Submission by the University of a proposal that provides for summer salary does not imply a University commitment to pay such salaries in the event that the sponsor does not provide for summer salaries in the project award nor does it imply that the University will pay the capped portion of a salary if the sponsor imposes such a cap. 7 Additional Compensation Project funds may not be used to increase the regular compensation of the principal investigator or other University staff members.
7
Graduate Research Assistants Graduate research assistants should be separately budgeted for their salary/stipend and for their tuition remission as stated in Graduate Research Assistants . Stipends are specifically unallowable on NIH research awards (the R, S, U, N, and P series) and graduate research assistants should be paid using Object Code 5041. Graduate students paid stipends from NIH or other training grants should be paid using Object Code 5045. For further information please consult the Penn Tax Guide to Graduate Student and Post-Doctoral Appointments. 7 Postdoctoral Researchers Unless specifically permitted by the terms of the award Postdoctoral researchers must be paid as employees of the University using Object Code 5047. Stipends are specifically unallowable on NIH research awards (the R, S, U, N, and P series). For further information on the appropriate object codes to be used for post-doctoral appointments please consult the Penn Tax Guide to Graduate Student and Post-Doctoral Appointments 8.3.4.2 Human Subjects and Animal Care CostsThese costs are allowed
only if project has received prior IRB and/or IACUC approval. 8.3.4.3 TravelTravel requests and reimbursements for sponsored projects are processed in accordance with University travel procedures and guidelines, as defined in the Financial Policy Manual. Dependent travel or personal side-trips cannot be charged to a sponsored project account. Each travel request should clearly state the relationship of the trip to sponsored project effort. The Travel and Entertainment Expenditure Justification for Sponsored Projects form can be used for this purpose. The form is required to be completed and submitted with all reimbursement requests for foreign travel on federal awards. 7 Domestic Travel Domestic travel in support of sponsored projects is generally allowable, although some awards such as federal contracts may place limits on the amounts to be used for travel or may require adherence to federal travel regulations. 7 Foreign Travel Foreign travel is generally defined
as any travel outside the Some sponsors require that foreign travel be approved in writing and in advance, even when the award includes funds for foreign travel. Federal awards require that all foreign travel utilize US-flag air carriers wherever possible without regard to cost or convenience. This requirement applies to any non-federal funds used for cost sharing on federal awards. See Travel and Entertainment Policy #2354: International Travel for further information. 8.3.4.4 Equipment8.3.4.4.1 Definition of Non Expendable EquipmentItems with a unit cost of $5,000 or more and a useful life of one year or more. 8.3.4.4.2 Types of Non Expendable EquipmentSpecial Purpose Equipment: used only for research, medical, scientific or other technical activities. Examples: laboratory instrumentation. General Purpose Equipment: not limited only to research, medical, scientific or other technical activities. Examples: office furniture, computers, air conditioners. 8.3.4.4.3 Approval to PurchaseMany sponsors permit the acquisition of non-expendable equipment with grant or contract funds provided it is required for the performance of the project. Some sponsors require that prior written approval be obtained before equipment is purchased while others give the University the authority to make such decisions. The principal investigator should ascertain the specific requirements of the award from which equipment is to be purchased prior to ordering it. Consult the department or school business office or ORS. 8.3.4.4.4 Equipment AcquisitionAs for most purchases, generally, the business office orders equipment through BEN Buys although some laboratories are approved to order certain items directly. For further information, go to the Purchasing Services web site. 8.3.4.4.5 Equipment RecordsThe business office in the department should keep project equipment records on each item acquired, showing at least the following: 7 Name of Item 7 Manufacturer 7 Model No. 7 Serial No. 7 Acquisition Document Reference (P.O. No., Date and Acct. No.) 7 Unit Cost Approval Document Reference (when required) 7 Sponsor Grant/Contract Number 7 Location 7 Equipment Inventory and Disposition Requirements On all federal contracts, and in some other special cases, annual and final equipment inventories to the sponsor are required. ORS will initiate requests for inventories, as necessary. Most sponsors include provisions for transfer of title to the University for authorized equipment acquisitions. The transfer of title may take place at the time of initial acquisition or at the completion of the project. If an item of equipment was bought with sponsored project funds or was provided by the sponsor, and is to be sold, traded in for new equipment, or scrapped, provide ORS with the project number, original cost and acquisition date of the item. ORS will advise as to appropriate action. In all cases equipment owned by the sponsor must be returned to the sponsor or a request for title must be made. 8.3.4.5 Non-Employee Personal Services to Sponsored ProjectsFrequently, the services of individuals
who are 8.3.4.5.1 HonorariaHonoraria are not allowable as a charge against most federally sponsored projects. They are considered a payment or reward where the primary intent is to confer distinction on, or to symbolize respect, esteem or admiration for, the recipient. Services chargeable to a federal sponsored project should be classified as to type of service, i.e., consulting fees, lecture fees, etc. Non-government sponsored projects may be charged for honoraria where appropriate and with the specific approval of ORS. 8.3.4.5.2 Lecture FeesSuch fees may be charged to training projects provided they are allowable within the terms of the specific grant or contract. Lecture fees are not an appropriate charge to research projects. 8.3.4.5.3 Other Non-University Employee ServicesFor personal services not covered by the above categories, a description of the services rendered must accompany the payment request (Request for Payment Form C-368). Such services are normally allowable provided the services are essential to the project, the charges are reasonable and a selection process has been employed to secure the most qualified individual available. 8.3.4.5.4 Payment of Non-University Employee TravelIf a non-University employee bills for travel in connection with the above services and provides original receipts to support travel expenses, then the travel expenses are paid on a C-1 Form. This reimbursement is not reported to the IRS. If original travel receipts are unavailable, the travel expenses should be included in the total reimbursement under the appropriate object code on the C-368 Form. See Travel and Entertainment Policy - (#2361) Expense Reimbursement for further information. 8.4 Subrecipients (Subawards)8.4.1 OverviewWhen the University is awarded a sponsored project agreement in which a substantial portion of the work will be accomplished by another institution or organization, the policies and procedures set forth in this Section apply. Note: In general, these instruments should not be used to contract for services of a consulting firm or organization even though subawards and goods and services agreements are formally encumbered in the University accounting system through the use of purchase order agreements. Subawards can not be used for routine purchases of equipment or support services. 8.4.2 The SubawardUsually, subrecipients must honor the same terms and conditions the sponsor imposes on the University. The purpose of the subaward document is to establish those requirements contractually. Upon receipt of the award from the sponsor, a representative of Research Services, will contact the BA and the PI to the subaward requirements. After confirming the cost, time period, scope of work, billing requirements, reporting requirements, appropriate subaward instrument, and special needs of the project, ORS will write and mail the subaward. The accompanying letter advises that a Purchase Order will follow. If the subrecipient is new to the University, a Vendor Questionnaire will be sent asking the subrecipient to specify its vendor name, address, and then sign and return the agreement to Research Services. For a more detailed explanation of the process for subawards see the Section on Establishing a University Purchase Order for Subrecipients . 8.4.3 The Purchase OrderResearch Services sends the responsible BA a copy of the signed agreement with instructions for creating the official University purchase order. The following are issues to consider: 1. If the vendor and site data are not in the Purchasing system, the BA must submit a request to the Purchasing System Administrator to add the vendor into the system. (See Supplier Update Form). 2. For each subaward, the account distribution should link Object Code #5332 to the first $25,000 of subaward expenditures, and Object Code #5333 thereafter. This step ensures F&A costs are properly charged. When non-standard F&A cost rates are applied to the subaward, the account distribution linkage should be adjusted accordingly. For non-federal funds Object Code #5332 should be used for the entire amount of the subaward (see Sponsored Projects Policy No. 2138 and the section on Accounting Procedures for Non-Federal Sponsors and the F&A Costs of Sponsored Projects ).
3.
The Notes to the Vendor field should establish a clear link
to the subaward by reading:
4.
If the subaward purchase order is greater than $5,000, the following
statement must be entered in the Notes to Approver field: The purchase order is then approved in accordance with the School/center purchase order approval hierarchy. 8.4.4 InvoicesThe subrecipient is instructed to mail invoices directly to the responsible BA for forwarding to Accounts Payable. The subaward describes the required invoice format. The PI must approve payments before Accounts Payable will pay (see Sponsored Projects Policy Nos. 2110, 2131, and 2135). 8.4.5 Additional Increments and Subaward ModificationsWhen an increment is necessary, Research Services will send a signed modification to the subrecipient, advising that the subaward is being increased and extended, and a new purchase order number will be issued. Research Services will then send a copy of the modification to the department, with instructions to create a new purchase order as follows: 1. The BA links the new purchase order to the original BEN Buys subaward. 2. The Notes to Vendor field should indicate that this is an extension of subaward services for subaward # ______, modification # _____________, dated ____________. 3. If the original agreement was for less than $25,000, the difference between the original award and $25,000 will be charged to Object Code #5332. The balance will be charged to Object Code #5333. For non-federal funds Object Code #5332 should be used for the entire amount of the subaward (see Sponsored Projects Policy No. 2138 and the section on Accounting Procedures for Non-Federal Sponsors and the F&A Costs of Sponsored Projects ). 4. If the subaward purchase order is greater than $5,000, the following statement must be entered in the Notes to Approver field: "Revision to Subaward The purchase order is then approved in accordance with the school/center purchase order approval hierarchy. For a more detailed explanation of the Purchase Order process for subawards see the Section on Establishing a University Purchase Order for Subrecipients . 8.4.6 Subaward Close-outThe University generally requires subrecipients to provide final invoices within 45 days of project conclusion, or, half the number of days available to the University to submit a financial report, whichever is less. It is the BA's responsibility to request and maintain a record of the subrecipient's expenses. Research Services is responsible for requesting final invention reports and providing them to sponsors. The PI is responsible for coordinating preparation and submission of any required final technical reports (See Sponsored Projects Policies Nos. 2131 and 2135.) 8.5 Consultants8.5.1 Payment of Consulting Fees and DocumentationA consulting agreement
is recommended in most cases and is always required by federal
sponsors. A copy of a recommended agreement appears in
the Forms
and Agreements section of the Research Services web site. The consulting agreement must be completed prior
to the s Fees for consultants may be charged to sponsored projects in accordance with the terms of the specific grant or contract and the University's policy. Payments should be made only for work already completed and must be supported by a Consulting Agreement form and by an invoice signed by the consultant for the work performed. Reminder: NSF sets limits on the daily consultant reimbursement rate (NSF Daily Rate). 8.5.1.1 For All ConsultantsConsultants should be paid only for work that is already completed and supported by a consulting agreement and an invoice signed by the consultant. The invoice must specifically include the following:
Consulting should only be performed and charged to an award
while the award is in active status.
Work performed outside the award period is the responsibility
of the department. Please
refer to the Corporate Tax Office website for detailed information
regarding the engagement and payment of individual consultants
(http://www.finance.upenn.edu/comptroller/tax/index.shtml).
University personnel engaged as consultants under the University's policy on Extra Compensation for University Employees must follow the procedures outlined below. 8.5.1.2 For External ConsultantsPayments to external consultants should be processed in accordance
with 8.5.1.3 For Federal EmployeesFees paid to federal employees are generally not allowable as charges to federal grants and contracts. Before committing to pay federal employees for any consulting, lecture, travel fees, or meals, contact Research Services to determine allowability.
8.5.1.4
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