Welcome Please help yourself to breakfast and start your quiz.

Welcome

Please help yourself to breakfast

and start your quiz.

Internal Medicine Education Retreat

October 16, 2002Sponsored by Internal Medicine, the Office of the

Associate Vice Chancellor for Research Administration, Grant & Contracts, Sponsored

Projects Accounting

Welcome!

Your Hosts are:• Nancy Buck, Director, Research Education • Joe Gindhart, Director, Sponsored Projects Accounting • Denise McCartney, Associate Vice Chancellor for

Research Administration• Nancy Rhodes, Executive Director, Finance and

Administration, Department of Medicine• Terry Thurston, Director, Grants & Contracts• Cindy White, Director, Research Office

Planning Group

• Nancy Buck• Tami Evans• Joe Gindhart • Daniel Korte• Donna Lewis• Denise McCartney• Mary Lou Rheinheimer• Nancy Rhodes• Terry Thurston

Housekeeping• Food—Coffee provided all morning. Breakfast from

7:30 – 9:00.

• Breaks—Around 9:10. 10 minutes (see agenda).

• Phones—One at the top of the escalators to the right at the end of the circle coach.

• Restrooms—On the North side of the building in the West corner. They are clearly marked.

• Questions—Raise your question flags as they come up, or write them on the blue question sheet for detailed answer via email.

Today’s Agenda7:30 Registration and Continental Breakfast

8:00 Introduction and Opening Remarks

8:20 Quiz 8:40 Table Discussion of Vignettes

Preparing the Proposal Budget, GBUD: Entering the Proposal Budget 9:10 Break—10 Minutes 9:20 Table Discussion of Vignettes

Administrative/Unallowable Costs, Cost Sharing, PARS/PCTs 10:50 Large Group Review of Vignettes 11:50 Next Steps 12:00 Adjourn

Today’s Goals• Enhance understanding of federal regulations

governing the conduct and management of sponsored funds

• Enhance understanding of WU policies

• Enhance understanding of research administration at WUMS

• Share best practices

• Provide useful tools

Research Administration Process The three standard components of research administration are Pre-Award, Award and Post-Award. These three components include seven (7) subprocesses comprising the end-to-end research administration process.

IdentifyFunding

Prepare &Approve

Protocols

Negotiateand

Accept/Contract

ManageFinances

Report &Close-out

Award

Prepare &Approve

Proposals

Receiveand

Set-upAward

1

2

3

4

5 6 7

Pre-Award Award Post-Award

Research Administration ProcessThe seven major research administration subprocesses encompass the following activities:

Identify Funding includes identification of public and private funding sources1

Prepare & Approve Protocols includes reviewing and approving protocols for compliance with animal& human subject regulations, environmental safety and certifying Conflict of Interest disclosure reports2

Prepare & Approve Proposals includes preparing, reviewing and approving proposals for compliancewith all division, department, school, university, federal and other agency requirements and regulations3

Negotiate and Accept Award/Contract includes negotiating terms of award/contract with sponsor andrevising proposal, budget, terms and conditions4

Receive & Set Up Award includes assigning and establishing the account and fund number andentering project budget into financial system5

Manage Finances includes monitoring and approving project expenditures and recording financial transactions6

Report & Close-out Award includes preparing interim and final financial and technical reports7

Quiz

1. True or False? Key Personnel" means everyone who will

be working on the grant.

False – According to the NIH, "Key Personnel" are those individuals (including the PI) who contribute in a substantive way to the scientific development or execution of a project.

Quiz

2. True or False? The NIH must be notified if there is a change in PI during the course of a sponsored agreement.

True – Per the NIH Grants Policy Statement, the grantee is required to notify NIH if the PI or other key personnel named in the NGA will withdraw from the project entirely, be absent from the project during any continuous period of three months or more, or reduce his/her time devoted to the project by 25 or more percent from the level that was approved at the time of award. NIH must approve any alternate arrangement, including any replacement PI or other key personnel proposed by the grantee.

Quiz

3. True or False? The PI hasn't received the human subjects protocol approval yet, but G&C can still set up the award.

False – A grantee may not expend Federal funds for research involving human subjects unless it has an Office for Human Research Protections-approved assurance of compliance with the requirements of 45 CFR 46 and the research has been approved by an Institutional Review Board in accordance with the requirements of 45 CFR 46. (See NIH Grants Policy Statement.)

Quiz

4. True or False? A Department Administrator may sign a Prior Approval Request as long as the PI is aware of the post-award changes being made.

False – The Principal Investigator (PI) should sign the Prior Approval Request. As the individual primarily responsible for the sponsored agreement, the PI is attesting by his/her signature to the accuracy of the changes being made.

Quiz

5. True or False? A "Fixed Price" contract specifies that a fixed dollar amount will be provided for a specific period of time regardless of actual expenses incurred.

True – A fixed-price contract contains the provision that the contract will cover a specific period of time and a fixed dollar amount is issued for that time period regardless of actual expenses. In the majority of the cases unspent funds remain with the University.

Quiz

6. True or False? If grant funds run out during the grant's active budget period but work on the grant continues, the department may absorb these costs without using cost sharing accounts.

False – The costs assigned to sponsored projects should be accounted for on those agreements by use of a "V" account when the department is absorbing those costs. If a "V" account is not used, the department-absorbed costs will not be captured in the correct indirect cost pool. (See "Guidelines for Direct Charging to Grants," p. 11.).

Quiz7. True or False? The award terms and conditions allow

rebudgeting on this NIH award. Therefore, the PI can charge the project for administrative salary costs that were not originally budgeted.

False – If the original budget did not include administrative and clerical salary costs, any subsequent rebudgeting is subject to the granting agency's rebudgeting rules and Circular A-21. Circular A-21 says that administrative and clerical salary costs cannot normally be charged directly to a grant. (See "Guidelines for Direct Charging to Grants," Q&A p. 4.).

Quiz8. True or False? Since the PI no longer needs a piece of

equipment acquired with federal funds, it can be sold to another PI as long as it is also purchased with federal funds.

False – Federal Circular A-110 states that when the recipient no longer needs equipment purchased for the original project or program, the recipient institution shall use the equipment in connection with its other federally sponsored activities. Allowing the second PI to "buy" equipment purchased with federal funds with other federal funds amounts to double charging the federal government, and is not allowed. (See "Guidelines for Direct Charging to Grants," p. 9.).

Quiz9. True or False? Dr. Jones revised his effort on grant XYZ

from 30% to 40% on his last PAR report (1/XX – 6/XX). Accordingly, the department must process a PCT that will increase the salary (and related benefits) on the grant.

True - Upon changing a PAR, the individual should prepare a Payroll Cost Transfer to transfer charges to the proper accounts in accordance with the certified actual activity effort. (See Sponsored Project Accounting Personal Activity Reports (PARs)).

Discussion Group Directions

• Review each vignette and discuss questions in the time allotted

• Use the reference materials at your table to help• Raise the colored flag at your table if you need

advice from our roving subject matter experts• Note taker should document the main points

discussed on notepad provided.• Be prepared to discuss the issues raised during the

group discussion during the large group review

BREAK

10 Minutes

-phone at top of escalators

-restrooms on North side of this level

-coffee in the hallway outside the door

Vignette #1

Proposal Budget

Principal Investigator/Program Director (Last, first, middle):

DETAILED BUDGET FOR INITIAL BUDGET PERIOD

DIRECT COSTS ONLY

FROM

01/01/03 THROUGH

12/31/03

PERSONNEL (Applicant organization only) % DOLLAR AMOUNT REQUESTED (omit cents)

NAME

ROLE ON PROJECT

TYPE APPT.

(months)

EFFORT ON

PROJ.

INST. BASE

SALARY

SALARY

REQUESTED

FRINGE

BENEFITS

TOTAL

Gibson, Mel Principal

Investigator

12 100.0 166,700 26,332 193,032

Kidman, Nicole Investigator 12 15.0 12,240 2,468 14,708

Crowe, Russell Admin. Asst. 12 100.0 23,696 6,313 30,009

Ryan, Meg Postdoc Fellow 12 100.0 32,820 2,510 35,330

Quaid, Dennis Graduate Res. Asst. 12 100.0 23,400 23,400

Cruise, Tom Research Technician 12* 80.0 22,848 6,947 29,795

SUBTOTALS 281,704 44,570 326,274

CONSULTANT COSTS

Dr. Ruth - Consulting and Travel Expenses 4,500

EQUIPMENT (Itemize)

3 Computers @ $4000 each = $12,000 Microspectrometer $8,000 20,000 SUPPLIES (Itemize by category)

Disposable Supplies (glassware, solvents, etc.) $11,000 Copying Charges $778 DSL Line charges - $50 per month = $600 HP LaserJet Printer $1,500 Journals/Books $300 14,178 TRAVEL

Dr. Gibson travel: $1,500 airfare + $500 meals ($50 per diem x 10 days) 2,000 PATIENT CARE COSTS INPATIENT OUTPATIENT MRI scans (30 @ $300) & CT scans (30 @ $200) 15,000 ALTERATIONS AND RENOVATIONS (Itemize by category)

OTHER EXPENSES (Itemize by category)

Long Distance phone charges $500 Postage $200

Mice purchase $1,000 Animal housing - 30 cages @ $0.51 per cage for 365 days = $5,585 Subject remuneration - 30 patients x $50 = $1,500 8,785

SUBTOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD $390,737 CONSORTIUM/CONTRACTUAL DIRECT COSTS 65,000 COSTS FACILITIES AND ADMINISTRATIVE COSTS DHHS F&A rate 42% 27,300

TOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD (Item 7a, Face Page) $483,037

SBIR/STTR Only: FEE REQUESTED

Gibson, Mel

BUDGET VIGNETTE #1

Proposal Vignette #11) Dr. Mel Gibson’s institutional base salary is $172,000. What is significant about this amount? What important statement(s) should be included in the justification regarding Dr. Gibson’s salary?

Dr. Gibson’s institutional base salary is over the NIH salary cap of $166,700. To determine the maximum amount of salary that is chargeable to the grant, multiply the percent of effort times the salary cap amount of $166,700 (the Grants Budgeting System has a feature to accommodate salary caps).

If the institutional base salary is not provided, it is particularly important for those personnel whose salaries are over the cap to provide an explanation in the budget justification indicating that the actual institutional base salary exceeds the current salary limitation. NIH will use the information available in the existing application and make adjustments for the salary limitation based on information available at the time of award. Contact your Grants & Contracts Preaward Grant Analyst for template language options to use in the budget justification related to the salary cap.

Reference: PHS 398, NIH GPS, WU NIH Salary Cap Policies and Procedures

Proposal Vignette #1

2) Should the Institutional Base Salary column be completed on the budget page?

The PHS 398 instructions state that an applicant organization may choose to leave the institutional base salary column blank. However, PHS staff will require this information prior to award. It is especially important to provide and explanation in the budget justification for those individuals whose salary exceeds the NIH salary cap (see explanation in #1 above).


3) Is there anything that is significant or questionable about Dr. Gibson’s amount of effort?

The 100% effort requested on this proposal for Dr. Gibson would not be appropriate if he spends any of his time on other activities such as teaching, clinical activities, writing competitive grant proposals, or other administrative responsibilities (committee representation, departmental administration, etc.). The salary associated with the effort related to these activities would not chargeable to this grant as direct costs.

Reference: OMB A-21, WU Guidelines for Direct Charging Costs to Grants, WU Finance Office web site

Proposal Vignette #14) Are there personnel costs listed on this budget for whom charging costs to this grant would normally be unallowable? For which personnel and why?

The stipend for Meg Ryan, a postdoctoral fellow, cannot be charged to a federal grant. Per the NIH GPS: “Stipends are not allowable under research grants even when they appear to benefit the research project.”

Salary for Russell Crowe, the Administrative Assistant, would normally not be allowable as a direct cost, especially on an R01 grant, unless there are special circumstances (see #6 below).

Reference: NIH GPS, OMB A-21, WU Guidelines for Direct Charging Costs to Grants, WU Administrative Cost Policy & Procedures

Proposal Vignette #15) Are there personnel listed for whom special justification is required for the costs to be charged to this grant? For which personnel, and what should the justification include?

Special justification would be required for Russell Crowe, the Administrative Assistant. It is highly unlikely that an administrative assistant would be charged to an R01 grant for 100% effort.

Per the WU Guidelines for Direct-Charging Costs to Grants, the administrative or clerical salary is permitted to be included in the grant proposal only if “you identify and budget the extent of planned administrative or clerical time required, justify the unlike circumstances and document the specific association of the administrative or clerical duties with the grant. …. The documentation of unlike circumstances and specific association can be accomplished in one of two ways:

There is an unusually high level of administrative or clerical work required by an unusually large and complex project, such as a program project, etc., or

The administrative or clerical work is related to the distinctive scientific and technical requirements of the work of the grant, such as data collection, maintaining subject/patient data, phone surveys, etc.”

The justification of the unlike circumstances requirement must be included in the grant proposal.

Reference: WU Guidelines for Direct Charging Costs to Grants, OMB A-21, WU Administrative Cost Policy and Procedures

Proposal Vignette #16) Tom Cruise is a part-time employee (.75 appointment). The asterisk (*) on the budget page identifies him as part-time, as required in the PHS 398 instructions. What should be included in the justification?

Provide a full explanation about the part-time status of the individual. Per the PHS 398 instructions, if an appointment is less than full time, e.g., 50 percent time, identify with an asterisk (*) and provide a full explanation under “Justification” on Form Page 5.” For example: “Tom Cruise, Research Technician (.75 appointment) will devote 100% effort to this project.”


7) For which personnel should a narrative description of their specific functions be provided on the budget justification page (form page 5)?

For all personnel. Per the PHS 398 instructions, “Describe their specific functions under Justification on Form Page 5. Provide budget narrative for ALL personnel by position, role, and level of effort. This includes consultants and any “to be appointed” positions.”

Proposal Vignette #18) Dr. Mel Gibson and Dr. Nicole Kidman are key personnel on this project. What are the special requirements associated with key personnel?

Per NIH guidelines, for any key personnel, an effort decrease of 25% or more from the level that was approved at the time of award (for example, a proposed change from 40% effort to 30% or less effort) must be reported to the agency Reference: NIH GPS

Conflict of interest disclosure must be current at proposal submission, with any conflicts or potential conflicts managed, reduced or eliminated prior to expenditure of funds under an award. G&C currently checks COI disclosure for faculty, and this may be extended to non-faculty key personnel in the future. Reference: 45 CFR Part 50, PHS 398 Instructions, WUSM Conflict of Interest Policy

For those projects which include the use of human subjects, all key personnel who are involved with the human subjects portion of the research must complete the WU human subjects education requirement (implemented as a result of federal policy requirements).Certification of of the fulfillment of this requirement, signed by the PI and an institutional official, must be submitted to NIH prior to award. (G&C has template letters for your use.)

Reference: WU Human Studies Education Program Policy, NIH Policy

Proposal Vignette #1Non-Personnel Costs

(Consultant Costs, Equipment, Supplies, Travel, Patient Care Costs, Alterations & Renovations, Other Expenses)

1) Are there costs listed that are questionable or not normally allowable as direct costs? What justification would need to be provided to enable these costs to be charged as direct costs?

The following costs are normally not allowable or are questionable as direct costs:

DSL Line Charges

HP LaserJet Printer

Journals/Books

Postage

“Per diem” meal charges under Travel are not allowable. The actual cost of the meals should be charged. (refer to WU Travel Policy)

Per OMB A-21 and the related WU Guidelines for Direct Charging Costs to Grants: These costs may only be requested in the grant budget if they can be specifically identified with this particular sponsored project, and there are special, or unlike, circumstances. To request these charges as direct costs in this budget, there must be appropriate justification indicating what the direct relationship is of these costs to the scientific activities of the grant, and explaining the unusual circumstance that exists related to these items.

Remember the “Golden Rule”:

“Direct costs are those costs that can be identified specifically with a particular sponsored agreement…..or that can be directly assigned to (such activity) relatively easily and with a high degree of accuracy.”

Reference: OMB A-21 F.6.b, WU Guidelines to Direct Charging Costs to Grants, NIH GPS

Proposal Vignette #12) What costs are listed in the wrong category? Under what category should these items be listed?

The computers listed in Equipment should be moved to Supplies.

These charges listed under Supplies should be moved to Other Expenses: DSL line charges, Journals/Books (only if appropriately justified – see #1 above)

If the MRI scans or the CT scans listed under Patient Care Costs are provided and billed by Washington University, these costs should be listed under Other Expenses

The Mice purchase costs listed under Other Expenses should be moved to Supplies

Reference: PHS 398, NIH GPS, WU BUOB list

Proposal Vignette #13) Is further detail needed to describe any of the items listed (as required by the PHS 398 instructions)?

Provide justification for the non-personnel items on Form Page 5. The PHS 398 gives detailed instructions regarding the justification that is required for the categories of Consultant Costs, Equipment, Supplies, Travel, Patient Care Costs, Alterations and Renovations, Other Expenses. For example:

For Dr. Ruth, the Consultant, provide the following information in the budget justification (Form Page 5): her organizational affiliation, the services to be performed, the number of days of anticipated consultation, the expected rate of compensation, travel, per diem, and other related costs.

The Disposable Supplies must be itemized in separate categories, such as glassware, chemicals, radioisotopes, etc. (either on the budget page or in the narrative justification). Categories in amounts less than $1,000 do not have to be itemized.

The number of animals (mice) to be used must be stated.

Travel costs for Dr. Gibson must be itemized and justified on Form Page 5. Provide the purpose and destination of each trip and the number of individuals for whom funds are requested.

Refer to the PHS 398 instructions for justification needed for Patient Care costs.

Proposal Vignette #1Consortium/Contractual Costs

1) Each participating consortium/contractual organization must submit a detailed budget for both the initial budget period (Form Page 4) and the entire proposed project period (Form Page 5). Where should these pages be placed in the application?The budget pages of each consortium/contractual organization should be placed after the WU Form Page 5, and numbered sequentially (do not use 5a, 5b, 5c, etc.)

Proposal Vignette #1Consortium/Contractual Costs

2) What are two other application form pages that you should you obtain from the consortium institution that will not be submitted with the application to NIH, but are important for our internal purposes? (These pages must be submitted to G&C for review.)

Be sure to obtain the Face Page (signed by the institutional official and PI) and the Checklist Page from each consortium/contractual institution. Submit the originals of these two forms to G&C with the proposal. This is essential in order for our institution (G&C and RO) to verify that the consortium budget has been approved by the appropriate institutional official, and enables verification of the direct and F&A costs requested

Refer to the PHS 398 instructions and the NIH GPS for additional instructions and policy information on consortium/contractual costs.

Principal Investigator/Program Director (Last, first, middle):

DETAILED BUDGET FOR INITIAL BUDGET PERIOD

DIRECT COSTS ONLY

FROM

01/01/03 THROUGH

12/31/03

PERSONNEL (Applicant organization only) % DOLLAR AMOUNT REQUESTED (omit cents)

NAME

ROLE ON PROJECT

TYPE APPT.

(months)

EFFORT ON

PROJ.

INST. BASE

SALARY

SALARY

REQUESTED

FRINGE

BENEFITS

TOTAL

Gibson, Mel Principal

Investigator

12 95.0 158,366 22,640 181,006

Kidman, Nicole Investigator 12 15.0 12,240 2,468 14,708

Ryan, Meg Postdoc Fellow

12 100.0

Quaid, Dennis Graduate Res. Asst. 12 100.0 23,400 23,400

Cruise, Tom Research Technician 12* 80.0 22,848 6,947 29,795

SUBTOTALS 216,854 32,055 248,909

CONSULTANT COSTS

Dr. Ruth - Consulting and Travel Expenses 4,500 EQUIPMENT (Itemize)

Microspectrometer $8,000

8,000 SUPPLIES (Itemize by category)

Disposable Supplies (glassware, solvents, etc.) $11,000 Copying Charges $778 3 Computers @ $4000 each = $12,000 Mice Purchase (200 mice @$5) = $1,000 24,778

TRAVEL

Dr. Gibson travel: $1,500 airfare + $500 estimated cost for meals 2,000 PATIENT CARE COSTS INPATIENT OUTPATIENT CT scans (30 @ $200) 6,000 ALTERATIONS AND RENOVATIONS (Itemize by category)

OTHER EXPENSES (Itemize by category)

Long Distance phone charges $500 Postage $200

Animal housing - 30 cages @ $0.51 per cage for 365 days = $5,585 Subject remuneration - 30 patients x $50 = $1,500 16,785 MRI scans (30 @ $300) = $9,000

SUBTOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD $310,972 CONSORTIUM/CONTRACTUAL DIRECT COSTS 65,000 COSTS FACILITIES AND ADMINISTRATIVE COSTS DHHS F&A rate 42% 27,300

TOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD (Item 7a, Face Page) $403,272

SBIR/STTR Only: FEE REQUESTED

Gibson, Mel

REVISED BUDGET

Vignette #2

Grants Budgeting

PROPOSAL BUDGET VIGNETTE #2

Grants Budgeting Worksheet

Budget Item

Normally Allowable as a Direct Cost? See explanation

below* (Y/N)

Grants

Budgeting Category #

(see KEY below)

a) Graduate Research Assistant – 100% effort and salary

b) 4 computers/$3,000 each = $12,000 c) Postage $500 d) Reimburse parking expenses for patients e) Airfare/hotel/meal expenses for PI to attend scientific meeting

f) Glassware/pipettes $1,000 g) PI - 20% effort and salary h) Reagents $15,000 i) Mouse purchase: 100 @$14.00 = $1,400 j) Research Technician – 80% salary and effort k) Mouse housing: 100 mice, 3/cage @ $.85/day for 365 days

l) MRI scans (billed by WU): 20 @ $300 = $6,000 m) Books/journals $300 n) Postdoctoral Fellow – 100% effort and stipend o) Airfare/hotel/meal expenses for consultant p) CT scans (billed by BJH): 20 @ $200 = $4,000 q) Travel expenses for patients r) Freezer $5,000 s) Direct and F&A costs for Univ. of Pennsylvania (subcontract institution)

t) Confocal microscope $6,000

*Is this cost normally allowable as a direct cost per OMB Circular A-21 (and the related “WU Guidelines for Direct Charging Costs to Grants?”)? If “No”, special justification (beyond the normal justification required) needs to be included in the budget narrative describing both the specific identification of this cost with this particular project, and the special, or unlike circumstances that exist related to this item. (Note: This special justification should be included both on the Grants Budgeting System document Remarks screen, and in the budget narrative justification of the proposal).

KEY: Grants Budgeting Categories (NIH Research Grant)

1. Personnel 7. Patient Care Costs – Outpatient 2. Consultant Costs 8. Other Expenses 3. Equipment 9. Alterations/Renovations 4. Supplies 10. Consortium and Contractual Costs 5. Travel 11. Modular Direct Costs 6. Patient Care Costs - Inpatient

G:\gifts\Internal Medicine Retreat Fall 2002\Proposal Budget Vignette #2.doc

PROPOSAL BUDGET VIGNETTE #2

Grants Budgeting Worksheet - Answers

Budget Item

Normally Allowable as a Direct Cost? See explanation

below* (Y/N)

Grants

Budgeting Category #

(see KEY below)

a) Graduate Research Assistant – 100% effort and salary

Y 1

b) 4 computers/$3,000 each = $12,000 Y 4 c) Postage $500 N 8 d) Reimburse parking expenses for patients Y 8 e) Airfare/hotel/meal expenses for PI to attend scientific meeting

Y 5

f) Glassware/pipettes $1,000 Y 4 g) PI - 20% effort and salary Y 1 h) Reagents $15,000 Y 4 i) Mouse purchase: 100 @$14.00 = $1,400 Y 4 j) Research Technician – 80% salary and effort Y 1 k) Mouse housing: 100 mice, 3/cage @ $.85/day for 365 days

Y 8

l) MRI scans (billed by WU): 20 @ $300 = $6,000 Y 8 m) Books/journals $300 N 8 n) Postdoctoral Fellow – 100% effort and stipend N 1 (with no salary)

o) Airfare/hotel/meal expenses for consultant Y 2 p) CT scans (billed by BJH): 20 @ $200 = $4,000 Y 6 or 7 q) Travel expenses for patients Y 8 r) Freezer $5,000 N 3 s) Direct and F&A costs for Univ. of Pennsylvania (subcontract institution)

Y 10

t) Confocal microscope $6,000 Y 3

*Is this cost normally allowable as a direct cost per OMB Circular A-21 (and the related “WU Guidelines for Direct Charging Costs to Grants?”)? If “No”, special justification (beyond the normal justification required) needs to be included in the budget narrative describing both the specific identification of this cost with this particular project, and the special, or unlike circumstances that exist related to this item. (Note: This special justification should be included both on the Grants Budgeting System document Remarks screen, and in the budget narrative justification of the proposal).

KEY: Grants Budgeting Categories (NIH Research Grant)

1. Personnel 7. Patient Care Costs – Outpatient 2. Consultant Costs 8. Other Expenses 3. Equipment 9. Alterations/Renovations 4. Supplies 10. Consortium and Contractual Costs 5. Travel 11. Modular Direct Costs 6. Patient Care Costs - Inpatient

G:\gifts\Internal Medicine Retreat Fall 2002\GB Worksheet Vignette #2.doc

Financial Vignette #1

Administrative and Unallowable Costs

Financial Vignette #1Administrative / Unallowable Costs

Noted below is a recent email that was sent by a PI to his departmental administrator. Please review the message and be prepared to answer/discuss the questions below.

To: Marge Since I just got that new NIH grant (RO1-B), my lab personnel and I met last Friday to discuss

what items are needed to get it going. This new project is similar to my other NIH grant (RO1-A) and the project funded by the Merck (fixed price) contract so there is going to be some overlap in the use of supplies and other stuff. We’re going to need a number of items for these projects during the next week or two. Please purchase these items and charge them as indicated:

A) Three boxes of pens, two boxes of paperclips, two boxes of manila folders, a dozen blank CDs, a toner cartridge for my office printer, four three-ring binders and two file cabinets (two drawer – lateral). Charge this stuff to my two NIH grants (RO1A & B).

Answer: Regular office supply type items cannot be directly charged to a federal grant (per OMB Circular A-21). The federal government funds office supply items via a portion of the F&A rate, therefore, charging these costs directly to the grant would be considered “double dipping”. The office supplies should be charged to a departmental account.


B) The coffee maker in the lab has been on the fritz lately, so just go ahead and get a new one. Charge half of it to my two NIH grants (RO1A & B) and the rest to the department.

Answer: Normal office type items and/or small equipment (coffee makers, microwave ovens, small refrigerators…) should not be charged to federal grants because there is not a clear and distinct correlation to the project. These items could be considered personal in nature or food/beverages, which are both unallowable costs per A-21. The coffee maker should be charged to a departmental account.


C) Some chemicals spilled on to Moe Green’s lab stool last week and now it’s not usable. Go ahead and get him another one and charge it to my Merk grant.

Answer: The stool would not be an allowable direct cost on a NIH grant, however, Dr. Corleone can charge it to his Merck grant.


D) My subscription to the Journal of Advance Widgetry is almost up, so please renew it, ASAP. Split the cost between my NIH (RO1A & B) grants and the Merck contract.

Answer: Normally, the federal government considers the costs of books and journal subscriptions to be an indirect cost, which they fund via the library portion of the F&A rate. If the PI can establish/document the direct correlation of the journal to his NIH grant(s) (i.e., “an identifiable cost objective”), then it could be charged as a direct cost. In the case noted above, SPA would advise the PI to charge the entire subscription cost to the Merck contract or some other departmental account.


E) I just saw Dr. Clemenza from Radiology and he’s got a new Dell laptop PC. A laptop would be great for when I have to go out of town next month. It shouldn’t be over $5k, so go ahead and charge it to my new NIH grant (RO1-B).

Answer: General-purpose equipment/items can not be charged to federal grants. Laptops and PC’s can be considered general purpose and special purpose items, therefore, the PI should provide additional detail about the intended use of the item and how it relates to the NIH grant. If the cost of the laptop is less than $5,000, then the item is not considered equipment, however, SPA would still require a the PI to describe/document the general or special purpose nature of the item. The department can also divide the cost of the item between research and departmental accounts based upon the intended usage (i.e., 25% to research grants, 25% to administrative accounts, 50% to instructional accounts).


F) This Friday I want to bring pizza in at lunch for the lab staff as kick off for the new NIH grant. Go ahead and set that up. I’ll give you some cash to pick it up and then just do a check request to reimburse me. Charge the pizza to the new NIH grant (RO1-B).

Answer: Food and beverages are considered unallowable costs on federal grants. Working lunch/dinners are also considered unallowable costs. The pizza should be charged to a departmental and/or non-federal funding source. Departmental policies regarding the reimbursement of such costs should also be considered.


G) We also got the bill for the new hard drive that was installed in the PC that runs the “laserthing”. Since we bought the “laserthing” out of the equipment budget on my initial NIH grant (RO1-A), charge the hard drive bill to it, too.

Answer: It appears that the hard drive could be directly related to the NIH grant. The PI should provide a more detailed description of the “laserthing” and it’s relation to the grant and how the hard drive will directly benefit the project in the Trail Doc.


H) I picked up a new Palm Pilot at Best Buy over the weekend. It’s really going to help me get organized and keep track of my schedule. I’ll drop off the receipt so you can process a check request to reimburse me. It was about $499 plus tax. Charge it to my NIH (RO1A & B) grants and the Merck contract.

Answer: The Palm Pilot is considered a general use item, therefore, it should not be charged to the NIH grants. This item should be charged to the Merck contract or some other non-federal funding source.


I) I’ve got a receipt from dinner last week with Dr. Luca Brassi from Cornel Med School. We talked about his current NIH research projects, which are similar to mine, and the possibility of a future collaborative proposal. Put through a check request through to reimburse me. Charge my NIH grants.

Thanks for your help.

Dr. V. Corleone

Answer: Meals with current or future collaborators are considered unallowable costs on federal grants. Meals incurred while on travel status and meals provided to subjects/participants in the study are the only types of food costs deemed allowable, per A-21. The dinner should be charged to a departmental and/or non-federal funding source. Departmental policies regarding the reimbursement of such costs should also be considered.

Financial Vignettes #2

Cost Sharing

Financial Vignette #2Cost Sharing

Carlos Santana, Administrator – Department of Rockology, has a number of cost sharing issues that have been forwarded to his attention. They need to be resolved ASAP, so please review the items and be prepared to answer/discuss the questions below.

A) Dr. Clapton’s NIH (55###) grant will end in 90 days, but there is no money available

for supplies and the salary dollars are all encumbered. His lab is low on several supply items that are used for the project and they really need to place an order soon. Clapton has some available funds in a 9#### fund that should cover the remaining supply costs for the NIH project. Should he charge the PO’s for the supplies to the 9####, 55### or somewhere else?

Answer: Voluntary cost sharing. Request G&C to set up cost sharing account 55###V and list fund 9#### as the debit account. Charge the lab supplies to the cost sharing account.


B) Fund 56### ended last month, but it is overbudget in salaries by about $5,000. Carlos checked with Dr. Page and he indicated that additional personnel were charged to the project in the last two months of the project because there was a ton of remaining data that had to be analyzed. There is no money available in supplies or travel, so rebudgeting up into salaries is not an option. The department has some available funds in the 12-3#### account because the position for Dr. Page’s secretary was vacant for a couple months at the beginning of the year. Should he just charge the $5k in salaries to the department account?

Answer: Voluntary cost sharing. Request G&C to setup a cost sharing account 56###V and list 12-3#### as the debit account. Process a PCT to move the salaries from 56### to 56###V.


C) One of the new PI’s in the department, Dr. Townshend, is responding to a Request for Proposals from the Woodstock Foundation. The RFP requires 15% effort from the PI, but it also states that Woodstock will not fund faculty salaries and fringes. If Dr. Townsend has to expend 15% effort on the project, and he can’t charge his salary to the fund, where does the salary go?

Answer: Mandatory cost sharing. Dr. Townshend is required under the terms of the RFP to contribute effort on project which will not be reimbursed by the Woodstock Foundation, therefore his salary (and related fringe benefits) is considered mandatory cost sharing. Townshend’s salary should be noted in the proposal budget and narrative as the University’s contribution to the project. Preferably, a non-federal or departmental account which can fund the 15% PI salary should be identified by the PI during the proposal preparation process.


D) Dr. Richards is preparing a proposal in response to an RFP from the National Institute for Drug and Alcohol Abuse (NIDAA). The RFP has a section about “Grantee Matching.” It appears that the NIDAA will fund 75% of the proposed project costs and the remaining 25% is considered Grantee Matching. Is “Grantee Matching” the same as cost sharing? Does the 25% come from the Dean, the department chair or from some other resources available to the PI? The NIDAA wants a budget for the entire project, and they want the Grantee Matching expenses broken out in detail. Does he need to include fringe benefits and indirect in the Grantee Matching section?

Answer: “Grantee matching” is considered mandatory cost sharing in this situation. Normally, the PI or the chairman will identify a funding source for the 25% cost sharing. The PI should prepare a detailed budget that includes direct and F&A costs for the agency expenses and the “Grantee Matching” portion of the project.


E) The award from the Tyler Foundation requires Dr. Perry to cost share 10% of funded amount. The grant from Tyler was $75,000, so the cost sharing amount is $7,500. Does Dr. Perry have to charge $7,500 in direct costs to the X account? The F&A rate awarded was 53%, can he utilize both direct and F&A to meet the $7,500 requirement?

Answer: Mandatory cost sharing. The $7,500 cost sharing commitment is a combination of direct and F&A costs. The direct cost commitment (chargeable to the “X” account) is $4,902 ($7,500/1.53%). The corresponding F&A cost sharing amounts to $2,598 ($7,500 - $4,902)


F) The third year of Dr. Edge’s NIH grant started on 11/01/01 and his salary at the time was $200,000 (effort on the project was 20%). The NIH revised the salary cap rate in January 2002. What are the maximum salary rates that he can charge for periods 11/1/01 through 12/1/01 and then 1/1/02 through 10/31/02? What amounts should hit the grant fund, X account and/or the V account? What amounts would hit those accounts if his salary was increased to $205,000 on 7/1/02?

Dr. Edge's NIH Grant

Budget Period: 11/1/01 - 10/31/02

Fed Fiscal Year: 2002

PI Salary-FY 02: 200,000$

PI Salary-FY 03: 205,000$

Effort/Salary %: 20%

Monthly Max NIH Grant

Month Salary (20%) Cap Rate Fund X Fund

11/01 3,333.33 161,200 2,686.67 646.66

12/01 3,333.33 161,200 2,686.67 646.66

1/02 3,333.33 166,700 2,778.33 555.00

2/02 3,333.33 166,700 2,778.33 555.00

3/02 3,333.33 166,700 2,778.33 555.00

4/02 3,333.33 166,700 2,778.33 555.00

5/02 3,333.33 166,700 2,778.33 555.00

6/02 3,333.33 166,700 2,778.33 555.00

7/02 3,416.67 166,700 2,778.33 638.34

8/02 3,416.67 166,700 2,778.33 638.34

9/02 3,416.67 166,700 2,778.33 638.34

10/02 3,416.67 166,700 2,778.33 638.34

Answer: Voluntary cost sharing. Request G&C to setup a cost sharing account 56###V and list 12-3#### as the debit account. Process a PCT to move the salaries from 56### to 56###V.


G) The new budget period (02 year) for Dr. Summer’s grant started on 4/1/02. The grant was originally submitted and funded for 25% salary at the old $161,200 cap rate, but the fund does not have enough available funds to handle the new $166,700 cap rate. Does he have to charge the grant at the $166,700 rate or can he keep it consistent with the budget using the $161,200 rate? What amounts should hit the grant fund, X account and V account? Dr. Summer’s salary was $195,000 for FY 02 and $203,000 for FY 03.

Dr. Summer's NIH Grant

(A) (B) (C)PI Salary FY 01 Cap FY 02 Cap

195,000$ 161,200$ 166,700$

Salary Distribution:NIH Grant A 25% 48,750 40,300 41,675

Calculation:NIH Grant A 40,300 = (B)NIH Grant A - Mandatory C/S 7,075 = (A) - (C)NIH Grant A - Voluntary C/S 1,375 = (A) -(B) - (C)

Answer: Dr. Summer can utilize the lower cap rate, since funding is limited. The difference between the maximum cap rate and the old rate is considered voluntary cost sharing and should be charged to a V Fund. See applicable calculations noted below.

Financial Vignettes #3

PARs and PCTs

Financial Vignette #3PARs and PCTs

Mike Martz is the administrator in Dr. Warner’s department. Some of the percentages may have to be revised, based upon Warner’s actual activities during the PAR period. Please review the PAR and be prepared to answer/discuss the questions noted in each item (A – G).

Name: Warner, Dr. KurtSSN: 666-66-6666

Reporting Period: Jan-Jun 2002Personal Activity Period: 01/01 - 06/02

Activity EffortPrinicpal Investigator Agency Number % of By Account Number

Purpose/Title Effort Category

Departmental ResearchJones Disease Discretionary Fund 15 12 30XX 12 14 93###

Patient CareFlightology Dept. 15 12 30XX 12 15 02####

Supv of Residents – Barnes 15 12 30XX 12 16 920##45

Organized ResearchWarner, Dr. Kurt 1R01TD1234

Flight Analysis of Airborn Objects 25 22 30XX 11 20 55##6Warner, Dr. Kurt 2R01GG4321

Offensive Play Schematic Syndrome 30 22 30XX 11 20 54##255

100


A) Dr. Warner stated that he actually spent 40% of his time on fund 55##6 and 15% on 54##2 during the PAR period. Does he need to adjust his PAR? Does the department have to process a PCT? Did he need prior approval from the NIH to reduce his effort on 54##2?

Answer: Dr. Warner should revise the percentages on the PAR to reflect his actual effort during the PAR period (40% of his time on fund 55##6 and 15% on 54##2). The department should submit a PCT to adjust Dr. Warner’s salary so that it matches the reported effort. His effort on 54##2 decreased by more than 25% during the PAR period (dropping from 30% to 15% is a 50% reduction), therefore, Dr. Warner should have requested prior approval from the NIH for this reduced effort.


B) Dr. Warner stated that he spent additional time on Patient Care (18%) activities and less on Supervision of Residents (12%). Does he need to adjust his PAR? Does the department have to process a PCT?

Answer: Dr. Warner should revise the percentage on the PAR to reflect his actual effort on Patient Care and Supervision of Residents. The salaries charged to these accounts should be revised and include on the PCT that is submitted for A) above.


C) Dr. Warner submitted two new proposals to the NIH during this PAR period (2/1/02 and 6/1/02 deadlines). The time he spent on preparing and submitting the proposals is contained in the Organized Research percentages on the PAR. Does he need to break this effort out into another category? Does the department need to process a PCT?

Answer: Proposal preparation time is considered administrative effort, per OMB Circular A-21. The applicable effort percentage for this proposal preparation time should be pulled out of the sponsored research percentages and reported on a departmental administrative account (manually add this account number and percentage to this PAR report). A PCT should be processed to move the applicable amount from the research projects to the administrative account. Generally, each PI should have some administrative effort (department meetings, committee work, and proposal preparation…) during the PAR period. A minimum of 1% or 2% administrative effort each PAR period is a general guideline for WU faculty.


D) Warner was appointed to the Human Studies Committee in January 2002 and ended up spending a decent amount of time at the meetings and in reviewing the protocols. Does he need to break out this effort into another category on the PAR? Does the department need to process a PCT?

Answer: Participation in the Human Studies Committee is considered administrative effort, per OMB Circular A-21. Warner should revise the original effort percentages and add an administrative account to the PAR. A PCT should be processed to adjust salaries so that they reflect the revised effort percentages.


Other Issues in the Department:

E) Mary Jones is a technician in Dr. Warner’s lab and she went out on maternity leave last month. We just got her PAR and noticed that she did some work on Dr. Bruce’s NIH grant (5###1) during the PAR period. Mary is not available to sign the PAR, so who can certify her effort?

Answer: A PAR can be certified/signed by the employee or someone who had knowledge of 100% their activity. In this case, Jones is not available, therefore Dr. Warner and Dr. Bruce should both sign the PAR. Both PI’s must sign because she spent time in each of their labs.


Other Issues in the Department:

F) Dr. Vermiel’s grant from the NIH (55###) ended last month and he’s got an available balance in salaries of about $10,000. He doesn’t want to give the money back to the NIH, so he has instructed his assistant to go back and charge 100% of his salary for last month to the grant. What kind of justification should they put on the PCT?

Answer: Salaries charged to a sponsored project cannot exceed the actual effort expended on the project. Unless Dr. Vermeil actually worked 100% on the grant during the last month, a PCT should not be processed.


G) Dr. Bruce’s grant from the Receiver Foundation just came in and it’s got a start date of 6/1/02. Bruce knew that it would take a while for the agreement to get finalized so he went ahead and charged the 6/02 and 7/02 salaries for the Receiver project to his NIH grant (56##4), as an interim measure. The fund number for the new grant is now set up, 44##4, so the department has to process the PCT’s to move the 6/02 & 7/02 salaries off fund 56##4 and on to 44##4. How should they justify/explain this situation on the PCT?

Answer: The salaries for effort on the Receiver Foundation project that were charged to the NIH grants in 6/02 and 7/02 are considered unallowable costs, per OMB Circular A-21. The PCT to move the salaries should be processed ASAP. Dr. Bruce should explain on the PCT that he was unaware that charging the NIH grant for these salaries, as an interim funding source, was an unallowable activity. Dr. Bruce should sign each of the applicable PCTs. In the future, Dr. Bruce should charge salaries for pending grants to a project advance account or some other departmental account (non-federal).

Next Steps

Resource for Internal Medicine

Washington University School of Medicine

Research Administration

Resources

Internal Medicine Retreat

October 16, 2002

FY03 Internal Medicine Division Administrators' meetings

Continuing Education Presentations Schedule

Date

Presenter/Department

Topic 11/20/02

Joe Kanabrocki, EH&S

Biological Safety

12/18/02

Cindy White, Research Office

Funding Opportunities/Finding Funding

01/23/03

Kaaren Downey, Research Office

Subcontracts

02/27/03

Sarah Frankel, Human Studies Committee

Confidentiality Issues in research with human subjects

04/24/03

Ken Boschert, Division of Comparative Medicine

Overview of Animal Subjects Research Issues

05/22/03

Pat Scannell, Human Studies Committee

Electronic Submission

06/26/03

Joe Gindhart, Sponsored Projects Accounting

Transferring PIs and Equipment In/Out of the Department

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October 16, 2002 Internal Medicine Retreat

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