SPONSORED PROJECTS HANDBOOK

Office of Research Services

 

Forward. xiv

1. Introduction. 1

... 1.1 Purpose of the Handbook. 1

... 1.2 Principal Investigators. 1

... 1.3 Sponsored Project Definition. 1

... 1.4 Gifts. 2

... 1.5 Who Can Submit a Proposal for External Support?. 2

... 1.6 Sources of Project Support 3

... 1.6.1 University Sources of Project Support 3

... 1.6.2 Non-University Sources of Project Support 3

2. University Organization for Research Administration. 7

... 2.1 General Administrative Structure. 7

... 2.1.1 Vice Provost for Research. 7

... 2.1.2 University Council Committee on Research. 8

... 2.1.3 Provost's Council on Research. 8

... 2.1.4 Office of Research Services. 8

... 2.1.5 Office of Regulatory Affairs. 10

... 2.1.6 Office of Research Integrity and Compliance. 11

... 2.1.7 Center for Technology Transfer 11

... 2.1.8 Business Services, Finance, Facilities Management and Human Resources. 11

... 2.1.9 Dean and Department Chairs. 11

3. Administrative Policy Considerations. 12

... 3.1 Corporate Responsibility. 12

... 3.2 Formal Documentation. 12

... 3.3 Authorized Signatures. 12

... 3.4 Classified Research. 12

... 3.5 Endorsement of Research Results. 12

... 3.6 Conflict of Interest 12

... 3.7 Ownership of Intellectual Property. 13

... 3.8 Students in Research. 13

4. Roles and Responsibilities. 14

... 4.1 The University and its Faculty. 14

... 4.2 Academic Evaluation of Sponsored Programs. 15

... 4.3 Administrative Requirements for Sponsored Programs. 15

... 4.4 Administrative Review of Sponsored Programs. 16

... 4.5 The Business Administrator 16

5. Preparation of Proposals. 18

... 5.1 Introduction. 18

... 5.2 Relevant Sponsored Projects Policies. 18

... 5.3 Preliminaries to Proposal Preparation. 18

... 5.3.1 Sponsored Research Agreements with Commercial Entities. 18

... 5.4 Research and Project Proposal 19

... 5.4.1 General Requirements. 19

... 5.4.2 Content of Proposal 20

... 5.5 Preparing Proposal Budgets. 22

... 5.5.1 Direct Costs. 22

... 5.5.2 Representations and Certifications. 29

... 5.5.3 Facilities and Administrative Costs (formerly Indirect Costs or Overhead) 29

... 5.5.4 Cost Sharing. 31

... 5.6 University Review of Proposals. 31

... 5.6.1 Requests for Proposals and Requests for Applications. 32

... 5.6.2 Proposal Signatures. 32

... 5.6.3 Deadlines for Proposals. 32

... 5.6.4 Electronic Submission of Proposals. 32

... 5.6.5 Required Copies of Proposals. 33

... 5.6.6 Multiple Solicitations. 33

... 5.6.7 Proposal Transmittal and Approval Form.. 33

... 5.7 Review and Approval Channels. 34

... 5.8 Proposals Requiring Special Review.. 35

... 5.8.1 Human Subjects Review.. 35

... 5.8.2 Animal Care Review.. 36

... 5.8.3 Biohazards Safety Review.. 36

... 5.8.4 Investigational Drug and Device Testing. 36

... 5.8.5 Radiation Safety. 36

... 5.8.6 Radioactive Drug Research. 36

... 5.8.7 Conflict of Interest Disclosure. 36

... 5.8.8 Clinical Trials. 37

... 5.9 Project Site Visits. 38

6. Types of Agreements and Instruments. 39

... 6.1 Grants. 39

... 6.2 Contracts. 39

... 6.3 Cooperative Agreements. 40

... 6.4 Other Agreements. 40

... 6.5 Issues Requiring Special Consideration. 40

... 6.5.1 HIPAA.. 40

... 6.5.2 Export Controls. 41

7. Initiating the Project Award. 42

... 7.1 Award Notification. 42

... 7.2 What to Look for in a Notice of Award. 42

... 7.3 Account Information Sheet 43

... 7.4 Establishing the Account 43

... 7.5 Budgeting. 43

... 7.6 Payroll Management 43

... 7.7 Sponsor Payments. 43

... 7.8 Anticipated Awards (Advance Account Requests) 43

... 7.9 Supplements to Awards. 44

8. Award Administration. 45

... 8.1 Sponsor-University Relationship. 45

... 8.2 Relevant Sponsored Projects Policies. 45

... 8.3 General Administration. 46

... 8.3.1 Expenditure of Funds. 46

... 8.3.2 Allowable Costs. 46

... 8.3.3 Unallowable Costs. 46

... 8.3.4 Specific Expenditure Categories. 46

... 8.4 Subrecipients (Subawards) 51

... 8.4.1 Overview.. 51

... 8.4.2 The Subaward. 51

... 8.4.3 The Purchase Order 52

... 8.4.4 Invoices. 52

... 8.4.5 Additional Increments and Subaward Modifications. 53

... 8.4.6 Subaward Close-out 53

... 8.5 Consultants. 53

... 8.5.1 Payment of Consulting Fees and Documentation. 53

... 8.6 Program and Interest Income. 55

... 8.6.1 Program Income. 55

... 8.6.2 Interest Bearing Funds and Excess Cash. 56

... 8.7 Rebudgeting of Funds. 57

... 8.8 Project Extensions. 57

... 8.8.1 Federal Sponsors. 57

... 8.8.2 Non-Federal Sponsors. 57

... 8.9 Retroactive Cost Transfers. 58

... 8.10 Billing and Financial Reporting. 58

... 8.11 Overexpenditures and Collections. 58

9. Project Changes. 59

... 9.1 Overview.. 59

... 9.2 Documenting Project Changes. 60

... 9.3 Expanded Authorities or Waiver of Authorities. 60

... 9.4 Federal Demonstration Partnership (FDP) 61

... 9.5 Project Changes Allowability Checklist 61

... 9.6 Change of Principal Investigator or Reduction of Effort 61

... 9.7 Project Transfer to another Institution. 61

... 9.8 Other Post Award Changes. 62

... 9.9 Considerations of Project Changes by Categories. 62

... 9.9.1 Change in Effort of Key Personnel 62

... 9.9.2 Change in Scope of Work. 62

... 9.9.3 Significant Rebudgeting. 62

... 9.9.4 Equipment Not Included in Proposal 62

... 9.9.5 Subrecipients Not Included in Proposal 63

... 9.9.6 Foreign Travel Not Included in Proposal 63

... 9.9.7 Consultants Not Included in Proposal 63

10. Effort Reports. 64
...

... 10.1 Purpose and Scope

... 10.2 Effort Reporting and the Importance of Accurate Reporting

... 10.3 Responsibilty for Accurate Reporting

... 10.4 Allocation of Effort among Activities 62

... 10.5 Reviewing and Changing Effort Percentages

... 10.6 Effort Repoirting of Individuals Subject to Salary Caps

... 10.7 Reporting Mandated and Voluntary Committed Cost Sharing

... 10.8 Effort Percentages Must Toal 100%

... 10.9 Penn's Effort Reporting System

... 10.9.1 ERS Reports

... 10.9.2 Roles and Responsibilties

.

11. Guidelines for Cost Transfers. 69

... 11.1 Overview.. 69

... 11.2 Allowable Cost Transfers. 69

... 11.3 Types of Allowable Cost Transfers. 69

... 11.3.1 Errors/Corrections. 69

... 11.3.2 Transfer of Unliquidated Items. 70

... 11.3.3 Transfer of Costs to a Continuation Year of a Project 70

... 11.4 Unallowable Cost Transfers. 70

... 11.4.1 Funds in Overdraft Status. 70

... 11.4.2 Funds Terminating with Unexpended Balances. 71

... 11.5 Timeliness of Cost Transfers. 71

... 11.6 Restricted Transactions: 71

... 11.6.1 F&A and Employee Benefits Adjustments. 71

... 11.6.2 Transfer of Fund Balances. 71

... 11.6.3 Object Code #4820 or #4920. 71

12. Project Reporting. 72

... 12.1 Overview.. 72

... 12.2 Relevant Sponsored Projects Policies. 72

... 12.3 Technical Reports. 72

... 12.4 Report of Inventions. 72

... 12.5 Final Inventory of Equipment 73

... 12.6 Interim Financial Reports. 73

... 12.7 Final Financial Report 73

... 12.8 Audit 73

... 12.9 Record Retention. 74

13. Audits. 75

... 13.1 Overview.. 75

... 13.2 Pre-Award Audits. 75

... 13.3 Post-Award and System Audits. 75

... 13.4 Audit Guidelines. 75

... 13.4.1 Audit Request 75

... 13.4.2 Conduct of Audit - Entrance Conference. 76

... 13.4.3 Documentation Requests. 76

... 13.4.4 Exit Conference and Audit Reports. 76

... 13.5 Audit Findings and Resolution. 77

14. Accounting Procedures for Non-Federal Sponsors and the F&A Costs of Sponsored Projects 78

... 14.1 Dependent Tuition Charges for Projects with Non-Federal Sponsors. 78

... 14.2 Full Federal F&A Rate for Projects Sponsored by Commercial Entities. 78

... 14.3 New Options for Projects Sponsored by Foundations and Associations. 78

... 14.4 Direct Costs for Projects Sponsored by Foundations and Associations. 79

... 14.4.1 School and Departmental Administrative Costs. 79

... 14.4.2 Subaward Costs. 79

... 14.4.3 Space Used by the Project 79

... 14.4.4 Protocol Specific and Research Infrastructure Charges. 79

... 14.5 F&A Costs for Projects Sponsored by Foundations and Associations. 79

... 14.5.1 Charges for School and Departmental Administrative Costs. 79

... 14.5.2 Cost of Space Used by the Project 80

... 14.5.3 Charges for the Project's Fair Share of the University Services. 80

15. Establishing a University Purchase Order for Subrecipients. 82

... 15.1 General Guidelines. 82

... 15.2 New Subawards. 83

... 15.2.1 Identifying Supplier Information in BEN Financials. 83

... 15.3 Entering the Subcontract e-requisition. 86

... 15.4 Subaward Changes. 84

... 15.4.1 No Cost Extensions. 84

... 15.4.2 Reduction in Period of Performance and/or Subaward Amount 84

... 15.4.3 Increase in Award Amount for Existing Subaward Period. 85

... 15.4.4 New Subaward for a New Budget Period. 85

... 15.5 Receipting of Invoices for Subaward Purchase Orders. 93

... 15.6 Finally Closing Fully Invoiced Subaward Purchase Orders.

... 15.6.1 Funds with Automatic Carryover (Change of Fund#)

... 15.6.2 Funds without Automatic Carryover (Change of Fund#)

... 15.7 Payment of Foreign Subrecipients and Wire Transfers.

16. Detailed Effort Reporting Procedures. 101

... 16.1 An Effort Report will be generated in ERS for the following Individuals:

... 16.2 ERS System Roles 108

... 16.3 Initiation of and Effort Report 108

... 16.4 ERS System Access 108

... 16.5 ERS System Features include the following:

... 16.6 The ERS Effort Report Form

... 16.6.1 Definitions and Reporting of Clinical Activity 109

. . 16.7 Detailed Instructions for Reporting Effort of Individuals Subject to Salary Caps

... 16.7.1 NIH Salary Cap (as of January 2006) 108

... 16.7.2 Reporting Procedures

... 16.7.2.1 Faculty and Staff with 12 month appointment 109

... 16.7.2.2 Faculty and Staff with 9 month appointment 109

... 16.7.3 Calculation of Cost Transfer and Reporting of Costy Share Activity

17. Service Centers & Recharge Centers. 108

... 17.1 Overview.. 108

... 17.2 University and OMB Circular A-21 Requirements. 108

... 17.3 Cost Accounting Standards (CAS) & Service Centers. 108

... 17.4 Principles for Achieving Compliance with CAS. 109

... 17.5 Service Center Costs. 109

... 17.6 Recovery of Fixed Assets. 109

... 17.7 Pricing. 109

... 17.8 Calculating Variances. 110

... 17.9 Documentation. 110

... 17.10 Guidelines for Establishing Billing Rates. 110

... 17.11 Sample Calculation. 110

... 17.12 Service Center Management Responsibilities. 111

18. Financial Reporting. 112

... 18.1 Financial Reports, General Information. 112

... 18.1.1 Responsibility. 112

... 18.1.2 Requirements. 112

... 18.1.3 Initiation of the Reporting Process. 113

... 18.2 Financial Reporting Attributes. 113

... 18.3 Reports to Assist in Reporting and Management of the Award. 115

... 18.4 Interim Financial Reports. 116

... 18.4.1 Interim/Annual Reporting on DHHS Grants with Non-Competing Continuation of Funding 117

... 18.4.2 Final Period of Project Segment 117

19. The Close-out and Final Reporting Process. 118

... 19.1 Pre-Closeout Review.. 118

... 19.2 Summary Final Expenditure Report for Closeouts. 118

... 19.2.1 ORS Review of the SFER.. 120

... 19.3 Final Financial Reporting. 120

... 19.3.1 Adjustment Period. 120

... 19.3.2 Account Review.. 122

... 19.4 Revised Final Financial Reports. 128

... 19.5 Final Account Close-out 129

... 19.6 Disabling the Fund. 129

... 19.7 Overdrafts. 130

... 19.8 Accounts with Residual Cash Balance. 130

... 19.9 Disallowances. 131

20. OMB Circular A-21: Cost Principles for Educational Institutions 132

... 20.1 Overview.. 132

... 20.2 Allowability of Costs. 132

... 20.2.1 Reasonable Cost 132

... 20.2.2 Allocable Cost 132

... 20.2.3 Consistent Accounting Treatment 133

... 20.2.4 Conformance to Limitations or Exclusions. 133

... 20.3 Cost Accounting Standards. 133

... 20.3.1 501: Consistency in Estimating, Accumulating, and Reporting Costs. 133

... 20.3.2 502: Consistency in Allocating Costs Incurred for the Same Purpose. 134

... 20.3.3 505: Accounting for Unallowable Costs. 134

... 20.3.4 506: Cost Accounting Periods. 134

21. Additional Reference Materials. 135

 

 

 

Foreword

The University of Pennsylvania recognizes as its two principal responsibilities the creation of new knowledge and the communication of existing knowledge to its students and to society. Its success in meeting the first responsibility places it among the leading research universities in the United States.

Our research enterprise is supported by a continuing and substantial commitment of University resources and by external sponsors, the latter at an annual level of nearly 700 million dollars. An enterprise of such magnitude, with so many participants and interested parties, must be sustained and guided by something more than the excitement of the quest for new knowledge. There must be an administrative structure, operating under established policies and procedures, that assists our research investigators in seeking the necessary resources and in managing their use in accordance with the proper objectives of the University and of external patrons. The operational focus of that structure is the Office of Research Services (ORS), responsible to the Senior Vice President for Finance & Treasurer and to the Vice Provost for Research, guided by the University Council Committee on Research and the Provost's Council on Research.

The Sponsored Projects Handbook gathers in one place existing policies and procedures for the administration of funding directed to research, training, and other sponsored projects at the University of Pennsylvania. It is important for all research investigators and administrators to be aware of these policies and procedures to better meet their individual responsibilities and to permit the University to manage and monitor its commitments and resources. While we will attempt to maintain the timeliness and accuracy of the policies and procedures, we must also rely on current policy memoranda as may be issued periodically.

We hope the Sponsored Projects Handbook will be of assistance to the faculty and staff in the administration of sponsored research and other projects. Please send your comments and suggestions for change to abrud@pobox.upenn.edu.

Andrew B. Rudczynski, Ph.D.
Associate Vice President for Finance
Executive Director, Research Services

October 2004

 

1         Introduction

1.1      Purpose of the Handbook

To ensure that funds provided from external sources to support research and other projects are administered in accordance with University policies, as well as those of the sponsor, all externally sponsored projects for research or other purposes will be administered through the Office of Research Services (ORS) in accordance with established University policies and procedures. External sources include both governmental and private organizations.

Faculty and staff members who conduct sponsored projects under University auspices have an important public, as well as personal, responsibility to manage those projects carefully. The Sponsored Projects Handbook will help research investigators fulfill that responsibility. Its purpose is to acquaint new investigators with the research policies and procedures of the University, to inform them of the various services available to them, and to serve for all investigators and administrators as a reference and guide to further information and assistance. While greater emphasis and space are given to sponsored research, the policies and procedures outlined generally apply to other sponsored projects, such as training grants.

Where appropriate, specific reference is made to University policies on Sponsored Projects. Investigators and administrators should be mindful that portions of this Handbook may be superseded by policy memoranda, or changes in sponsors' policies and regulations. While every attempt will be made to keep the materials herein timely, ultimately the most current information will be found in specific sponsor documentation and award documents.

1.2      Principal Investigators

The University's principal investigators bear the primary responsibility for the success of their sponsored research and training projects. In addition to their academic and scholarly duties, principal investigators must exercise a substantial degree of administrative acumen to enable the research enterprise, of which they are the crucial part, to function successfully. This Handbook is intended as a guide and reference to principal investigators in carrying out their extensive responsibilities. See Sponsored Projects Policy No. 2106.

1.3      Sponsored Project Definition

 

Any project, which meets any of the following criteria, is considered to be a "sponsored project" (see Sponsored Projects Policy No. 2101) and will be administered accordingly:

 

1. The project commits the University to a specific line of scholarly or scientific inquiry, typically documented by a statement of work;
2. A specific commitment is made regarding the level of personnel effort, deliverables, or milestones;
3. Project activities are budgeted, and the award includes conditions for specific formal fiscal reports, and/or invoicing;
4. The project requires that unexpended funds be returned to the sponsor at the end of the project period;
5. The award provides for the disposition of either tangible property (e.g., equipment, records, technical reports, theses or dissertations) or intangible property (e.g., inventions, copyrights or rights in data) which may result from the project; and
6. The sponsor identifies a period of performance as a term and condition.

 

All research and teaching activities, whether or not considered a sponsored project, which involve human subjects, laboratory animals, use of radioactive materials, or biohazard activities must be reviewed by the appropriate University committees for compliance with University policies and governmental regulations.

1.4      Gifts

 

Gifts to the University of a restricted or unrestricted nature which do not include any of the above conditions are not viewed as sponsored projects and are not processed through ORS, but rather through the normal gift transmittal procedures. Gift solicitation and acceptance should be coordinated with the appropriate development officer in each school.

 

In cases where there is a question whether a particular project should be treated as a sponsored project or gift, the Executive Director of ORS will consult with representatives of the School(s) involved, the Corporate and Foundations Relations Office, and the Office of the Treasurer to determine its appropriate classification.

1.5      Who Can Submit a Proposal for External Support?

 

A person holding the academic rank of professor, associate professor or assistant professor can serve as a Principal Investigator (see Sponsored Projects Policy No. 2136).

 

The principal investigator must be an employee of the University or hold an adjunct or emeritus appointment.

 

Research and training proposals may be submitted by individuals who do not qualify under this policy requirement provided the proposal is approved in writing by the appropriate department chair and dean, indicating their affirmative endorsement of the proposal, and the chair's acceptance of responsibility to monitor the conduct and quality of the work.

 

1.6      Sources of Project Support

 

There are two main sources of funds for research and other projects, University and non-University. Since University programs of support are of necessity very limited and devoted to supplying seed money or support for small projects, researchers are urged to contact outside sponsors. The usual route is the submission of formal proposals to potential sponsors as discussed below.

1.6.1      University Sources of Project Support

a.       The Research Foundation

An internally funded Research Foundation was approved by the Trustees in January 1981 to seed new projects that could become self-supporting, to bridge between grants, and to fund modest research projects for which external support is not offered. Application procedures and guidelines for the Fall and Spring award cycles are announced in the Almanac. Contact the Office of the Vice Provost for Research for further information.

b.      Research Facilities Development Fund

The Research Facilities Development Fund supports the improvement, renovation and construction of research facilities at the University, as well as the acquisition of major items of equipment. The Fund is a revenue source for projects which are academic priorities linked to a School's/Center's strategic plan. Applications for this fund are accepted only from Deans and certain Institute Directors. Contact the Office of the Vice Provost for Research for further information.

c.       Provost's Interdisciplinary Seminar Fund

The Provost announces a seminar fund to stimulate the creation of interdisciplinary discussions and connections that could grow into lasting cooperative intellectual efforts and perhaps programs. Contact the Office of the Vice Provost for Research for further information.

1.6.2      Non-University Sources of Project Support

* A broad variety of organizations, both private and public, provide funding for research and training activities of interest to University faculty. These organizations range from large federal agencies such as NIH and NSF to small foundations and associations.

* Many organizations which support research have their own web sites, a number of which are listed and linked through the ORS website ORS Forms & Agreements.

* The University's Department of Development and Alumni Relations (DAR) is responsible for raising funds from external, non-governmental sources for University as well as School/Center priorities. Each School/Center has a development office, which can also serve as a resource for faculty. Check with your School/Center's office to understand how they might be able to assist. The Office of Strategic Corporate and Foundation Initiatives (CFI), which reports jointly to DAR and the Vice Provost for Research, is responsible for coordinating activities with university-level corporations and foundations and identifying possible corporate or foundation support.

* Sponsored Program Information Network (SPIN)

-          The easiest way to begin to learn about potential sponsors in a specific area of interest is by doing an electronic search using the SPIN data base to which the University subscribes and is available to all University personnel at http://www.pennera.upenn.edu/.

1.6.2.1       Federal Agencies

The grants.gov site allows universities to locate and apply for competitive grant opportunities from all Federal grant-making agencies. The Find Grant Opportunities feature provides the ability to search for Federal government-wide grant opportunities and to receive notification of future grant opportunities. The Apply for Grants feature allows organizations to apply for Federal grants online through a unified process. Grants.gov Resources enables organizations to access useful grants-related information and links.

FedBizOpps.gov is the single government point-of-entry for Federal government procurement opportunities over $25,000. Government buyers are able to publicize their business opportunities by posting information directly to FedBizOpps via the Internet. Through one portal - FedBizOpps - commercial vendors seeking Federal markets for their products and services can search, monitor and retrieve opportunities solicited by the entire Federal contracting community.

The NIH Funding Opportunities web site contains helpful information about NIH programs. Similarly, the NSF home page contains information about NSF programs.

1.6.2.2       Commercial Sponsors of Research

 

Many private companies are interested in finding ways to interact with University faculty researchers. In order to facilitate such arrangements, while avoiding the many pitfalls inherent in these relationships, the following guidance is offered:

a.       Interaction between faculty researchers and their counterparts in industry is encouraged.

b.      Support of specific research projects by industry is subject to the same policies and procedures as those funded by government agencies.

c.       Issues frequently encountered in negotiations with companies include freedom of dissemination of the results of the research, ownership of intellectual property including patents, conflicts of interest, freedom of choice in the selection of research topics and in the conduct of the research, and relevance to the educational mission of the University.

d.      In fulfillment of (b) above, the University cannot accept research awards from industrial sponsors until a formal research proposal including a budget has been reviewed and approved by the appropriate department Chair, Dean and ORS. Compliance with applicable policies for protection of conflict of interest, human subjects, animal welfare, radiation safety, etc. is required.

e.       Proposals for corporate support should provide for full recovery of costs including F&A costs (formerly indirect costs) at the full federally approved research rate. Any reduction in F&A costs exceeding $25,000 must be approved by the cognizant Dean subject to the review of the Senior Vice President for Finance and the Vice Provost for Research. Such decisions should take into account the importance of the specific project to the overall program of the school and the potential benefits of the project to the sponsor. Corporations are fully aware of the reality of F&A costs and should recognize the University's need to recover such costs (see Sponsored Projects Policy 2116).

f.        The Center for Technology Transfer (CTT), the Vice Provost for Strategic Initiatives, and the Corporate and Foundation Initiatives Office can provide assistance in acquiring corporate support. Faculty members submitting proposals to corporations are urged to consult with these offices and keep them informed of their progress. ORS has developed a model agreement for sponsored research from industry which is available at http://www.upenn.edu/ researchservices/pdfs/sponsres.pdf. Principal Investigators are urged to provide a copy of this agreement to their industry counterparts at an early stage of discussions of research support.

g.       Terms and conditions of industry Sponsored Research Agreements (SRA) without licensing of existing intellectual property are negotiated by ORS. SRA's involving the licensing of existing intellectual property are jointly negotiated with CTT and ORS (see Sponsored Projects Policy No. 2104).

1.6.2.3       Foundations and Other Not-for-Profit Sponsors

 

The University receives funds from numerous foundations and other not-for-profit sponsors. The terms and conditions of these awards are widely variable. Principal investigators should review the terms and conditions of awards including the entity's policies on intellectual property prior to submitting applications to these sponsors.

 

The University's position on these issues is described in the following: Guidelines on Foundation Intellectual Property Issues.

2         University Organization for Research Administration

2.1      General Administrative Structure

The University regards the research and scholarly activities of its faculty as part of their normal academic responsibilities. The primary responsibility for research, therefore, resides in the departments and schools. A principal investigator is responsible to his/her Chair and Dean for his/her research activities just as for other academic activities. However, in view of the enormous growth of research activities in the past decade, the University has made a number of administrative arrangements to support the Chairs and Deans and to provide for an overall review of these University activities.

The Vice Provost for Research, supported by ORS and the other research support offices (see below) is responsible for the administration of the University's research projects and works with the deans and other heads of educational and research units and with the faculty in establishing research policies and procedures. The Vice Provost is advised by the University Council Committee on Research and the Provost's Council on Research. The Executive Vice President and the Vice Presidents for Business Services, Human Resources, Finance and Facilities Services, and the Vice Provost for Information Systems & Computing provide supporting services to the research community.

2.1.1      Vice Provost for Research

 

The Vice Provost for Research is the University official responsible for the development and implementation of policies and procedures relating to extramurally sponsored projects. In carrying out this responsibility, the Vice Provost acts with the advice of the University Council Committee on Research and the Provost's Council on Research.

 

The Vice Provost for Research is the University official responsible for policies and procedures concerning the care, maintenance and use of all vertebrate animals in research, research training and biological testing activities, in compliance with the rules of regulatory authorities. Details of the policies and procedures are included in the "Institutional Animal Care and Use Committee Guidelines". Copies are available at the Office of Regulatory Affairs 898-2614/2615/0081.

 

The Vice Provost for Research is responsible for assuring the protection of human subjects in compliance with federal law. For this purpose, the Vice Provost has established several Institutional Review Boards (IRB). The University requires that, prior to initiation, all research projects involving humans as subjects must be reviewed by one of the IRBs. This policy applies, regardless of the source of funding and location of the study, to all biomedical and behavioral research involving human subjects conducted by the University's faculty, staff and students. Information issued by the IRB can be found at the Office of Regulatory Affairs.

2.1.2      University Council Committee on Research

 

The University Council Committee on Research is comprised of faculty and students, and the Vice Provost for Research as an ex officio member. The Committee's general function is to facilitate the conduct of research at the University, particularly sponsored research. It also provides a mechanism whereby members of the University community can obtain information and express their concerns about any aspect of University research activities.

2.1.3      Provost's Council on Research

The Provost's Council on Research is comprised of the associate deans of research or other senior research officers of each of the schools and is chaired by the Vice Provost for Research. The Council meets periodically to discuss issues related to the research enterprise and to provide advice on such matters to the Provost and Vice Provost.

2.1.4      Office of Research Services

The Office of Research Services (ORS) reports jointly to the Senior Vice President for Finance & Treasurer and the Vice Provost for Research. ORS exists to implement the research policies of the University and to provide services to the faculty and their schools and departments in administering sponsored projects. An Executive Director who is supported by Directors, Associate Directors, Assistant Directors, Contract Administrators, Research Accountants and other administrative staff, heads ORS. The functions of ORS include the following:

a.       Formulating grant and contract administration policy and procedures for approval and promulgation by the Senior Vice President for Finance and the Vice Provost for Research;

b.      Overseeing the negotiation, execution and administration, of sponsored project grants and contracts throughout the University from inception through closeout;

c.       Assuring timely receipt of and proper fiscal stewardship for sponsor funds;

d.      Negotiating University-wide F&A costs and employee benefit rates;

e.       Assuring University compliance with federal requirements such as effort reporting, cost sharing and service centers;

f.        Maintaining liaison with sponsoring agencies concerning University organization, policies and procedures; representing the University in negotiations with sponsoring agencies to assure consistent contract and grant provisions and policies; resolving problems and settling disputes;

g.       In cooperation with other University offices (see below), assuring compliance with sponsor's policies, e.g., fiscal, property, intellectual property, human and animal subjects;

h.       In cooperation with other University offices maintaining official records concerning sponsored projects including official grant and contract files;

i.         Assisting faculty and department/school staff in the preparation of proposals and other administrative aspects of sponsored projects as needed; and

j.        Training of administrative staff in the policies, procedures and practices of the University and sponsors.

The Trustees of the University of Pennsylvania have authorized the Executive Director, Directors, Associate Directors, and Assistant Directors of ORS to sign contracts, grants and other documents related to sponsored projects. Only these individuals are permitted to commit the University to accept a sponsored project agreement (see Sponsored Projects Policy Nos. 2102 and 2105). Contracts and other award documents signed only by the principal investigator are not binding on the University.

2.1.5      Office of Regulatory Affairs

The Office of Regulatory Affairs (ORA) is charged with administering the review process for approval and use of both human beings and vertebrate animals for research purposes. In this role, ORA provides information and guidance to faculty and others on the regulations governing the use of humans and animals, assists in preparing research protocols for submission to the review committees, provides staff support to the review committees and provides any other services needed to assure compliance with local and federal regulations in this area. ORA maintains all official records of these committees. The Director who is supported by two Associate Directors and other support staff heads the Office.

Protocol review is conducted by committees composed of University faculty, scientific and non-scientific staff and non-affiliated community representatives. The University currently supports 8 Institutional Review Boards for the protection of human subjects in research. Each Committee meets at least monthly. Seven of the IRBs deal with medical research protocols including one IRB at which meets at Pennsylvania Hospital. The other on-campus IRB deals only with social and behavioral research, although expedited or exempt protocols may be handled by all Boards.

 

Animal protocols are reviewed by the single Institutional Animal Care and Use Committee (IACUC). The IACUC also meets monthly to review protocols and to discuss the animal care program. Most protocol review is conducted through a designated reviewer mechanism.

2.1.6      Office of Research Integrity and Compliance

 

The Office of Research Integrity and Compliance is charged with and committed to the education of faculty and staff in research regulatory requirements. It fulfills its mission through education, training and compliance assessment and serves the community as an information clearinghouse.

2.1.7      Center for Technology Transfer

The Center for Technology Transfer (CTT) is responsible for the identification, protection and commercialization of the intellectual property generated by the faculty and staff of the University. In this capacity, the Managing Director of CTT acts as the University Patent and Copyright Officer and is responsible for accepting all disclosures of new inventions and other discoveries. CTT staff evaluates disclosures and works with inventors to develop a strategy to protect the intellectual property and to license the discovery for commercial development. CTT also reviews and approves all Material Transfer Agreements. CTT is responsible for complying with sponsor terms and conditions related to the management of intellectual property.

2.1.8      Business Services, Finance, Facilities Management and Human Resources

Business services for research activities are provided in accordance with standard University practice by the various offices, i.e., Human Resources, Facilities Services, Payroll, General Accounting, and Acquisition Services. Policies and procedures which apply to these support activities may be found on the web under their respective offices.

2.1.9      Dean and Department Chairs

The department chairs have a general responsibility for promoting the scholarly and research activities of their departments, as well as fostering sound stewardship of funds. They review applications for research projects for their appropriateness and transmit those approved through the appropriate dean to ORS, making sure that the personnel, fiscal, and space demands of all such projects are in the best interests of both their department and the University as a whole. School deans have the same responsibilities for their schools.

3         Administrative Policy Considerations

3.1      Corporate Responsibility

Extramurally sponsored projects are made to the University in its corporate name, The Trustees of the University of Pennsylvania. Therefore, awards of funds for sponsored projects are awards to the University and commitments under agreements are commitments of the University. Any work performed by a faculty member of the University under such a project must be considered as work performed for the University.

3.2      Formal Documentation

University policy stipulates that every research agreement be evidenced by a formal document that outlines the research objectives and administrative requirements of the project. Informal (oral) agreements are the personal responsibility of the individual faculty member making such arrangements and may not be binding on the University.

3.3      Authorized Signatures

The Trustees have authorized the Vice Provost for Research, and the Executive Director, Directors, Associate Directors, and Assistant Directors of ORS to sign proposals, grants, contracts or other agreements on behalf of the Trustees. The Managing Director and the Directors of the CTT are similarly authorized to sign documents related to patents, copyrights, and trademarks (see Sponsored Projects Policy Nos. 2102 and 2105). The Director and Associate Directors of the ORA are also authorized by the same trustee resolution to sign documents related to approval of human subjects and animal research.

3.4      Classified Research

The University does not possess a government security clearance and can not as a corporate entity possess classified material. It is the policy of the University not to accept agreements which require access to classified data, require University employees to obtain security clearances, or restrict the dissemination of the results.

3.5      Endorsement of Research Results

Because the University imposes no limitation on the freedom of the faculty in the choice of fields of inquiry or the media of public dissemination of the results obtained, any results obtained and disseminated are the sole responsibility of the principal investigator and do not carry the institutional endorsement of the University. Consequently, the University does not permit the use of its name in advertising or promotional material related to the results of sponsored projects without the prior written approval of an officer of the University. In addition, the University will neither guarantee nor warrant the results of sponsored projects.

3.6      Conflict of Interest

The University Conflict of Interest Policies for Faculty Members as amended by the Financial Disclosure Policy are available at http://www.upenn.edu/research/policies.htm. The policies require all faculty members (as well as any other key individual who has a role in the design, conduct or reporting of a sponsored project) to disclose any financial holdings that may be or appear to be a conflict of interest in the conduct of the proposal if funded.

The Proposal Transmittal and Approval Form which must accompany each proposal contains a certification for this purpose which must be completed before a proposal can be submitted. Externally sponsored research projects conducted at the University should avoid real or perceived conflicts of interest by University employees in the performance of these projects. Principal investigators have a responsibility to insure that the conduct of their projects, and of the project staff, conform to University policy. The Conflict of Interest Standing Committee was established several years ago to review conflict of interest situations and recommend to the Vice Provost for Research ways to eliminate or manage such conflicts.

3.7      Ownership of Intellectual Property

Ownership of any intellectual property developed during a sponsored project, including inventions, whether or not patentable, copyrightable materials, including computer software, and tangible research materials, is governed by the terms of the sponsored research agreement and the University's policies on these issues. For further information, see the CTT's home page http://www.ctt.upenn.edu. For more information on intellectual property developed under the auspices of a clinical trial please contact the Director of Corporate Contracts at ORS.

3.8      Students in Research

Traditionally, graduate students have played a significant role in the conduct of sponsored research. Undergraduate students are also becoming increasingly involved in research activities. For all students participating in sponsored research projects, it is important to assure that the terms of sponsored research agreements will not conflict with a student's academic progress and that students have the right to refuse to participate in a particular project if they so choose. For further information see Guidelines for Student Protection in Sponsored Research Projects. Section III E. at http://www.upenn.edu/assoc-provost/handbook/.

4         Roles and Responsibilities

 

The Guidelines for the Conduct of Sponsored Research were developed in response to concerns raised during the late 1960's about the University's involvement in federally funded research that was classified for security purposes. The Guidelines set forth roles and responsibilities of the faculty and the University, and describe the basic principles underlying all academic research at the University. While they are the result of a reaction to a particular issue, the Guidelines are still relevant today. It should be understood, however, that these Guidelines deal with the academic issues of research and that there are other responsibilities, primarily of a financial nature, which a faculty member assumes when doing sponsored research. Those responsibilities are described in the Faculty Handbook.

4.1      The University and its Faculty

The University imposes no limitations on the freedom of the faculty in the choice of fields of inquiry or upon the media of public dissemination of the results obtained. It is the obligation of faculty members to make freely available to their colleagues and to the public the significant results achieved in the course of their inquiries.

By providing financial support, physical facilities, and especially an intellectual environment conducive to research, the University engenders scholarly inquiry by its faculty. In doing so, the University recognizes its responsibility to the faculty to maintain a research environment in which unrestricted scholarship and freedom of inquiry may continue to thrive.

The University recognizes that its faculty consists of self-motivated scholars and scientists; their participation in scholarly or scientific controversies does not involve the University beyond its general support. Such support is predicated on the University's confidence that its essential functions are best accomplished by freely permitting capable scholars to follow the search for truth wherever it may lead.

An interdependent relationship between the University and the research skills of its faculty becomes manifest whenever the University becomes involved as a corporate entity in the administration of research. In pursuing a policy of encouraging free inquiry the University affirms its reliance on its faculty in all matters of judgment concerning the intellectual merit of a project.

For its part as the beneficiary of gifts and as the recipient of grants and contracts, the University must reserve the right to accept only that support which does not in any way compromise the freedom of inquiry of its faculty, the integrity of its scholarship or its commitment to the policy of nondiscrimination.

In its role as a degree-granting institution, the University views the substantial participation of graduate students in sponsored research as altogether appropriate to its educational mission.

The University administration does not distinguish between research activities which acquire new knowledge and research activities which apply existing knowledge. It leaves the decision of how to balance these two elements to the judgment of those who perform research and their academic supervisors.

4.2      Academic Evaluation of Sponsored Programs

Approval of proposals for grants, contracts and other cooperative agreements by the appropriate department Chairman and/or Dean is an indication that a favorable evaluation for academic merit has been made.

Where research programs lie outside the normal departmental or school structure, the Provost, or a designated member of the Provost's staff, has a special responsibility to assure that an appropriate academic review has been made.

4.3      Administrative Requirements for Sponsored Programs

The following seven conditions must govern any research agreement entered into by the University and a sponsor in order for a favorable evaluation to be made.

1. Open identification of sponsors and the actual sources of funding must be present in the agreement. Exception is made for anonymous sponsorship when in the judgment of the Provost such a condition is not harmful to the University or to the integrity of the research and is essential for the award to be given.
2. Unrestricted dissemination of all findings and conclusions derived from the project must be an integral part of the agreement, except where the privacy of an individual is concerned. The University regards any infringement on complete access to research findings as detrimental to free inquiry. It therefore neither seeks nor accepts security clearance for itself or any administrative unit. The decision whether to seek clearance is an individual one to be made by each faculty member according to his or her judgment. Such decisions will not be influenced or judged in any way by the University and must be made in each instance on the basis that the benefits of clearance balance its academic shortcomings. Exception may be granted by the Provost for privileged information but only in the form of a delay in the release of such information. The delay will only on rare occasions exceed three months.
3. The resources or data sources on which research is wholly dependent must be free of control by the sponsor. The University views such control as incompatible with free inquiry and encourages acceptance of this condition only when no alternative source exits. Exception may be granted by the Provost for projects which are conducted abroad and subject to the legal restraints of foreign governments and their agencies.
4. No conditions may be attached to the gift, grant or contract that would in any way jeopardize the University's commitment to the principle of nondiscrimination on the basis of race, color, sex, sexual or affectional preference, age, religion, national or ethnic origin or handicap.
5. Academic appointments made with the support of gifts, grants, or contracts shall be made only in accord with established University procedures. A sponsor shall not ordinarily participate in the selection of persons to work on a project, and individuals employed by the University shall not be excluded by a sponsor from participation in a project for any reason other than when necessary because of insufficient competence or when required to protect privileged information.
6. No financial obligations by the University in the present or any time in the future can be implied other than those stated in the contract. When uncertainty exists in his judgment, the Provost or a designated member of the Provost's staff shall consult with appropriate officers of the University to assure that this condition is met prior to the final approval of the agreement.
7. The University relies primarily on the discretion of its faculty to limit the commercial aspects of research sponsorship, such as advertising and publicity. Contracts must not allow the use of the University's name for commercial purposes unless such use has been specifically approved by the President of the University. Agreements must not permit the names of University investigators to be exploited for advertising purposes or permit reprint distribution to be made part of a publicity campaign.

4.4      Administrative Review of Sponsored Programs

 

Approval by the Provost or a designated member of the Provost's staff indicates that the evaluation of compliance with the University's administrative requirements has been favorable.

a.       Grants and contracts which in the judgment of the Provost have features which pose potential embarrassment to the University or raise serious non-technical questions of compliance with this policy will require further review. This review is to be accomplished by the Council Committee on Research.

b.      Concurrently with the call for consultation, notice of the project shall appear in the Almanac.

c.       Failure to conform to the Guidelines is expected only on rare occasions marked by special circumstances, such as the exceptional public need of a national, regional or local emergency. On these occasions it is required that the President of the University in consultation with appropriate faculty shall give approval to such action. Approval by the Provost or a designated member of the Provost's staff indicates that the evaluation of compliance with the University's administrative requirements has been favorable.

4.5      The Business Administrator

The Departmental or School business administrator (BA) is responsible for the administrative aspects of a sponsored project and is a key individual in the management of the project. While the University places the prime responsibility for the conduct of the sponsored projects in all its aspects on the Principal Investigator (PI), it is the business administrator who will be the most involved in the day-to-day operations of the project. Therefore, it is imperative that the PI and the BA interact closely and frequently, at least on a monthly basis, to review and discuss financial and administrative matters (see Sponsored Projects Policies Nos.2106 and 2110).

Managing a sponsored project efficiently requires close coordination between the BA and PI. The BA must ensure the following:

a.       A copy of the award notice and the Account Information Sheet is provided to the PI;

b.      Understand the sponsor's restrictions on costs and discuss with the PI;

c.       Awards and their budgets are created accurately in the University's financial systems in accordance with the approved award;

d.      Awards are monitored on a monthly basis;

e.       Charges to awards are appropriate;

f.        F&A cost rates are being accurately charged against the direct cost budget;

g.       Discuss with the PI reporting obligations and schedule;

h.       Subawards and sub-accounts are managed. This involves working with Research Services on issuing the subaward, establishing the Purchase Order, and along with the PI, monitoring subrecipient expenditures and work;

i.         Cost sharing is planned, documented, and accounted for;

j.        Discuss with the PI any special award requirements. For example, the award may have been made on a fixed-price basis or may specify special deliverables;

k.      With the PI, jointly plan the project close several months before termination. No-cost extensions must be requested before the end date; and

l.         That the PI confirms the accuracy of Effort Reports.

5         Preparation of Proposals

5.1      Introduction

The submission of a proposal is the usual manner of approaching potential sponsors for support of research or other projects. Writing proposals in a manner which clearly defines the ideas, concepts and solutions, as well as the problem, and states the advantages or benefits to be gained as a result of the efforts proposed, is an important task. The burden of proposal writing rests with the faculty member who will be designated as the principal investigator or project director and who will be responsible for the project upon award. Prior to preparation of a formal proposal there is a considerable amount of preliminary work which should be accomplished to avoid unnecessary effort.

5.2      Relevant Sponsored Projects Policies

 

The following Sponsored Projects Policies are of direct relevance to the preparation of sponsored projects proposals:

 

2101 Administration of Sponsored Projects

2102 Approval of Proposals

2103 Administration of Clinical Trials

2111 Unallowable Costs

2116 Facilities and Administrative (F&A) Costs

2119 Cost Sharing/Matching Requirements

2131 Compliance with Subrecipient Standards of OMB Circular A-133

2135 Monitoring Subrecipients Not Subject to OMB Circular A-133

2136 Principal Investigator Eligibility

2138 Direct Cost Expenditures for Non-Federal Organizations

5.3      Preliminaries to Proposal Preparation

Roughly develop the proposed project, its scope, methods and objectives, to the point where personnel, equipment, facility and other support requirements can be estimated. If appropriate, discuss these plans with the department chair in order to assure consistency with departmental objectives and availability of necessary resources. This may also require discussions with the dean of the school, and, if the project is interdisciplinary, with other department chairs and school deans.

Frequently, the principal investigator may have informal contact with representatives of an outside sponsor to explore the possibility of receiving the sponsor's support. While such contacts are encouraged, no commitments binding the University may be made until a formal proposal has been processed and approved by ORS.

5.3.1      Sponsored Research Agreements with Commercial Entities

 

ORS has developed a standard Sponsored Research Agreement (SRA) and Collaborative Research Agreement (CRA) for use with industry which can be found at ORS Forms and Agreements. Principal investigators are urged to provide a copy of the SRA to their industry counterparts when initially discussing possible research collaborations. Universities and industry have very different views on certain matters such as publication of research results and ownership of inventions, and it is important to set forth the University's policies on these matters at the outset. ORS has developed a Handbook for Negotiation of Sponsored Research Agreements (ORS Forms and Agreements) that aids in discussions with commercial sponsors.

 

The purpose of this Handbook is to serve as a resource and guide for negotiation of SRAs at the University of Pennsylvania. The various terms and conditions found in the standard SRA, as well as the underlying polices, as described in detail. The Handbook is a useful guide for handling negotiations with other types of agreements since the same issues (publication, confidentiality, intellectual property, indemnification, payment, etc.) will often appear. In addition, alternate contract clauses are included to cover certain specific situations, which may arise in negotiations.

 

Negotiations of SRAs should consider the various stakeholder groups involved in the process. The interests and needs of the University from the perspective of a non-profit, tax-exempt research and educational institution, with a mission of public service are to be contrasted with the commercial, for-profit goals of the corporate sponsors. Yet, the SRA is beneficial to both in the resulting research collaboration: Faculty learn about industrial technologies, their research receives substantial support, and they contribute to the development and transfer of technologies that benefit the public. In addition, sponsors gain access to the expertise of the faculty and facilities of the University.

 

In preliminary proposal discussions, it is best to refrain from delving into budget details any more than necessary to define the general or tentative cost of the project. In estimating the total cost, be sure to include both direct and F&A costs at the current federally negotiated research rate (Sponsored Projects Policy No. 2116).

 

It is helpful if ORS is made aware of informal proposals or correspondence being exchanged with potential sponsors. This may be accomplished by sending information copies to ORS. This is particularly true when large or complex projects are being discussed or there are unusual aspects to a proposal which may require University consideration prior to approval.

5.4      Research and Project Proposal

5.4.1      General Requirements

The requirements for content and format of proposals differ markedly among the various sponsoring agencies. Some require the use of preprinted agency forms; others will accept a proposal in any format as long as it presents all of the required information. Many sponsors make their proposal guidelines and forms available electronically; see the ORS website at: ORS Sponsor Links. Other sponsors should be contacted prior to writing the proposal. Whatever its form, the proposal document is a communication instrument which will be evaluated by the proposed sponsor to determine whether or not the project merits support.

5.4.2      Content of Proposal

The principal investigator is responsible for the technical content of the proposal and for compatibility of the proposed research with his/her other professional duties. It is important to remember that if a project is funded the sponsor will expect the work to be carried out substantially as proposed with any significant deviations requiring prior approval. Some sponsors impose strict page, font, and characters per inch limitations and will not accept proposals that exceed them.

What is important will vary from proposal to proposal but generally, every proposal should include the following:

• Title page

Unless a specific format is supplied by a sponsor, the following format should be used:

a.       The name of the entity to which the proposal is being submitted

b.      The name of The Trustees of the University of Pennsylvania

c.       The title of the proposed project

d.      The name of the principal investigator and any co-investigators, with the school and departmental affiliation of each

e.       A place for the principal investigator's signature, a place for the signature of an authorized University official, (e.g. the Executive Director, Directors, Associate and Assistant Directors, ORS)

f.        The date of submission, and the proposed project period

Certain standard information about the University, e.g., legal name, taxpayer identification number, DUNs number, can be found on the ORS web site under Penn Data for Proposals should the sponsor require these items.

• Technical abstract

Depending on the scope and complexity of a project, an abstract may be of assistance to a prospective sponsor. The technical abstract should be a condensed version of the project, usually no more than 200 to 250 words. State concisely the significance of the project, what is expected to be accomplish and how, and the period of performance of the project. The abstract is extremely important in creating a favorable first impression of the proposal.

• Table of Contents (Optional)
• List of Tables (Optional)
• List of Figures (Optional)

• Introduction

The introduction, or statement of need, emphasizes the importance of the project. The proposal should be set within a background framework of previous related research and have a theoretical orientation. The relationship of the project to the interests of the funding agency may be stressed tactfully. The introduction sets forth the focus of the proposal.

• Objectives

The problem should be stated as specifically as possible and should be related to the background information provided. The importance and rationale of the proposed research should be well specified. It is important that the objectives, both general and specific, are well conceived. If they are poorly defined, it may be found that the timeframe is unrealistic or that the budget is inadequate.

• Methods and Procedures

This section details how the research will be carried out. The procedures may be written in several different ways: by activities tied to specific procedures, by functional categories such as planning, development, and implementation, or by major time blocks.

If the procedural section takes up an undue number of pages, the narrative can be reduced considerably through the judicious use of appendices, tables, and illustrations. If the agency limits the number of narrative pages, these devices can be particularly useful. Be mindful, however, that some sponsors have limitations on use of appendices and what they may contain. Although requests for equipment are usually described in a separate section, additional justification for unusually expensive or specialized equipment can be stated in this section to reinforce the budget request.

• Dissemination of Findings

While projects generally result in published papers in professional journals, many agencies require additional means of disseminating the results of the research. A statement of how this is to be done should be included. Note: for example, the NIH requires a specific data sharing plan for applications of over $500,000 per year (see GPS--Availability of Research Results).

Some projects may require inclusion of a plan for evaluation of the success or progress of the project.

• Equipment and Facilities

Most proposals should include a section on equipment and facilities available to the research project. It is extremely important that major items of equipment which are being requested are clearly identified and their need described.

• Budget

The principal investigator must estimate with reasonable accuracy the costs of performing the research and provide adequate justification and documentation of those costs. The business administrator should provide assistance in preparing budgets and should be consulted well before a proposal is due. Personnel in ORS are available to assist and/or advise the principal investigator and the business administrators in preparing the budget. For more details regarding proposal budget preparation see the section on Preparing Proposal Budgets.

• Biographical Data

These data should be submitted with every proposal to indicate the background, areas of interest, research capabilities, and publications of the principal investigator and other professional investigators.

• References

Proposals should include a list of references to pertinent literature in the field. The list should be as current as possible at the time the proposal is prepared, and should cite the most recent advances in the field.

• Appendices

Appendices may be used to indicate data of peripheral benefit to the research, e.g., reprints of articles, subaward data, letters of support, tabular data, and graphs. The use of appendices is recommended, particularly when a sponsor limits the length of the proposal to a specified number of pages.

• Certifications

Federal agencies require a number of representations and certifications from the University which must accompany each proposal. Some agencies such as NIH and NSF have incorporated these in their forms while others such as DOD, NASA, DOE and EPA have separate certification forms which must be completed by ORS.

5.5      Preparing Proposal Budgets

Preparation of the budget is an important part of the proposal preparation process. Sponsors and peer reviewers are responsible for comparing the level of funding requested to the work proposed. Therefore, the budget section of the proposal should reflect, as accurately as possible, the funding needed to carry out the project.

5.5.1      Direct Costs

5.5.1.1       Salaries and Wages

To determine total salaries and wages, list the percentage of effort to be spent by each person including technical and clerical assistants (when necessary and allowable, see Sponsored Projects Policy Nos. 2110 and 2138) who will work directly on the project. Effort should be shown in terms of percentage of full-time effort or in person-months. For individuals paid on an academic year basis, show a breakdown between academic year and summer effort.

PI's may not budget any individual in excess of 100% of effort, including all sponsored projects, clinical, instruction and other University activities.

It is important to consider each individual's other commitments to other sponsored projects since most sponsors will review an individual's total committed effort to funded and pending project support.

Sponsored activities may not result in any employee receiving compensation at a rate in excess of his/her authorized salary.

Some sponsors, such as NIH, the Department of Defense, and the Commonwealth of Pennsylvania place a limit on the rate of salary reimbursement permitted (click here for the current NIH rate and how to calculate the effect of the limit). In such cases, the difference between the committed effort and salary paid must be borne by the department or school (except for summer salaries).

The federal government will not normally pay the salaries of clerical and administrative personnel since they are included in the F&A costs. However, for certain types of projects and from non-governmental sponsors, such costs may be justifiable. Investigators should make every attempt to recoup these costs (see Sponsored Projects Policy Nos. 2110 and 2138).

Compensation levels and new job classifications must conform with the University Personnel Classification Guide. Include budget incremental increases for professional and nonprofessional personnel on proposals extending more than one year. If specific incremental increase figures are not available, estimate the increase at 3% per year.

As discussed below, some sponsors require a financial contribution to a project by the University which is known as cost sharing. This is often accomplished through uncompensated effort by the principal investigator contributed to the project. Cost sharing offered in a proposal either in the budget or in the narrative of the proposal is a binding commitment if the project is funded. The University will be held accountable for all effort proposed. The University discourages voluntary cost sharing of any kind (see Sponsored Projects Policy No. 2119).

5.5.1.1.1   Postdoctoral Compensation on Research Grants

 

In general, the tax treatment of compensation and the applicability of employee benefits to postdoctoral researchers is dependent on specific circumstances and the nature of services performed or expected. Consult the Tax Office website for more definitive information. Note that unless the terms of an award specifically require otherwise (e.g., NIH Training Grants or individual fellowship awards) stipends (i.e. compensation for which no service is required) cannot be charged to research grants.

5.5.1.2       Employee Benefit Costs

Employee benefit costs are the University's share of contributions to social security, unemployment insurance, group medical coverage, retirement, etc. Employee benefit rates are calculated as a percentage of employee salaries and wages, and are negotiated annually between the University and its cognizant federal agency. Calculate the employee benefit budget line using current rates for the University fiscal year period. Note: The Employee Dependent Tuition Benefit is not allowable on Federal awards. ORS periodically issues bulletins to department business offices with the latest rates. See the ORS homepage under Penn Data for Proposals or call ORS (Ext. 8-7293) to obtain the latest information.

Do not use the EB rates published by the University's Office of Management and Budget for the computation of EB costs on federal applications. These rates are for internal budget purposes. According to the University's federally negotiated EB rate agreement, the last negotiated EB rate must be used in the calculation of future year rates until otherwise negotiated by ORS.

5.5.1.3       Graduate Research Assistants

Salaries/stipends for Graduate Research Assistants/Fellows (i.e., graduate students) should not be budgeted to include employee benefit costs unless a summer appointment is contemplated. For further information consult the Tax Office website. The maximum use of Graduate Research Assistants (graduate students) is encouraged. The budget support should be shown as two separate items:

• Graduate Research Assistant Salary/Stipend
• Tuition charges
• For graduate students supported on sponsored research grants and contracts, the proposal budget should include one-half of the tuition. The University provides the other half as a tuition subsidy. See the document "Policy on Graduate Research Assistant Tuition" for details.
• Graduate students supported by training grants, fellowship awards, or funds other than sponsored research accounts are not eligible for this subsidy.

The salary/stipend item must be included in the Modified Total Direct Cost (MTDC) [see the section on Facilities and Administrative Costs (formerly Indirect Costs or Overhead)] when calculating F&A cost in research proposals.

Tuition charges should be listed under "Other Direct Costs" and are excluded from the Modified Total Direct Cost for F&A cost calculations.

The portion of the tuition paid by the University may be shown as cost sharing. However, be sure to consider an individual student's status, i.e., taking courses or on dissertation, in calculating the tuition amount. If the University commits to cost sharing at full tuition and a student goes on dissertation status at some time during the project there may be a problem meeting the cost-sharing obligation.

5.5.1.4       Consultants

The use of paid consultants may be justified when the project calls for expertise of a well-defined nature for a fixed period of time. By definition, consultants are not employees of the University. Consultants should be budgeted only for tasks where on-campus expertise does not exist or is not readily available.

Normally, consultants are paid a fee plus travel and other expenses. Some sponsors do not permit payments to consultants and some restrict or limit such payments. If in doubt as to the allowability of or rates paid to consultants, check the sponsor's program literature or contact ORS (for example, see NSF Daily Rate of Pay).

On rare occasions University employees from other departments may act as consultants on a project. These types of "consultants" should be included in the salaries and wages portion of the budget and, consequently, included in the base for calculation of employee benefits. See also the University policy on internal consulting in the "Handbook for Faculty and Academic Administrators"

5.5.1.4.1   Proposal Requirements for Use of Consultants

Principal investigators are expected to anticipate and indicate the need for consultants in grant applications or contract proposals. The proposal should therefore include the following:

* Consultant name

* Description of services to be provided

* Number of days of anticipated consultation

* Expected rate of compensation, travel, per diem, etc.

* Curriculum vita for the consultant

In addition, many sponsors require a letter from the consultant confirming their role in the project.

It is incumbent upon PIs to ensure the following conditions are met when considering a consultant:

* The services the consultant will provide are essential to the project and cannot be provided by persons receiving salary support under the grant or contract or who are otherwise compensated for their services;

* A selection process has been employed to secure the best-qualified consultant available to perform the required tasks;

* The fee is commensurate with the qualifications of the consultant and the nature of the services rendered; and

* The consultant meets the requirement of an independent contractor as defined by the Internal Revenue Service and the City of Philadelphia (if the work is performed within City limits). For further information visit the following site: www.finance.upenn.edu/comptroller/tax.

If you wish to engage University employees from other departments on a project, they must be included in the salaries and wages portion of the proposed budget and, consequently, included in the base for calculation of fringe benefits.
(See the University policy on internal consulting (see "Policy for Extra Faculty Compensation" in the Handbook for Faculty and Academic Administrators).

5.5.1.5       Travel

Most sponsors will pay reasonable and necessary travel costs if requested. Reimbursement for travel expenses is subject to University policies and sponsor regulations. Many sponsors request specific data on each proposed trip, including destination, transportation costs, number of days of travel, and purpose of each trip. "Domestic" and "foreign" travel should be separately identified and budgeted. "Domestic" travel includes trips within the U.S. and Canada. On federally funded projects all foreign travel, including that which is cost shared, should utilize US flag air-carriers when ever possible and regardless of cost or convenience. These costs need to be fully justified in the proposal budget and any exceptions to the "Fly America Act" requirements can only occur under exceptional circumstances and must be documented in advance.

In most cases, the current University policy on allowable travel costs should be used for budgeting purposes. (See the Travel Office homepage). Special per diem rates may be specified by federal sponsors particularly under contracts.

5.5.1.6       Non Expendable Equipment

Non expendable equipment is defined by the University as personal property having a unit acquisition cost of $5000 or more and a useful life of one year or more (see Accounting Policy No. 1106.0). Items having a unit cost of less than $5000 should be budgeted as "Expendable Supplies and Minor Equipment."

Budget all equipment needed to perform the proposed tasks (including estimated freight and installation) that is not available to the investigator from University resources. Most sponsors will not support the purchase of general purpose equipment, such as office furniture and equipment, laboratory furniture, computers, etc. Sponsors expect the University to provide the basic laboratory and administrative working environment.

List each specific item in the budget, justify the need for the equipment and provide information on how the amount requested was derived, i.e., catalogue prices, quotes or bids. In some cases, doing so will avoid the need to receive sponsor approval when required.

5.5.1.7       Expendable Supplies and Equipment

 

A research project will usually consume expendable supplies and minor equipment such as laboratory items, teaching materials, animals, laboratory notebooks, etc. A reasonable amount should be budgeted for these items. Note: Office supplies are not normally allowable under federal awards unless specifically requested and justified.

5.5.1.8       Publication Costs

Budget the anticipated cost of publishing the results of the research, keeping in mind that page charges may vary from journal to journal. Consider both page charges and reprint costs. It is important to justify the need for these costs since many sponsors are arbitrarily deleting them.

5.5.1.9       Subrecipients and Consortium Agreements

When investigators from another organization participate in the research, the cooperating institution or subrecipient, as it is known, must provide a sub-proposal. A subaward or consortium agreement is required whenever a substantial portion of the research will be performed at another institution. For further information, see Sponsored Projects Policies Nos. 2131 and 2135.

The subrecipient's proposal (i.e., the sub-proposal) must contain, at a minimum, the following:

* Statement or scope of work

* Budget

* Period of performance

* Signature of a representative authorized to contractually commit the institution

* Negotiated F&A Cost Agreement if not already on file at ORS

The subrecipient's budget should include applicable F&A costs. The subrecipient should also provide its Federal Employer Identification Number and required certifications.

The PI must submit a statement disclosing any direct or indirect financial interest in the subrecipient's organization (see Conflict of Interest Policies , the Faculty Handbook and the Policy on "Purchases from Related Parties").

The sub-proposal is then incorporated into Penn's primary proposal. A list of the subrecipient's total costs should be included in the Subaward, Consortium/Contractual or Other Direct Costs categories of Penn's budget depending on the sponsor's requirements. The first $25,000 of subrecipient costs will be included in Penn's base for F&A costs. [Note: With the exception of non-governmental sponsors (see the section on Accounting Procedures for Non-Federal Sponsors and the F&A Costs of Sponsored Projects ) this charge is taken only once in the life of a project or competitive segment; thus, once $25,000 in direct costs have been paid on a given subaward, no further F&A costs will be assessed in subsequent years.]

The technical section of the proposal must include a statement explaining the need for a subaward and the method(s) used to select the subrecipient. Many sponsors require the subrecipient's budget be appended to the proposal.

Research Services' review of the primary proposal will include an assessment of the sub-proposal. In addition to evaluating the subrecipient's budget and legal standing, Research Services will consider such matters as the subrecipient's integrity, record of past performance, financial and technical resources, and avoidance of conflict of interest as it relates to Penn's investigators. For further information, refer to Sponsored Projects Policies Nos. 2131 and 2135.

5.5.1.10   Goods and Services Contracts

 

Proposals which contemplate the purchase of services such as surveys or routine analytical services must incorporate the full cost of the contemplated services in the budget. In addition, the full cost of the service contract must be included in the MTDC on which F&A costs are calculated.

5.5.1.11   Other Direct Costs

Other legitimate direct costs may include project related costs for copying, long distance telephone calls, postage, equipment maintenance, reference books and materials (not available in the department or University libraries), library search services, graduate research assistant tuition, etc. (See Sponsored Projects Policy Nos. 2110 and 2138).

5.5.2      Representations and Certifications

 

For some proposals, special representations, certifications and acknowledgments may be required. ORS will complete these forms. As mentioned previously many sponsors have their proposal forms, including budget forms, available electronically. See Links to Sponsors and Agencies.

5.5.3      Facilities and Administrative Costs (formerly Indirect Costs or Overhead)

5.5.3.1       Federal Sponsors

Facilities and Administrative (F&A) costs, also called overhead or indirect costs, reimburse the University for laboratory and office space, utilities, administrative services (e.g., Purchasing, Accounting, Research Administration, Human Resources, Security), Custodial Services, and building, grounds, street and parking lot maintenance. In other words, they include those things essential to support sponsored activities which cannot be specifically identified and directly charged to a specific research grant or contract.

F&A cost percentages are determined periodically from actual cost records through a detailed cost accounting procedure and are audited and approved by the federal government. Full F&A costs should be charged on all projects, the only exceptions being for those sponsors that have a published policy that limits indirect cost recovery. Any exceptions to full F&A cost recovery must be approved by the relevant dean or his/her designee and ORS (see Sponsored Projects Policy No. 2116.

Current rates for F&A costs are listed on the ORS web site under Penn Data for Proposals and are shown as a percentage of Modified Total Direct Cost or MTDC. The F&A amount is calculated by multiplying the modified total direct costs (MTDC) by the F&A rate.

The MTDC is determined by subtracting the following costs, if any, from the total direct costs.

* Capital Equipment (any non-expendable equipment estimated to cost $5000 or more and with a useful life or one year or more);

* The amount of each research subaward in excess of the first $25,000;

* Patient care costs related to "standard of care" (the cost for in-patient or out-patient care, but not payments to human subjects);

* Alterations or renovations of facilities;

* Graduate research assistant tuition costs charged directly to the project.

An off-campus F&A cost rate is available for those projects which are performed in non-university owned space for a continuous period in excess of four months and for those specifically identifiable portions of a sponsored project that will be carried out off-campus.

 

If a project is carried out in space leased by the University and the rent is not charged to the grant or contract the on-campus rate prevails.

5.5.3.2       Non-Federal Sponsors

 

Since many of the University's non-federal sponsors, (commercial entities, foundations and associations) do not reimburse Penn for F&A costs at the negotiated federal rate, and some do not reimburse for any F&A costs, the University has changed its accounting practices in order to recover more of these costs.

 

According to Sponsored Projects Policy No. 2116 commercial entities are expected to reimburse the University at the full federal negotiated research rate.

 

There are many foundations and associations that are willing to pay the direct costs of a project and also a reasonable share of the administrative costs associated with the funded project. In order to enable schools and centers to more fully recover the costs associated with the conduct of research, the University has instituted a series of changes to its procedures to enable recovery of some of these costs. These procedures are designed to provide consistent charging and accounting practices for certain direct and F&A costs, or supporting expenditures to non-federal grants and are detailed in Sponsored Projects Policy No. 2138 and the section on Accounting Procedures for Non-Federal Sponsors and the F&A Costs of Sponsored Projects.

5.5.4      Cost Sharing

Some sponsors require the University to contribute to the cost of the project and will require a financial accounting of the University's contribution. In addition to such mandated cost sharing, any contribution to a project included in the proposal, either in the budget or the text will be considered voluntary committed cost-sharing which the University must document. The University budget(s) to which such cost sharing will be charged must be identified prior to approval of the sponsored project budget.

University contributions in terms of personnel effort and the associated employee benefit costs, other direct expenses and the F&A cost calculated on these expenses at the approved University F&A cost rate can be shown as cost sharing. Any difference between F&A costs at the sponsor limited rate and the University's negotiated rate can also be used as cost sharing if permitted by the sponsor. The University discourages cost sharing unless mandated by the sponsor. All proposed cost-sharing must be approved by the responsible Chair and Dean. For further information on cost sharing see the ORS Cost Sharing Form and Sponsored Projects Policy No. 2119.

5.6      University Review of Proposals

Compliance with the University's established policy for the submission of proposals to potential sponsors is the responsibility of ORS. Therefore, all formal proposals must be routed through and approved by this office prior to submission to the prospective sponsor (see Sponsored Projects Policy No. 2102).

In order to assure that the proposal is processed in a timely manner, it should reach ORS well in advance of any established deadline for submission. Submission at least five days in advance will assure timely submission.

5.6.1      Requests for Proposals and Requests for Applications

 

Requests for Proposals (RFPs) and Requests for Applications (RFAs) frequently contain proposed contract or grant terms which may conflict with University policies, e.g., limitations on publication, ownership of intellectual property. In order for ORS to be able to review the RFP or RFA in time to avoid delays in proposal submission, a copy of the RFP or RFA should be provided to ORS at least 5 working days before the proposal deadline. Use of e-mail or fax (898-9708) for this purpose is encouraged.

5.6.2      Proposal Signatures

Sponsors require the original of each proposal to be signed by the PI and by an official authorized to sign for the University as defined in the section of this Handbook entitled, University Organization for Research Administration. The signature of the authorized official accepts the obligations imposed by the requirements and conditions for any grant or contract, including applicable federal regulations. Should the sponsor additionally require the endorsement of the department chair or other senior academic official, such requirement will generally be indicated in the application instructions.

5.6.3      Deadlines for Proposals

The University review process which is outlined in this section takes time. Therefore, in those cases where there is a sponsor established deadline date, a proposal should be submitted to ORS, at least five working days prior to the deadline date. ORS will review proposals for which the scientific or technical portions are still in draft provided that the budget has been finalized, no significant changes will be made, that no cost sharing will be embedded in the body of the proposal, and that it has been approved by the appropriate department chair(s) and dean(s).

Proposals will normally be processed in order of receipt. Exceptions may be made for proposals with impending deadlines.

It is the responsibility of the PI to ensure that a proposal reaches the sponsor in time to meet any established deadline. A final copy of the proposal must be provided to ORS.

5.6.4      Electronic Submission of Proposals

A number of sponsors require electronic submission of proposals. The NSF requires that all proposals be submitted electronically via FastLane. Additional information on FastLane is available on the NSF web page at https://www.fastlane.nsf.gov/a0/about/10steps.htm.

The electronic proposal submission process can be demanding, particularly the first time a principal investigator uses it. Prior to the first submission of a proposal using any form of electronic proposal submission, the principal investigator MUST contact ORS to get initiated to use the process. In addition, the principal investigator may need to have Adobe Acrobat and PDF capability on his or her computer.

Some things to keep in mind when doing electronic proposals: the first submission will probably take longer than the normal process. For every electronic submission, ORS needs a fully signed Proposal Transmittal and Approval Form. There can be major problems getting access to an agency's server on the day of a deadline. ORS must approve the proposal before it can be submitted, so allow time for its review and approval (see Sponsored Projects Policy No. 2102.) ORS reviews a very large volume of applications at deadline dates. Therefore it is imperative to submit applications well before the deadline to allow for sufficient review. Failure to do so may jeopardize the timely submission of the application.

The Office of Naval Research and the NIH are developing and testing electronic proposal submission processes, and a major government-wide effort is under way to develop a Federal Commons submission capability which will standardize electronic submissions to federal agencies.

5.6.5      Required Copies of Proposals

The number of copies of proposals required by sponsors varies. In addition to the copies to be submitted to the sponsoring agency, one copy is required for the official file maintained by ORS. The PI should review available proposal instructions or contact ORS to determine the number of copies required by the proposed sponsor. Note: ORS does not make copies of proposals. This is the PI's responsibility.

5.6.6      Multiple Solicitations

Multiple solicitations, that is, the submission of the same proposal to two or more sponsors, may be made provided this fact is clearly disclosed in the text of the proposal. However, some agencies may not accept proposals submitted to other potential sponsors.

5.6.7      Proposal Transmittal and Approval Form

This form must be prepared by the principal investigator or his/her business office. The Proposal Transmittal and Approval Form is for internal use only and is not submitted to the sponsor.

The form should be attached to the top of the original copy of the proposal and will serve as a routing/signature sheet for each review level. Note: Interdepartmental or inter-school participation requires approval of each department and school involved in the project.

5.7      Review and Approval Channels

The principal investigator must channel his/her proposal through a series of officials whose review and approval are required before it is submitted to the sponsor. Their review will be concerned with:

1. the substance and merit of the proposal, including the academic appropriateness and desirability of the proposed research or other sponsored activity;
2. commitments of faculty and staff time and the possible effects on the teaching and other obligations of the personnel involved;
3. salary arrangements, e.g., reimbursement of appropriate academic year salaries and provision for summer support;
4. requirements for space and facilities;
5. the budget, especially a verification that all costs, including F&A costs, are provided for, that all needs are realistically estimated and stated, that items included are not contrary to the policies of the University or the sponsor, and that funds are available when a University contribution is included and required by the sponsor;
6. the identification of special conditions requiring further review, such as use of human subjects, animals, biohazards, radioactive materials, radioactive drugs, intellectual property concerns, etc.; and
7. the disclosure of any potential financial conflicts of interest of the PI or any other person responsible for the design, conduct or reporting of the proposed project.

Here, in order, are the steps by which a proposal is processed:

Department Chair

Approval by the chair constitutes endorsement attesting to the academic purposes of the proposed research or other sponsored activity, its departmental compatibility, and its appropriateness in the context of budget, the time available to the faculty member to carry out the project and the availability of space and research equipment. If approved by the chair, the proposal is then submitted to the dean of the school for review and approval.

Dean

 

The dean's review relates to the substance and merit of the proposal as well as the budget, the salaries and employment of present and proposed personnel, and any other aspect of the proposal which may affect the teaching, research, and use of space and facilities of the school and the University. The dean's approval of less than the negotiated F&A rate indicates his/her acceptance of reduced F&A cost recovery to the school. Having been approved and endorsed by the dean, the proposal is transmitted to ORS.

 

Office of Research Services

 

The purpose of review by ORS is to determine that the proposal complies with University and sponsor policies, that the proposal is complete, and that approvals are in order. ORS will see to it that unusual requirements are met or brought to the attention of the Vice Provost for Research. At this point, proposals that are routine and present no policy or procedural problems are signed for the University and submitted. The official (complete) University file copy is retained in ORS.

 

Vice Provost for Research

 

Proposals that appear to deviate from University policy are submitted by ORS to the Vice Provost for Research for review. If the Vice Provost finds the proposal acceptable, it is approved and returned to ORS for submission to the sponsor. If questions exist as to possible noncompliance with University policy, the Vice Provost will refer the proposal to the University Council Committee on Research for review and recommendation.

 

University Council Committee on Research

 

When a proposal is referred to this Committee, its review must be completed and its recommendations received before any commitments, formal or informal, can be made for University participation in the project. Review by the Committee shall be limited to questions of conformity with established University policy and in no circumstances will the validity or soundness of the subject matter of the proposed project be considered.

 

5.8      Proposals Requiring Special Review

While preparing a proposal, it is important to keep in mind that certain special reviews and approvals may be necessary to ensure compliance with University and sponsor requirements.

The review and approval procedures listed below are mandated by federal statute and/or regulations. Violations can lead to loss of federal and nonfederal support. University policy requires these reviews for all projects, sponsored or unsponsored.

5.8.1      Human Subjects Review

Proposals calling for the use of human subjects must be reviewed by one of the University's Institutional Review Boards. Human subjects reviews and approvals must be obtained either before the proposal is submitted or before a deadline set by the sponsoring agency. In the case of applications submitted to the NIH, University human subject approval may be obtained "just-in-time" before the award is made. Nevertheless, the PI must take into account the time necessary to obtain final approval from the Office of Regulatory Affairs. No award will be established by ORS unless the human subject protocol has been approved. Human subjects "Guidelines" are available from the Office of Regulatory Affairs.

5.8.2      Animal Care Review

Proposals involving the use of vertebrate animals must be reviewed by the Institutional Animal Care and Use Committee (IACUC). Committee approval is required before the award is established or before a deadline date set by the sponsoring agency. In the case of applications submitted to the NIH, Committee approval may be obtained "just-in-time" before the award is made. ORS will not establish an award unless the Animal Care and Use protocol has been approved. Animal care and use "Guidelines" are available on the Office of Regulatory Affairs web site.

5.8.3      Biohazards Safety Review

Proposals for activities involving the use of recombinant DNA techniques or use of infectious agents, teratogens, mutagens, and carcinogens must be reviewed by the Biohazards Safety Committee. In addition, the use of certain biologic agents (Select Agents) is strictly regulated by law. Information and questions concerning the use of biohazardous materials should be directed to the Office of Environmental Health and Radiation Safety.

5.8.4      Investigational Drug and Device Testing

Investigational drug and device testing protocols must receive the approval of one of the Institutional Review Boards. Studies requiring a submission to the FDA also require review and consultation with the Office of Human Research. For information, contact the Office of Regulatory Affairs.

5.8.5      Radiation Safety

The use of radionuclides and radiation producing equipment at the University is under the surveillance of the Radiation Safety Committee. The Environmental Health and Radiation Safety Office should be contacted for advice and information.

5.8.6      Radioactive Drug Research

The research use of radioactive drugs is to be referred to the Radioactive Drug Research Committee for clearance. Guidelines are available on the Office of Regulatory Affairs web site.

5.8.7      Conflict of Interest Disclosure

 

Each Investigator (including any other person responsible for the design, conduct or reporting of the sponsored project, or their spouses or dependent children), involved in the proposed project must disclose (Financial Disclosure Form) to the Conflict of Interest Standing Committee (CISC) at the time of application any Significant Financial interests that would reasonably appear to be affected by the activities to be funded (see the Financial Disclosure Policy for Research and Sponsored Projects) and related Penn Research Policies. Investigators must also disclose any financial conflicts of interest if they are proposing work involving human subjects research.

 

5.8.8      Clinical Trials

Clinical trials are a specialized field of applied research designed to assess the safety and efficacy of new drugs, devices, treatments or preventive measures in humans by comparing two or more interventions or regimens. Private companies or the federal government may sponsor such trials, or they may be carried out without external financial support. The scope of work, known as the protocol, may be designed by the sponsor, with or without input from the principal investigator, or it may be designed solely by the principal investigator. In all cases, clinical trials are considered sponsored projects, and must be reviewed and approved as such.

Clinical trial proposals differ from other proposals in several ways, which makes their review different.

a.       For many clinical trials the sponsor has already had extensive discussions with the principal investigator and has often agreed in principle to support the trial.

b.      The clinical trial agreement that frequently accompanies the other documents making up the proposal is usually not consistent with University policies and will have to be negotiated by ORS. An exception to this is the use of previously negotiated master or standard agreements. Note: ORS is the only office authorized to sign clinical trial agreements on behalf of the University.

c.       All clinical trials involve human subjects and while the protocol review by Regulatory Affairs and the proposal review and contract negotiation by ORS take place separately, both must be completed before an agreement can be signed and the trial initiated. Additional external and internal reviews (i.e., by the FDA, the University's GCRC, or the Cancer Center) may also be required.

d.      Management of a clinical trial differs from other projects, for both the financial aspects as well as the conduct of the research.

e.       PI should note specific University policies related to Financial Disclosure Requirements for Faculty Participating in Clinical Trials.

In an effort to facilitate the negotiation of pharmaceutical industry initiated and sponsored clinical trials, ORS and the Office of Human Research (OHR) have a process that provides investigators with a mechanism to request an early review of clinical trial contracts. The required submission form for early review of contracts is available at ORS Forms & Agreements.

Assistance in preparing clinical trial proposals is available from the School of Medicine Office of Human Research.

5.9      Project Site Visits

Some sponsoring agencies require a "site visit" to the principal investigator's laboratory as part of the evaluation of a proposal. Such visits are generally conducted by a staff scientist from the sponsor, accompanied by peer reviewers in the pertinent discipline.

The usual agenda of a site visit is a presentation of the project by the principal investigator and members of his/her staff followed by a discussion of the research with the visitors. The presentation should amplify the proposal, using all available means to demonstrate the importance of the work and the capabilities of the researchers. A well-planned and executed site visit will enhance the proposed project's chances of approval.

For projects which involve the use of laboratory animals, the participation of the University Veterinarian during the site visit is encouraged.

While site visits are mainly concerned with the scientific aspects of a project, the visitors frequently raise questions of an administrative nature which can best be answered by ORS. ORS should be notified in advance of all site visits so that it can render any necessary assistance in organizing and participating in them.

6         Types of Agreements and Instruments

 

Award documents are legal agreements between the University and the sponsor. Notices of award can be formal contracts, grants, or cooperative agreements. Before accepting an award, ORS must review the formal document for compliance with University policy. Only Research Services is authorized to accept and sign notices of award on behalf of The Trustees of the University of Pennsylvania.

6.1      Grants

Grants constitute the majority of awards received by the University and constitute a less restrictive award category. Sponsors often do not require the University to countersign grants because the terms and conditions are agreed upon by submitting an authorized signed proposal. Federal grants are governed by the administrative terms and condition found in the grants administration manuals or handbooks of the sponsoring agency, e.g. the NSF Grant Policy Manual or the NIH Grants Policy Statement. These types of documents set forth the sponsor's general terms and conditions of award and are derived from OMB Circular A-110. However, always check program announcements and similar documents for embedded terms and conditions.

The University is under no obligation to continue the proposed work once funds have been depleted.

6.2      Contracts

Contracts are usually awards that are more restrictive. Typically, contracts must by signed by both the sponsor and the University before they become binding and they may require defined deliverables, on specified schedules.

There are two types of contracts:

• Fixed-Price: Contracts are made at a set amount, regardless of the actual costs for completing a set scope of work. The University is paid this set amount. If the Principal investigator (PI) completes the work for less, the University retains the additional funding. If it costs more than the contract value to finish the work, the University must do so at its own expense, and the PI's School is responsible for paying the difference. Because of these risks, and because research is always an uncertain business, the University discourages fixed-price contracts. If a fixed-price contract is accepted, it is critical that the deliverables be based on reports of project progress, rather than in terms of anticipated results.

• Cost Reimbursement: This type of agreement specifically defines the maximum level of support a sponsor will provide. If actual project costs are less, the University will only be reimbursed its actual costs. If research costs exceed the proposed estimate, the University must report only on the amount incurred, not exceeding the maximum level of support completed. The University however, may still be obligated to complete the proposed work. For a variety of reasons related to the University's not-for-profit status, cost reimbursement contracts are the more appropriate vehicle for contracts.

6.3      Cooperative Agreements

Cooperative Agreements are used when federal sponsors want to retain more active involvement in the conduct of the project. This active oversight may be evidenced by a high level of agency program officials advising on the direction of the project, more frequent reporting, or anticipated deliverables.

6.4      Other Agreements

Confidentiality Agreements (except for those involving preliminary discussions with corporate sponsors of clinical trials): Confidentiality Agreements are reviewed by CTT.

Confidentiality Agreements for Clinical Trials: The review of Confidentiality Agreements from corporate sponsors which are used to cover a PI's initial review of materials from a sponsor (such as the investigator's brochure), prior to the actual decision to participate in a corporate sponsored clinical trial, are conducted by the Office of Human Research (OHR). These agreements are signed only by the PI.

Material Transfer Agreements (accept those involving human tissue transfers): CTT reviews, negotiates and approves all Materials Transfer Agreements, except those involving human tissue transfer.

Human Tissue Transfer Agreements: These agreements are reviewed and approved by the Office of General Counsel (OGC). Transfers of human tissues require approval from the Office of Regulatory Affairs (ORA).

Data Use Agreements: These agreements are required when transferring HIPAA covered Personal Health Information. Transfer of such data requires approval from the Office of Regulatory Affairs.

6.5      Issues Requiring Special Consideration

6.5.1      HIPAA

 

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law which goes into effect April 14, 2003. The law includes provisions designed to protect the privacy of individually identifiable patient health information.

 

According to the final regulations, healthcare providers such as the University of Pennsylvania Health System can use and disclose protected health information (PHI) only for certain specific functions: treatment, payment and healthcare operations purposes. For all other purposes, such as research purposes, PHI may only be used or released with the written consent of the impacted individual (authorization) or by application of a specific exception.

 

Certain parts or "regulated entities" within the University, as part of their integral function, provide healthcare or health plan services and will need to use and disclose PHI on a routine basis These regulated entities include UPHS/SOM, the Nursing Clinic LIFE, SODM, Student Health and the employee health plan. Accordingly, specific polices and procedures have been developed and implemented for any use or disclosure of PHI by these entities.

 

Proposals which anticipate the use of PHI or otherwise implicate HIPAA concerns should be carefully reviewed. In such cases, faculty should identify any research proposals being submitted to ORS that do contain PHI so that these may be given special attention and handled in accordance with HIPAA regulations.

6.5.2      Export Controls

 

Export Administration Regulations (EAR, enforced by the Department of Commerce) and International Traffic in Arms Regulations (ITAR, enforced by the Department of State) are Federal regulations which, for reasons of national security or protection of trade, prohibit the "export" (defined very broadly as any oral, written, electronic or visual disclosure, shipment, transfer or transmission of a commodity, technology or software/code) of certain technologies without a license, unless an exception applies. If research at Penn involves such technologies, these regulations may require Penn to obtain prior approval from State or Commerce before:

 

* involving foreign students or faculty in the research;

* working with foreign companies; and

* sharing research results with persons who are not U.S. citizens or permanent resident aliens.

 

These restrictions apply to work actually done on site at Penn.

 

These requirements may undermine publication rights, dissemination of research results, and international collaboration. Violations of the regulations may result in severe penalties.

 

Proposals and awards containing such terms and conditions, or involving research implicated by export control laws should be identified as early as possible. Principal investigators should consult ORS (http://www.upenn.edu/researchservices/exportcontrols.html) immediately if they become aware of such concerns.

7         Initiating the Project Award

7.1      Award Notification

When a proposal has been approved by a sponsor for support, ORS will usually receive notice that an award has been made or a contract is being prepared. If the PI receives such a notice, s/he must contact ORS immediately to insure that ORS has also received the notice. ORS cannot administratively initiate the project without formal sponsor notification. Many award instruments are received which require both sponsor and University signatures (bilateral agreement) before they become effective. Principal Investigators are not authorized to sign award documents on behalf of the University.

When an award document is received which requires University signature in order to be effective, it is the responsibility of ORS to return signed copies to the sponsor. Upon receipt of the fully executed documents, ORS will process the award. On occasion, a sponsor may award support for an investigator without a formal proposal being submitted through the University. In such cases, formal approval of the project as described in University Review of Proposals, must be completed prior to ORS's acceptance of the award.

7.2      What to Look for in a Notice of Award

Most notices of award address these points:

• Period of Performance. These dates may not coincide with the dates of the total project period.
• Name of the Principal Investigator. This individual is responsible for conducting the project in accordance with University policies and sponsor requirements.
• Dollars Committed and/or Obligated. Not all project funds may be released at the beginning of the project but may be obligated incrementally. The sponsor is under no legal obligation to pay dollars not yet obligated.
• Future Year Commitments. These funds are contingent on their availability and on satisfactory progress on the project. Use these amounts for planning purposes.
• Cost Sharing. If the sponsor requires the University to contribute its own resources to the project, it usually specifies those requirements in the award notice. Accounting and reporting on these costs is a formal requirement for the University.
• Accounting and Reporting Obligations. Virtually all awards require technical and financial reports. Most awards require patent and property reports.
• Deliverables. Under some contracts, the University must deliver specified work products to the sponsor.
• Payment to University. Awards specify how the University will be funded or reimbursed by the sponsor.
• Special Terms and Conditions. The award may have additional terms and conditions which may specify such things as key personnel, limitations on availability or use of funds, need for prior approvals and similar additional oversight by the awarding agency. It is critical to understand these restrictions before incurring costs. Both the PI and the responsible BA must take note of these requirements in addition to reading all referenced documents within the award notice.

7.3      Account Information Sheet

When an award has been received and accepted, ORS will establish an account fund number and prepare an Account Information Sheet (AIS) which summarizes accounting information and highlights special terms and conditions of the award. A copy of the AIS and the award document is distributed to the business administrator who is responsible for providing a copy to the principal investigator. It is the principal investigator's responsibility to become familiar with the requirements and restrictions of the project by referring to the AIS and the attached award documentation. If there are any questions, contact ORS for guidance.

7.4      Establishing the Account

The AIS contains the BEN Financials account number that has been uniquely assigned to this project. All project expenses will be charged to this account number.

7.5      Budgeting

Once an account has been established as evidenced by an AIS, the department/school business office must enter a detailed budget for the account in BEN Financials.

7.6      Payroll Management

Concurrent with the preparation of the budget, the payroll management system should be updated for each University employee to be paid on the project. For establishment and hiring for new positions, contact the departmental/school business office or the Office of Human Resources.

7.7      Sponsor Payments

Most awards are made on a "cost-reimbursable" basis and the University is reimbursed for actual expense incurred, usually on a monthly basis, by billing the sponsor or by drawing against a sponsor's letter of credit account. Some awards, usually from private sponsors, are funded by a payment schedule which typically includes some advance payment.

Should the principal investigator receive a sponsor check, he/she should take it to his/her business office which will forward it immediately to ORS along with identifying information for deposit to the project account. Sponsored project payments should not be processed on a Cashier's Cash Memorandum (D-Slip).

7.8      Anticipated Awards (Advance Account Requests)

There may be a legitimate need to start a project prior to the receipt of formal notification of an award from a sponsor. In this situation, an account number may be requested from ORS prior to the formal notification by completing an Advance Account Request form, with the indicated approvals. An advance account number is then established by ORS and an AIS is issued. A detailed budget for the amount of the advance account should be entered in BEN Financials. When the formal award is received a revised AIS will be issued. If for any reason an award is not received, or if sponsor conditions preclude pre-award-date expenses, the department/school is responsible for any unreimbursed expenditures.

7.9      Supplements to Awards

An existing award may be supplemented with additional funds during its performance period. Notification to the PI and BA will occur through an AIS from ORS.

8         Award Administration

8.1      Sponsor-University Relationship

Awards for sponsored projects are made to The Trustees of the University of Pennsylvania, which is identified as the grantee or contractor in the document. It is the primary responsibility of ORS, as designated institutional representative, to serve as the intermediary between the sponsor and the principal investigator for the purposes of negotiating changes in the project budget, modifications (reallocations, increase or decrease of funds), date extensions, and other items of an administrative nature.

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 Policies

The following Sponsored Projects Policies are of direct relevance to the administration of sponsored projects:

 

2101 Administration of Sponsored Projects

2103 Administration of Clinical Trials

2104 Negotiation of Awards

2105 Acceptance of Awards

2106 Financial Responsibility

2107 Accounting Authority & Responsibility

2108 Cost Accounting Standards (CAS)

2109 Budgets

2110 Federal Direct Cost Expenditures

2111 Unallowable Costs

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

2124 Direct Billing

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

2132 Record Retention

2133 Advances of Cash from External Sponsors

2134 Expense Approval Requirements

2135 Monitoring Subrecipients Not Subject to OMB Circular A-133

2138 Direct Cost Expenditures for Non-Federal Organizations

 

 

8.3      General Administration

8.3.1      Expenditure of Funds

Once 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 Costs

Allowable 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 department/school University accounts. See Sponsored Projects Policies Nos. 2110 and 2138. Certain other costs normally unallowable on federal awards, such as cell phones and local telephone charges may be allowable on non-federal awards.

8.3.3      Unallowable Costs

Certain 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 Categories

Many specific expenditure categories have special requirements and considerations. Administration of the major categories is summarized in the sections below.

8.3.4.1       Personnel

Appointments 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.

* 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.

* 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.

* Additional Compensation

Project funds may not be used to increase the regular compensation of the principal investigator or other University staff members.

* 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.

 

* 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 Costs

These costs are allowed only if project has received prior IRB and/or IACUC approval.

8.3.4.3       Travel

Travel 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.

* 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.

* Foreign Travel

Foreign travel is generally defined as any travel outside the United States and Canada, although some contracts may stipulate differently.

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       Equipment

8.3.4.4.1   Definition of Non Expendable Equipment

Items 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 Equipment

 

Special 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 Purchase

 

Many 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 Acquisition

 

As 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 Records

 

The business office in the department should keep project equipment records on each item acquired, showing at least the following:

 

* Name of Item

* Manufacturer

* Model No.

* Serial No.

* Acquisition Document Reference (P.O. No., Date and Acct. No.)

* Unit Cost Approval Document Reference (when required)

* Sponsor Grant/Contract Number

* Location  

* 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 Projects

Frequently, the services of individuals who are not University employees are necessary in the performance of sponsored projects. Such services may include consulting, preparation of working papers or reports, presentation of lectures or seminars and other such activities which are essential to the successful completion of the project. However, it is important that payments for such services be classified and documented properly in the accounting system to avoid audit exceptions. The following guidelines are in effect.

8.3.4.5.1   Honoraria

Honoraria 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 Fees

Such 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 Services

For 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 Travel

If 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      Overview

When 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 Subaward

Usually, 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 Order

Research 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:

"Subaward service, in accordance with the terms and conditions of Subaward #________, dated ________, with an effective date of ________. In case of any conflict between the conditions of the purchase order and the subaward, the terms of the subaward shall take precedence."

4.      If the subaward purchase order is greater than $5,000, the following statement must be entered in the Notes to Approver field:

"Subaward, Competitive bids are not required"

The purchase order is then approved in accordance with the School/center purchase order approval hierarchy.

8.4.4      Invoices

The 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 Modifications

When 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 PO#_________, Competitive bids are not required."

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-out

 

The 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      Consultants

8.5.1      Payment of Consulting Fees and Documentation

 

A 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 start of work.

Note: To be considered a legally binding agreement between the University and the consultant, all such agreements must be signed by an authorized institution official in Research Services.

 

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 Consultants

Consultants 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:

• Name of consultant
• Nature of services rendered
• Rate of pay
• Period of service
• Total amount of the fee and other expenses

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 Consultants

Payments to external consultants should be processed in accordance with University of Pennsylvania Financial Policy #2319 entitled "Payment to Individuals for Honoraria, Consulting Fees, Lecture Fees, Human Subject Fees, and Other Services," in the Financial Policy Manual and the Independent Contractors & Consultants Guide. The following conditions also apply to external consultants:

8.5.1.3       For Federal Employees

 

Fees 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       For University of Pennsylvania Employees

 

Payments to internal consultants should be processed in accordance with Financial Policy #2320 entitled "Extra Compensation for University Employees" in the Financial Policy Manual. Charges representing extra compensation for consulting or lecture work (i.e., compensation above the salary base paid to a salaried University employee) are allowable only in unusual cases and only when all of the following conditions exist:

• The consultation is specifically provided for in the award document or approved in writing by the sponsor.
• The consultation is across departmental lines or involves a separate or remote location.
• The work performed is outside the scope of the individual's regular departmental workload.
• The payment is considered extra compensation and is processed through the payroll system using an additional pay form.

8.6      Program and Interest Income

 

Program income or interest revenue must be budgeted and accounted for within the fund in a manner consistent with the specific terms and conditions of the award or by reference to general provisions of federal regulation.

8.6.1      Program Income

 

Program income is income generated as a result of program activity or by the sale of assets previously purchased under a sponsored program (see Sponsored Projects Policy No. 2121). Other types of program income are, but not limited to:

 

* Fees earned from grant supported services

* Rental or usage fees

* Third party patient reimbursement

* Sale of tissue cultures, educational materials or research animals

 

Note: Although income earned from license fees and royalties on patents and copyrighted material is considered program income for federal awards, most agency regulations exempt this income from reporting requirements. Refer to the terms and conditions of non-federal awards for their requirements related to patent and copyright income.

The terms of the award must be reviewed carefully to ascertain sponsor requirements regarding the reporting and disposition of program income. Generally, federal sponsors will require that program income be reported on the Financial Status Report (FSR).

 

Program income may be used as additional support when specifically allowed by the sponsor. When supplemental support is permitted, funds must be properly budgeted and accounted for. ORS will establish a separate fund to account for program income when the additi method is required to be used, unless the amount of program income is nominal, i.e., less than $5,000. The fund will have the same F&A rate as the sponsored project fund.

 

In certain cases program income will be used to reduce or deduct from the sponsor's share of funding. This is more likely to occur if program income exceeds $25,000 per year.

 

Program income can be considered for cost sharing or matching gift requirements as long as the associated expenditures are also allowable.

8.6.2      Interest Bearing Funds and Excess Cash

 

The University will accept grants which contain a provision requiring the accrual of interest on advance payments. A new award with these provisions will be sent to the Office of the Treasurer for participation in the Temporary Investment Fund (TIF) (see Sponsored Projects Policy No. 2133).

 

ORS will issue an AIS indicating in the remarks section that the fund is to participate in TIF. However, depending on the terms and conditions of the award, interest earned may need to be returned to the sponsor or used to further support the purposes of the sponsored project.

 

For federal awards, interest on "excess cash" (cash in excess of current expenses) in excess of $250 annually must be returned to the federal government.

8.7      Rebudgeting of Funds

During the conduct of the project, the principal investigator may determine that budget changes are necessary. Many sponsors allow flexibility in how project funds are expended and permit budget changes needed to meet project requirements. Principal investigators need to be aware of the specific requirements for their awards and to request prior approval for budget changes when necessary. Re-budgeting to include animal care costs or human subject costs is not permitted without prior IRB and or IACUC approval.

When budget revisions are made in direct cost categories, there may also be an impact on the F&A costs to be charged to the project. As an example, if funds budgeted for equipment, that were not included in the MTDC base for calculating the F&A cost, are expended for materials and supplies, then F&A costs will be assessed against those expenditures.

Principal investigators should seek guidance from their business administrator or ORS (see Sponsored Projects Policy No. 2106 and Project Changes) on specific re-budgeting questions.

8.8      Project Extensions

The principal investigator must plan and direct the project work so that it will be completed within the time and funds authorized. It is often necessary and appropriate to initiate a request for additional time with or without additional funds. Requests for such changes should be initiated by the principal investigator, countersigned by ORS, and forwarded to the sponsor well in advance (at least 60 days) of the project expiration date.

8.8.1      Federal Sponsors

Most federal sponsors allow the University to grant a one time extension of a grant without additional funds up to one year. See Project Changes and Sponsored Projects Policies Nos. 2106 and 2113 for additional information. Any further extensions of time require the prior approval of the sponsor.

8.8.2      Non-Federal Sponsors

Non-Federal sponsors may require the formal execution of an amendment to the contract to effectuate changes or extensions of the terms and conditions of an award.

 

In those instances where the fund number is to be used for a future budget period or the current budget period has been extended beyond the original termination date, the University's financial accounting system records will be updated to reflect the new Budget End Date upon issuance of the Account Information Sheet (AIS). The AIS is issued when verifiable documentation authorizing an extension of the project or budget period is made available. Documentation must be in the form of a letter (or official e-mail) from an authorized official of the sponsor approving the extension, or by way of a notice of award and such information must be made available to Research Services - Pre Award.

8.9      Retroactive Cost Transfers

Once a cost has been incurred and charged to a particular project account, it cannot be arbitrarily transferred to another project account. Cost transfers indicate a lack of controls in the project and are a cause for concern. For information see the Section on Guidelines for Cost Transfers and Sponsored Projects Policies 2106 and 2113.

8.10 Billing and Financial Reporting

As required by the terms of a sponsored project, periodic billing, financial reporting and withdrawals against letters of credit are initiated by ORS, based on the official University accounting system records. The PI's primary responsibility in this area is to ensure that expenses charged to the project account are accurately reflected in the accounting system in a timely manner. The PI should review the project fund monthly. The PI is also responsible for working with his/her business administrator to assure that a project is ready for close-out and final expenditures are reflected on the fund within 60 days after the stated termination date. If the final reporting date is less than 90 days after the termination date, the project must be ready for close-out reporting at least 30 days prior to the final reporting date. Should there be any questions, contact ORS.

A specific research accountant is assigned to the PI's account and handles all project financial reports. See the ORS web site for a listing of department and school assignments.

See the section on The Close-out and Final Reporting Process for close-out requirements.

8.11 Overexpenditures and Collections

If a deficit or disallowance to the project account occurs, the principal investigator, in consultation with the chair and dean, will advise ORS as to the desired disposition. In the absence of such advice, ORS will transfer the over expenditure into an unrestricted account of the appropriate school and refer the matter to the responsibility center senior business officer (see Sponsored Projects Policy No. 2129). The University does not budget funds to cover grant or contract deficits.

Occasionally, a sponsor fails to reimburse the University for legitimate expenditures made for a project. While it is the responsibility of ORS to submit invoices or financial reports as required in the award document, the principal investigator, his/her department and school play an important role in resolving situations where a sponsor will not or cannot reimburse the University. In such cases refer to Sponsored Projects Policy No. 2125.

9         Project Changes

9.1      Overview

When a grant or contract is awarded in response to a proposal, the sponsor expects the project will be carried out in accordance with the proposed scope of work and the approved budget. Since the course of research is often uncertain and circumstances can change, provisions to manage project changes are necessary. When this is the case, requirements to obtain sponsor prior approval vary widely: some sponsors are very restrictive; others allow wide latitude for changes that benefit the project.

Since it is impractical to provide a comprehensive list of all sponsor requirements, this section focuses instead on federal regulations.

To determine whether a proposed change is permissible:

• Read the award terms and conditions
• Discuss the change with your Business Administrator (BA) and Research Services (see Sponsored Projects Policy 2106)

ORS works with the principal investigator and the sponsor to implement any changes in the project which require University and sponsor approval (such as changes in scope of the project, key personnel identified in the notice of award, budget, and other modifications of award terms and conditions). Requests for changes must be approved and signed by ORS before submission to the sponsor. Certain significant changes may also require the review and approval by the department chair and dean of the school.

Project changes are of three basic types: programmatic, budgetary and administrative.

Programmatic changes are necessary when the PI determines that the direction of the project must change based on the results obtained to date. For some sponsors, changes in the model, the physiological or pathological condition being studied may require sponsor approval. Also, adding human subject research or animal research to a project is a programmatic change and may require sponsor notification as well as IRB and or IACUC approval.

Budget changes are necessary when the PI determines that expenditures are required for unanticipated items not included in the proposal budget (e.g., the purchase of equipment not originally needed for the project, or an unexpected trip that increases the amount spent for travel). Generally, budget changes involve moving funds from one budget category to another, without increasing the total amount of the award. Occasionally, however, a need arises that can be met only with increased funding and thus usually requires submission of a proposal for supplemental funds. Such requests are handled differently from requests to rebudget funds.

Administrative changes, the third general category of project changes, include but are not limited to:

• Changes in scope of work (see Programmatic Changes above and Expanded Authorities or Waiver of Authorities below)
• Expenditure of funds before receipt of the formal award (pre-award costs)
• Extension of the project period (no-cost extension)
• Changes in the effort of the PI or other key personnel named in a notice of award
• Carryover of unexpended funds from one budget period to another

9.2      Documenting Project Changes

PIs and BAs are responsible for maintaining written justification that changes are scientifically necessary and appropriate (Sponsored Projects Policy No. 2110) using the following guidelines:

• Correlate expenditure to successful completion of the project
• Justify project changes in terms of the science or programmatic needs
• Systematically maintain justifications in the file

9.3      Expanded Authorities or Waiver of Authorities

Federal regulations require prior approval from an awarding agency for a variety of project changes. While the federal government's Office of Management and Budget (OMB) has reduced the number of required prior approvals in an effort to streamline the grants management process, a few required prior approvals remain. More detailed information is presented in OMB Circulars

A-21: Cost Principles for Educational Institutions
A-110: Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education

Many federal agencies have waived cost related prior approvals and permit an institution to decide budget changes under the "expanded authorities." These expanded authorities do not apply to contracts. In addition to the cost related prior approval waiver, in general, the following changes may be permitted without prior agency approval (see FDP Prior Approval Matrix and review terms and conditions of award):

• Pre-award costs up to 90 days prior to award
• One-time expiration date extension of up to 12 months
• Carryover of unobligated balances to subsequent funding periods

Certain other changes, however, require prior approval of the awarding agency:

• Changes in project scope or objective as evidenced by:
• Change of PI or other key personnel noted in the notice of award document
• Absence of the PI for more than three months, or a 25 percent reduction in effort spent on the project by the PI
• Acquisition of equipment exceeding $25,000
• Transfer of the performance of substantial programmatic work to a third party
• Significant rebudgeting, whether or not the particular expenditures require prior approval. Significant rebudgeting occurs when expenditures in a single direct cost budget category deviate (increase or decrease) from the categorical commitment level established for the budget period by more than 25% of the total costs awarded (direct and F&A).
• Need for additional funds
• Other changes specifically cited in the award or in agency-specific guidelines

9.4      Federal Demonstration Partnership (FDP)

 

Ten federal agencies and approximately 100 universities and hospitals participate in the FDP. As a participant in the FDP, the University receives the most favorable grant terms and conditions from FDP participating federal agencies. The award notice will specify whether the project is covered under the expanded approval authorities granted under FDP. These terms and conditions are summarized in the FDP Prior Approval Matrix.

9.5      Project Changes Allowability Checklist

 

Initial steps for PI and BA when contemplating project changes:

• Review the terms of the specific award notice;
• Check sponsor general terms and conditions and any referenced regulations, laws, guidelines and agreement manuals;
• Ensure changes are consistent with project objectives and statement of work, and document this information;
• Review FDP and Agency requirements (see FDP Prior Approval Matrix);
• Review OMB Circular A-21: Cost Principles for Educational Institutions: Section J; and
• Review Penn policies and procedures, specifically Sponsored Projects Policies Nos. 2106, 2110, 2113, and 2138 to ensure the proposed transaction is consistent with University policies.

9.6      Change of Principal Investigator or Reduction of Effort

An award is based to a great extent on the qualifications and proposed level of effort of the named principal investigator. Should a principal investigator wish to withdraw from the project, substantially reduce his or her stated level of effort, be absent from the project for an extended period (3 months or more), such as sabbatical leave or illness, or sever his or her connection with the University, the situation must be communicated to the department chair and the dean. They, in turn, will recommend appropriate action, such as a substitute principal investigator or termination of the project. These recommendations must be forwarded through ORS to the sponsor for approval.

9.7      Project Transfer to another Institution

If a principal investigator plans to leave the University, s/he should contact ORS and the project officer at the sponsoring agency to determine whether or not the grant or contract can be transferred to the new institution. The situation must be communicated to the department chair and the dean, who will recommend appropriate action. A formal written request for transfer is required which must be signed by ORS on behalf of the University.

9.8      Other Post Award Changes

Sponsor prior approval may be required for other post award changes to federal grants. They include but are not limited to:

a.       changes in the budget

b.      adding human subjects or animals if a change in scope

c.       foreign travel

d.      subawards

e.       equipment procurement

f.        initial no-cost extension

g.       title to supplies

h.       more than 90 day pre-award costs

i.         additional funding

For additional details see the FDP Prior Approval Matrix.

The principal investigator must be cognizant of these sponsor restrictions at the outset of the project. Review the award terms and conditions carefully. Contact ORS for further clarification. When sponsor prior approval is required, the principal investigator will initiate a letter describing the desired change, with justification, and forward it to ORS for endorsement and submission to the sponsor.

9.9      Considerations of Project Changes by Categories

The following is a list of factors to evaluate when determining the allowability of certain project changes by cost categories.

9.9.1      Change in Effort of Key Personnel

* Significant reductions in effort (>25%); for NIH Key Personnel means the PI or any other person named in the notice of award); agencies retain approval authority for significant changes in PI effort. Such changes cannot be authorized internally at the University

* Sponsor approval is required for a PI absence from the University for three (3) months or more

9.9.2      Change in Scope of Work

* Changes in scope of work requires prior approval by all federal sponsors

9.9.3      Significant Rebudgeting

* Expenses included in F&A cost pools may not be charged directly (e.g., telephone equipment or general administration)

* For NIH, rebudgeting in excess of 25 percent of total costs in a single direct cost budget category is likely to require approval since it may indicate a change in scope of work. This will require sponsor prior approval.

9.9.4      Equipment Not Included in Proposal

* Must be necessary for project purposes during the award period

* Is not available for use elsewhere in the University

* Award notice does not constrain equipment purchases (purchases greater than $25,000 may reflect a change in scope of work)

* F&A costs are reallocated, if necessary

* Obtain necessary bids for, or otherwise justify, sole-source purchase

* Know sponsor requirements for equipment disposition after project ends

9.9.5      Subrecipients Not Included in Proposal

* Subaward of a significant part of the programmatic effort requires agency prior approval for most federal sponsors

* For NIH awards, all foreign subrecipients must have prior approval

9.9.6      Foreign Travel Not Included in Proposal

* Travel must be otherwise allowable by sponsor

* If necessary, prior approval must be obtained from the sponsor through ORS

* Department must maintain documentation on file to support the trip's purpose

* Trips paid with federal funds must be on US flagged air-carriers, with very limited exceptions which must be approved and documented in advance

9.9.7      Consultants Not Included in Proposal

* The consulting must be justified and documented

* A signed consulting agreement must be on file in Research Services.

* Consultant must meet the Accounts Payable "consultant test"

* Consultant must submit appropriate, itemized invoices