6.1 Post-award Project Management
Administering an award consists of the necessary actions for managing a grant award, from the initial authority to expend grant monies through the fiscal close-out and final report of an expired grant. The post-award management of any grant is the primary responsibility of the Principal Investigator (PI), the Business and Finance Office, with the support of the Office of Sponsored Programs (OSP). The following section of this manual contains information on the process of post-award management.
In the preparation of this material, the general requirements of federal grants have been considered. However, it is important to understand that there has been no attempt to cover the specific regulations of all federal and non-federal agencies and their various programs. Principal Investigators are responsible for strict adherence to the regulations governing their awards, so it is imperative that they have complete knowledge of those regulations and the university’s regulations concerning expenditures of grant awards.
The president of the university or his/her designee will formally accept all sponsored project funds. Normally, award notices from federal agencies are directed to the president, with a copy to the PI. No one except the president or his/her designee is authorized to accept any funds or sign any contract.
When the grant award notification is received, the PI should examine the document for possible administrative errors or omissions. Upon receipt of the award or the initial payment by the sponsoring agency, an account number will be assigned by the Business and Finance Office. The PI cannot commit funds until he/she is informed of this account number. No one receiving grant funds is permitted to establish off-campus bank accounts or is, in any way, allowed to execute financial transactions that circumvent university procedures.
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Background OMB Circular A-21, Cost Principles for Educational Institutions, identifies direct and Facilities and Administrative (F&A) costs that may be charged to federal research grants and contracts. The cost principles also identify those charges that cannot be charged to grants and are considered unallowable expenses.
OMB Circular A-21 offers four tests (Allowable, Allocable, Reasonable and Consistently treated – AARC) to determine the allowability of direct costs applied to federally sponsored agreements. Allowable costs must:
- Be Allowable.
- Is this cost prohibited for any reason, either by the sponsor requirement or within A-21. Does it conform to any limitations or exclusions in the sponsored agreement?
- Be Allocable. A cost is allocable to a sponsored agreement if the goods/services involved are charged in accordance with the relative benefits received by that agreement. A cost is allocable to a sponsored agreement if: it is incurred solely to advance the work under the sponsored agreement; it benefits both the sponsored agreement and other work of the institution in proportions that can be approximated through use of reasonable methods.
- Be Reasonable.
- The costs must be necessary for fulfillment of the agreement and acquired by means consistent with federal and state laws and regulations
- Costs incurred must be consistent with institutional policies and practices
- Would a “prudent person” make the same decision on the purchase in similar circumstances?
- Be treated Consistently throughout the University. Similar costs normally cannot be treated as both direct and indirect costs.
In most cases, facilities and administrative (F&A) costs are not charged directly to a project unless specifically allowed by the terms and conditions of the award or with prior written approval from the sponsor. Costs incurred for common or joint objectives which cannot be identified specifically with a particular sponsored project should be treated as F&A costs. Examples included the cost of utilities, maintenance and operation; building and equipment use expenses; administrative costs, library costs, and student service costs. Most sponsored agreements include a percentage of the university's total F&A cost in order to partially subsidize this cost. The federal government uses the term Facilities and Administration rate to refer to this percentage. Many organizations use the term “indirect costs.”
A survey of allowable and unallowable costs is provided below; however this list is not all inclusive always refer to A-21:
|Accounts||Description||Type of Expense|
|Alcohol||Unallowable as an entertainment expense.||Unallowable|
|Animals||Allowable for the acquisition, care, and use of experimental animals, contingent upon compliance with the applicable requirements of the PHS Policy on Humane Care and Use of Laboratory Animals||Allowable
|Books and Journals||Books and journals generally should be provided as part of normal library services and treated as F&A costs.||Allowable|
|Consultant Services||A consultant is an individual retained to provide professional advice or services for a fee but usually not as an employee of the requiring organization.||Allowable|
|Donor Costs||Allowable for payment to volunteers or research subjects who contribute blood, urine samples, and other body fluids or tissues that are specifically project related.||Allowable|
|Dues or Membership Fees||Generally, allowable as an F&A cost for organizational membership in business, professional, or technical organizations or societies.||Allowable|
|Entertainment Costs||This includes the cost of amusements, social activities, and related incidental costs.||Unallowable|
|Equipment||Allowable for purchase of new, used, or replacement equipment as a direct cost or as part of F&A costs, depending on the intended use of the equipment.||Allowable|
|Fringe Benefits||Allowable as part of overall compensation to employees in proportion to the relative amount of time/effort devoted by the employees. Must be consistent with university policy.||Allowable|
|Insurance||Insurance usually is treated as an F&A cost.||Allowable|
|Salaries and Wages||Compensation for personal services covers all amounts, including fringe benefits, paid currently or accrued by the organization for employee services rendered to the grant-supported project.||Allowable|
|Stipends||Payments made to an individual under a fellowship or training grant in accordance with pre-established levels. Payments are intended for living expenses during training.||Allowable|
|Telephone Cost||Basic phone usage is generally an F&A cost.||Allowable|
|Travel||Allowable as a direct cost where such travel will provide direct benefits to the project.||*Allowable|
|* Foreign travel requires prior approval from the Agency.|
Generally speaking, the following costs are figured into the F&A cost rate so they are unallowable as direct costs. Direct charging of these costs may be appropriate where a major project or activity explicitly budgets for particular administrative costs or clerical services. "Major project" is defined as a project that requires an extensive amount of administrative or clerical support, which is significantly greater than the routine level of such services provided by academic departments.
|Generally Unallowable Administrative Costs||Examples|
|Administrative and Clerical Salary||Secretary, Administrative Assistant, Department or Office Manager, Exempt personnel with administrative duty.|
|Office Supplies||Pens, paper, ribbons, disks, folders, organizers, scissors, calculator, etc.|
|Dues & Memberships||Professional Organization Membership fees.|
|Telephone and Internal Expenses||Fee for basic telephone costs for having a phone. Toll calls allowable if specifically related to grant.|
|Postage & Mail*||US Mail, FEDEX, Airborne, etc.
*Shipping of research material to a funding agency or to another institution/company directly involved in the research is acceptable
|Periodicals & Newspapers||Subscriptions to magazines, journals or newspapers unless it is clearly demonstrated by the Principal Investigator that the subscription is specific to a particular project.|
|Copying||Photocopies from copy services or from outside vendors.|
The PI should consult with the Business Office throughout the project concerning expenditures. The Business Office can advise on the sponsor's and the university's regulations on appropriate expenditures.
Regardless of the funding source of any grant, all expenditures must comply not only with the guidelines of the sponsor but also with existing university, Board of Regents, and state policies related to purchasing, budgeting, and personnel costs. All expenditures must be approved by the PI. Only payment requests for items that are included in the grant budget will be approved and processed for payment. (See below for rebudgeting procedures.)
NSF allows PIs to rebudget line items from one budget category to another for allowable expenses to accommodate unanticipated expenditures. This alteration cannot not change the total research dollars for the project, nor can monies be transferred out of participant costs. In general, PIs do not have to seek NSF approval when a rebudget does not involve a major change in the scope or objective of the project, or a change in key personnel.
However, the change does necessitate approval from OSP. The PI will submit an e-mail notification to OSP of the budget transfer request (i.e. including amounts and accounts impacted) prior to incurring an expense. If approved, the request will be forwarded to the Grants Accountant in Business and Finance Office. Rebudgeting requests for grants from any other agency or foundation other than NSF must be cleared through OSP and then forwarded to the sponsor’s program or grants officer for approval.
The State of Georgia generally requires that records be retained for a longer period of time than what is required by NSF or other agencies of the Federal Government. Therefore, the rules and regulations promulgated by the University System of Georgia and based upon the requirements of the Georgia Records Act (O.C.G.A. 50-18-90 et seq.) guide the policy at Armstrong State University. Complete regulations can be found at http://www.usg.edu/records_management/
(I2) Research Grant Proposal Development Records: Retention -- Retain until no longer required for reference or administrative use
(I3) Research Grant Records: Retention -- Permanent for final research report; all other records 7 years after closing of the grant
(I4) Unfunded Research Grant Proposal Applications Records: Retention -- Retain 2 years after submission
(I5) Institutional Review Board (IRB) Records-Human Subjects: Retention -- Minutes: 5 years. Records relating to research and all others: 3 years
(I6) Institutional Biosafety Committee Records (RDNA Research): Retention -- Minutes: 5 years. Records relating to research and others 3 years after completion of research
(I7) Institutional Animal Care and Use Committee (IACUC) Records: Retention -- Minutes: 5 years. All other records: Retain 3 years after completion of research
(I8) Institutionally Funded Research Project Review Records: Retention -- Permanent for minutes and final research reports; 5 years for funding summaries and funded applications; 1 year for all other records
(I10) Research Data (Animal Care and Use): Retention -- Projects not of major significance: 3 years after completion. Projects of major significance, permanent (I11) Research Data (Human Subjects): Retention -- Projects are not of major significance but there are potential long-term affects to human subjects: Retain 70 years. Projects of major significance, permanent
(I12) Research Data (Agricultural): Retention -- Projects are not of major significance but have potential long term environmental effect: Retain 70 years after completion of project. Projects of major significance: permanent
(I13) Animal Breeding and Management Records: Retention -- 3 years (I16) Scientific Misconduct Records: Retention -- 7 years after the expiration of the grant or 1 year after litigation, whichever is longer
(I17) Grants and Contracts Accounting Records: Retention -- Contracts, patents, and agreements for use of research outcomes: Permanent. All other accounting records: 7 years after final financial report
Acceptance of a sponsored program fund by the university commits the university and the PI to conduct the program in a professional manner and in accordance with the policies of the funding agency. It is the responsibility of each PI to ensure that the research effort or program is commensurate with the expectations of the grantor and with the highest ideals of professional inquiry. Although the PI is responsible to the funding agency for conducting a particular project, the normal supervisory relationship between the university and the PI is not altered. The ultimate accountability for any sponsored project rests with the university.
The PI should remember that the support of the various administrative units of the university is available during the conduct of the sponsored activity. Explanations of procedures and support are available from the Human Resources department concerning the hiring of new personnel, and from the Business and Finance Office concerning appropriate expenditures of all types -- from equipment purchases to required telephone service.
Throughout the entire implementation of the project, the Principal Investigator should document all activities to ensure proper reporting of all activities and expenditures as required by the sponsor.
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- Do not incur obligations under new or renewed projects until authority to expend has been received and an appropriate account number has been assigned.
- Read the award guidelines and budget carefully to ensure proper management of the award.
- Do not purchase equipment during the last three months of a federal grant. Federal auditors may disallow the cost of the equipment purchased near the end of a grant.
- Under ordinary circumstances, PIs should not order supplies during the last month of a grant.
- Verify all charges on the grant with the Business Office before such financial commitments are made. Common budget items and recurring expenses, such as salaries, should be verified when the account is established.
- Process all budgetary adjustments through the Business Office to avoid audit disallowances.
- Each month monitor the grant expenses and encumbrances as a check on the remaining funds.
- Do not make expenditures on a terminated grant account while awaiting assignment of a new account number for a renewal grant.
- Do not incur obligations if you have any doubts as to whether they will be allowed. Always check with the agency contact for your award and with the Business Office.
- Make a point to submit required periodic and final reports on time.
- Remember that the Business Office has fiscal responsibility to ensure that your award is administered in accordance with the regulations of the funding agency and the university. Do not circumvent standard university procedures for any reason.
- All grant-funded faculty salary items should follow the normal process: obtaining approval by the department head, designating the charging of the correct salary amount to the grant account, and forwarding to the Office of Vice President for Academic Affairs for final approval and payment processing. Be aware of required salary fringe benefits that apply to faculty salaries.
- Any funds expensed in excess of individual budgeted items or the total grant award will be charged to the PI’s home department.